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DRY CARGO

CHARTERING













On behalf of
INDIAN INSTITUTE OF LOGISTICS
(A SCHOOL OF MULTI -MODAL TRANSPORT)

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COPYRI GHT by I ndi an I nst i t ut e of Logi st i cs

Pri nt ed and Publ i shed on behal f of
I ndi an I nst i t ut e of l ogi st i cs,
Chennai


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NOT FOR SALE FOR PRI VATE CI RCULATI ON ONLY.

Pri nted i n 2011 (Edi ted Versi on)

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DRY CARGO CHARTERING
INDEX
CHAPTER NO SUBJECT DETAILS PAGE
NO
CHAPTER NO 1 DRY CARGO SHIPS 4
CHAPTER NO 2
TONNAGES, LOADLI NES, DI EMNSI ONS AND CARGOES

51
CHAPTER NO 3 FREI GHT MARKETS AND MARKET PRACTI CE 69
CHAPTER NO 4 CHARTERI NG CONTRACTS 107
CHAPTER NO 5 FI NANCI AL ELEMENTS OF CHARTER PARTI ES 149
CHAPTER NO 6 LAYTI ME 171
CHAPTER NO 7 VOYAGE ESTI MATI NG 199
CHAPTER NO 8 BI LLS OF LOADI NG AND CARGO CLAI MS 227
CHAPTER NO 9 WORLD TRADES 260
CHAPTER NO 10 DI SPUTES AND PROFESSI ONAL I NDEMNI TY 299
MOCK EXAM 318
SAMPLE PAPERS 320

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CHAPTER- 1


DRY CARGO SHI PS


Thi s Dr y Cargo Chart eri ng Course set s out t o ensure t hat a
consci ent i ous reader wi l l f i ni sh up wi t h a t horough basi c knowl edge of
t hi s speci al i zed sect or of shi p broki ng. I t expl ai ns i n det ai l t he
commodi t i es i nvol ved, t hei r carr i age requi rement s and t he vessel s
ser vi ng t hi s market . The course cover s i n dept h t he rol e of t hose
part i ci pat i ng i n t he market t he Chart ers, Shi powners, Operat ors and
Brokers as wel l as t he f rei ght market s t hemsel ves and t hei r
document at i on, char t er part i es, bi l l s of l adi ng, l et t ers of credi t , et c. The
mechani cs of of f ers and count er -of f ers are deal t wi t h as wel l as
warni ngs regardi ng t he dangers of f raud and unet hi cal pract i ces. Cl ose
at t ent i on i s pai d t o aspect s of f rei ght s and hi res, wi t h ext ensi ve
expl anat i on of how t o perf orm l ayt i me cal cul at i ons and voyage
est i mat es.
Fi nal l y, worl d t rades and geography af f ect i ng t he dry cargo
market i n part i cul ar are exami ned as wel l as expl anat i ons of how dr y -
cargo chart eri ng organi zat i ons are operat ed, t hei r of f i ce t echni ques,
comput er i zat i on, t he set t i ng of di sput es by reconci l i at i on, arbi t rat i on
and by resort t o l aw, and rel evant i nsurance prot ect i on. I t i s an
ext ensi ve undert aki ng i n j ust t en l essons, but t he course has been
desi gned t o hel p st udent s i n a pract i cal f ashi on, t aki ng t hem l esson by
l esson i n a l ogi cal manner t hr ough t he many and vari ed f acet s of t hi s
f asci nat i ng sect or of t he worl d s mari t i me i ndust ry.
Thi s f i rst l esson i nt roduces t he st udent t o dr y cargo shi ps. I t
does not set out t o be an exhaust i ve st udy of t he subj ect , some of i t has
al ready been cover ed i n t he I nt roduct i on t o Shi ppi ng, and ot hers are

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deal t wi t h i n subsequent l essons. But i t expl ai ns many ever y -day
expressi ons as t hey are used i n connect i on wi t h t he vessel s t hat
part i ci pat e i n t hi s market and shoul d prove of val ue t o t hose bot h
rel at i vel y experi enced and t hose new t o t he prof essi on. The
i nt ernat i onal dr y-car go market i s i mmense, served by numerous shi ps of
al l si zes, rangi ng f rom general -cargo and speci al i zed vessel s t hrough t o
commonpl ace bul kcarri ers, and f rom smal l coast ers wi t h a cargo
capaci t y of a hundred or so t ones upt o enormous cape-si ze
bul kcarri ers capabl e of carryi ng cargoes i n excess of a quart er of a
mi l l i on t ones of a bul k commodi t y such as i ron ore. There are st i l l el der
sai l i ng shi ps engaged i n t hi s most f asci nat i ng of market s, as wel l as t he
l at est , hi ghl y sophi st i cat ed, f uel -ef f i ci ent and cargo-f ri endl y modern
vessel s.
Some shi ps are hi ghl y speci al i zed and unabl e t o carr y ot her t han
a part i cul ar commodi t y ot hers ar e f l exi bl e i n desi gn and abl e t o
t ransport a vari et y of cargoes. I n t hi s Lesson, we wi l l be exami ni ng of
some of t he shi p t ypes t o be f ound i n t he dr y-cargo sect or of t he
i nt ernat i onal shi ppi ng market , t hei r basi c desi gn and const ruct i onal
det ai l s and t hei r sui t abi l i t y f or cert ai n car goes and t rades.
Shi p Types Appendi x 1. 1 shows t he i nt er -rel at i onshi p of vari ous dr y-
cargoshi p t ypes, and i t shoul d be not ed t hat some basi c desi gns are
adapt ed t o enabl e t he vessel t o become i nvol ved i n more t han one
t rade. Thus modern desi gns of cert ai n mul t i -deck vessel s ori gi nal l y
concei ved t o carr y general cargoes on an advert i sed, regul ar l i ner run
are nowadays capabl e of carr yi ng a part of f ul l t ramp cargo of
cont ai ners or, perhaps, a bul k cargo, i n addi t i on t o or i nst ead of break -
bul k parcel s of vari ous commodi t i es. I f t hey are addi t i onal l y equi pped
wi t h a hi gh capaci t y derri ck (t ermed a heavy l i f t ) capabl e, say, of
saf el y l i f t i ng f rom shore t o cargo hol d and vi ce versa, an art i cl e
wei ghi ng i n excess of 100 t onnes, t hey have yet anot her f aci l i t y of
advant age t o t he vessel s owners/ operat ors. Thus vessel s wi t h t hi s
cargo f l exi bi l i t y can i nt rude upon t he speci al i zed market s devel oped

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around t he mari ne t ransport at i on of cont ai ners, bul k commodi t i es and
heavy l i f t i t ems, i n addi t i on t o t he carr i age of bagged and bal ed goods.
Cert ai n bul kcarr i ers out wardl y t he si mpl es desi gn of dr y cargo
vessel s ar e adapt ed by t hei r owners and / or bui l ders t o engage i n
speci al i st t rades when an opport uni t y ar i ses; f or exampl e, t he carri age
of l umber i n cargo hol ds and on deck. Or t he di mensi ons, desi gn and
f i t t i ngs of t he shi p may permi t t radi ng t o part i cul ar geographi cal r egi ons
e. g. The Great Lakes, or t o i ce af f ect ed areas of t he wor l d. There
are even vessel s combi nat i on carr i ers capabl e of engagi ng i n bot h
wet market s and dry . These l arge vessel s (usual l y of 60, 000 t onnes
cargo capaci t y pl us) are equi pped t o carry cargoes of crude-oi l or dr y-
bul k commodi t i es, such as ores, coal or grai n.
I n al l cases, however, t he concept behi nd dr y-cargo mer chant
shi p desi gn has al t er ed dramat i cal l y i n t he hal f -cent ur y si nce Worl d War
I I . Nowadays, vessel s must be cargo-f ri endl y basi cal l y desi gned and
equi pped wi t h modern conveni ences t o speed cargo handl i ng at l oad
and di scharge port s wi t hi n a mi ni mum of t i me and wi t h a mi ni mum of
shore l abour but wi t h t he capabi l i t y of ef f i ci ent l y carr yi ng t he maxi mum
amount of f rei ght earni ng cargo. The soari ng cost of oi l f uel (ref erred
t o as bunkers ) si nce t he 1970 s has al so meant t hat modern mai n
engi nes have been desi gned t o consume consi derabl y l ess duri ng sea
passages t han was once t he case, and t hi s emphasi s on perf ormance
has l ed t o hul l desi gn i nnovat i ons, such as t he wi de-spread desi gn
i nt roduct i on of t he bul bous bow (see Appendi x 1: 2).
As port s have been enl arged, deepened, devel oped and, i n t he
ri cher count ri es, equi pped wi t h rel at i vel y sophi st i cat ed cargo-handl i ng
equi pment , so merchant shi p naval archi t ect s have been r equi red t o
i ncorporat e general port needs i nt o vessel desi gn, and t o pl an yet
l arger vessel s, capabl e of maxi mi zi ng earni ngs pot ent i al f or t hei r
owner s and of t ransport i ng goods wor l dwi de at t he l owest uni t pri ces f or
t he commodi t i es i nvol ved. So l et us now st udy t he basi c dr y-cargo shi p

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t ypes, broadl y di vi ded i nt o t he common cat egori es of : -
1) General Cargo
2) Bul kcarr i ers
3) Cont ai nershi ps
4) RO/ RO Shi ps
5) Speci al i sed
6) Short Sea
1. General Cargo Commonl y ref erred t o nowadays as mul t i -purpose
vessel s, general -cargo shi ps f ul f i l t he same f unct i ons as t hei r
predecessors hundr eds of years ago t he abi l i t y t o adapt t o worl d
t rades and demands and t o carr y a var i et y of cargoes. These vessel s
were f i rst mass-produced duri ng Worl d War I I , when t he f amous 10, 000
t onnes deadwei ght Li bert y t ype shi ps were bui l t . Lat er, many of t hese
vessel s were sol d t o sur vi vi ng and aspi ri ng shi powners as t he basi s of
modern post - war f l eet s, and t hei r t hree-i sl and desi gn (i . e. f orecast l e,
mi dshi ps- l ocat ed br i dge accommodat i on, and st ern superst ruct ure)
remai ned i n vogue unt i l t he 1960 s ( see Appendi x 1: 2) when new
desi gns pri nci pal l y t he Bri t i sh SD14 (see Appendi x 1: 3) and t he
Ameri can desi gned but Japanese pr oduced Freedom (Appendi x 1: 4),
as wel l as t he German Li bert y Repl acement (t he GLR) f i rst
appeared. There st i l l r emai n a f ew el derl y vessel s (see Appendi x 1: 2),
but t hese are becomi ng rare, t he t rend bei ng t owards shi ps wi t h af t -
superst ruct ur e, bri dge and engi nes, and wi t h cargo-f ri endl y ,
unobst ruct ed hat chways and hol ds bet ween t hese and t he f orecast l e (as
wi t h t he Fr eedom i l l ust rat ed i n Appendi x 1: 4); and wi t hout t he
i nconveni ence of a shaf t -t unnel coveri ng a l engt hy pr opel l er shaf t
l i nki ng t he mi dshi ps mai n engi ne and t he vessel s propel l er, bei ng
exposed t o pot ent i al damage f rom poorl y operat ed cargo-grabs when
di schargi ng a bul k cargo, or f rom heavy uni t s of cargo (e. g. scrap

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met al ) bei ng carel essl y l oaded. (Those engagi ng i n t he chart eri ng of
general cargo shi ps wi l l st i l l encount er Chart er Part y cl auses pl aci ng
t he onus of damage t o a shi ps shaf t -t unnel on t he Shi powner, i f t hat
t unnel i s not adequat el y prot ect ed).
Cargo Li ners and Tramps Mul t i -purpose vessel s oper at i ng i n t he deep-
sea market s t end t o be f ai rl y smal l by t oday s st andards, most bei ng i n
t he 10/ 25, 000 deadwei ght si ze cat egory. Those empl oyed on schedul ed
rout es are normal l y more sophi st i cat ed and somet i mes ar e bui l t t o
cust om-ser ve t hat operat i on, bei ng t ermed, per haps, cargo-l i ners , but
such vessel s are decl i ni ng i n numbers, l i ne-operat ors f requent l y
chart eri ng-i n conveni ent l y pl aced and pri ced t ramp- vessel s f rom t he
i nt ernat i onal dr y-car go market ; vessel s whi ch pl y t he oceans voyage by
voyage, t hei r owners/ operat ors seeki ng cargoes i n t he vi ci ni t y of where
t hei r vessel s happen t o be avai l abl e.
Li qui d Cargo Wi t h t he i nt roduct i on of cont ai ners and of parcel
t ankers, t here i s nowadays l ess demand f or smal l quant i t i es of l i qui d
cargoes t o be carri ed i n t he deep-t anks of cargo-l i ners, but t here i s
i ncreased demand f or vessel s wi t h hol ds and decks capabl e of carryi ng
several t i ers of cont ai ners. Thus, t he i nt ernal as wel l as t he ext ernal
desi gns of general cargo-mul t i -purpose vessel s have al t ered i n recent
years and t hese charges can perhaps best be expl ai ned by st udyi ng
var i ous aspect s appl i cabl e and, i n some cases, pecul i ar t o t hese
vessel s.
Dry Cargo Spaces Modern gener al -cargo shi ps are nearl y al ways
const ruct ed wi t h t wo (ver y occasi onal l y t hree, see Appendi x 1: 2) decks
and can t hus be t er med t weendeckers t he upper deck bei ng t he mai n
or weat her - deck , and t he l ower deck t he t weendeck . Most
t weendeckers have j ust one t weendeck l ocat ed somewhat cl oser t o t he
weat herdeck overhead t han t o t he bot t om of t he cargo hol d beneat h
about t wo-t hi rds up t he hei ght of t he hol ds (see Appendi ces 1: 3 and
1: 4) (see NB: 1 bel ow).

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The Cargo area encl osed bet ween t he t weendeck and t he
weat herdeck i s, l ogi cal l y, ref erred t o as t he t weendeck space , and t he
area beneat h t he t weendeck down t o t he bot t om of t he cargo area, t he
hol d-space . These vessel s are i deal f or t he carri age of bagged, bal ed
and drummed commodi t i es, t he support of t he t weendeck meani ng t hat
a hi gh t i er st owage of t hese goods can be saf el y accommodat ed;
whereas t he same number of t i ers i n a bul kcarri er, f or exampl e, mi ght
wel l l ead t o spl i t t i ng of l ower st owed bags or crumpl i ng of drums due t o
t he sheer wei ght pressi ng down f rom above. I t i s t rue t o say, however,
t hat t hi s i s l ess of a f act or t han was previ ousl y t he case, gi ven t he
i mprovement i n t he qual i t y of t he cargo bags and t he subsequent
t endency t o l arge si zed bags ( e. g. one t onne j umbo cargo bags).
The rel at i vel y l arge number of i ndi vi dual cargo spaces (t he SD14
shown i n Appendi x 1: 3, f or exampl e, has ei ght separat e, vari ous si zed
cargo compart ment s) i s anot her advant age when f aced wi t h sever al
commodi t i es t o be carri ed at t he same t i me, yet kept separat e f rom
each ot her e. g. t o avoi d t ai nt i ng by smel l , et c. or t o enabl e l oadi ng
and di schargi ng at several port s dur i ng a voyage, wi t hout ext ra-
handl i ng of cargoes. Where a modern general -cargo t weendecker i s
bui l t wi t h t he carr i age of bul k commodi t i es and cont ai ners i n mi nd, i n
addi t i on t o convent i onal t weendeck-cargoes , t he vessel can more
accurat el y be t ermed a mul t i -purpose shi p. An exampl e of such a
shi p-a Fr eedom Mk I I wi l l be f ound i n Appendi x 1: 4, bei ng equi pped
wi t h cont ai ner f i t t i ngs and wi t h ret ract abl e t weendecks t hat f ol d agai nst
t he si des of t he hol ds t o f aci l i t at e t he l oadi ng and di scharge of bul k
commodi t i es.
The bot t om of a cargo hol d i s not t he bot t om of a vessel .
Bet ween t he cargo hol d and t he shi p s bot t om wi l l be l ocat ed var i ous
t anks, desi gned t o carry wat er bal l ast or bunkers. These are t ermed
doubl e-bot t om t anks and t he t op of t hese t anks t hei r cei l i ng f orms
t he bot t om of t he cargo hol d l ocat ed di r ect l y above and, consequent l y,
usual l y ref erred t o as t he t ank-t ops see Appendi x 1: 3, wher e t he

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doubl e-bot t om t anks are cl earl y shown.
Cargo Fi tti ngs I n order t o carr y goods ef f i ci ent l y, general -cargo
vessel s need bui l t -i n f aci l i t i es t o handl e saf el y a whol e var i et y of
commodi t i es, as wel l as equi pment t o l oad, st ow, secur e and di scharge
t hose goods. Most hol d spaces wi l l be provi ded wi t h f i re-smot heri ng
equi pment e. g. CO2 f i t t i ngs used t o cont ai n out breaks of f i re,
cert ai n commodi t i es bei ng prone t o spont aneous combust i on (e. g.
bagged f i shmeal ) and/ or easi l y combust i bl e (e. g. bal ed j ut e) . Some
shi ps wi l l be addi t i onal l y equi pped wi t h mechani cal or, more l i kel y
el ect ri cal vent i l at i on i n t hei r cargo carryi ng spaces; usef ul part i cul ar l y
f or commodi t i es t hat sweat heavi l y (e. g. bagged ri ce). Ol der
t weendeckers may have coami ngs around t weendeck hat chways,
desi gned as a saf et y f eat ure t o pr ot ect t hose worki ng i n t he t weendeck
spaces f rom t he danger of f al l i ng i nt o t he hol ds bel ow (see t he Cargo
l i ner i n Appendi x 1: 2). Si nce t he 1960 s, however, wi t h t he wi despr ead
i nt roduct i on of f orkl i f t t rucks used t o f aci l i t at e cargo handl i ng, t hese
t weendeck coami ngs have been al most uni versal l y di spensed wi t h, t he
t weendeck hat chcovers f i t t i ng l evel wi t h t he surroundi ng t weendeck
f l oor and provi di ng a cl ear, f l at unobst ruct ed area. Such vessel s,
unobst ruct ed by t weendeck hat ch-coami ngs, are t ermed f l ush
t weendeckers , (Appendi x 1: 5).
Ot her obst ruct i ons possi bl e i n a t ween-decker s cargo
compart ment s are col umns or pi l l ars support i ng overhead decks. I t i s
essent i al t o check on t he l ocat i on of such obst ruct i ons i f i nt endi ng t o
use a vessel f or l arge, bul ky cargo. Some t weendeck vessel s are f i t t ed
wi t h cargo-bat t ens somet i mes cal l ed grat i ngs , st ri ps of t i mber f i xed
at i nt er val s (usual l y hori zont al l y but ver y occasi onal l y vert i cal l y) al ong
t he si des of hol ds and t weendeck spaces, and desi gned t o keep bagged
and bal ed commodi t i es f rom bei ng damaged by t ouchi ng t he si des of a
shi p whi ch are i nvar i abl y wet t hrough condensat i on and/ or sl i ght
seepage t hrough mi croscopi c f aul t s i n t he pl at i ng. Cargo-bat t ens al so
i ncrease vent i l at i on and reduce damage f rom moi st ure or sweat i ng.

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However, t hey are f requent l y damaged and have t o be removed ent i r el y
and st or ed el sewhere when handl i ng a bul k commodi t y. Si nce t hey ar e
expensi ve t o mai nt ai n i n good condi t i on and i t i s l abour i nt ensi ve t o
keep repai ri ng and removi ng cargo-bat t ens, i t i s nowadays unusual t o
f i nd t ramp general -cargo shi ps f ul l y equi pped wi t h t hi s f aci l i t y. I nst ead
cargo-net s mi ght be used, but more commonl y cargo i s pr ot ect ed when
necessar y by a combi nat i on of kraf t -paper and ot her dunnage mat eri al
f i t t ed somet i mes by t he crew but more commonl y by shor e st evedores
as l oadi ng progresses. Dunnage can be of vari ous mat er i al but , i s
usual l y l oose wood of vari ous ki nds and si zes l ai d at t he bot t om of a
cargo hol d t o keep l ower -st owed goods cl ear of bi l ge wat er and f rom
obst ruct i ng drai nage, and al so wedged bet ween part s of t he cargo t o
keep t he st ow secur e and saf e (e. g. f or the carri age of drums). Cert ai n
t rade, t radi t i onal l y use ot her, l ocal mat eri al s f or si mi l ar purposes,
cargo-mat s and bamboo, f or exampl e, bei ng ut i l i zed as dunnage
mat eri al f or t he export of bagged ri ce f rom Sout h-East Asi a.
I t may al so be necessar y t o secur e some commodi t i es wi t h
l ashi ngs. I n t hese cases pad-eyes may need t o be wel ded t o t ank-t ops
and / or hol d si des, so t o provi de saf e anchorages f or t he l ashi ng
mat eri al . The cost and t i me of wel di ng and removi ng t hese pad-eyes i s
usual l y f or t he account of t he Chart er wi t h Chart er Part y cl auses draf t ed
accordi ngl y perhaps addi ng t hat , i f not removed f ol l owi ng di scharge, t he
Shi powner i s t o be r ei mbursed by payment of a set rat e, say US $10. 00
per pad-eyes l ef t i n si t u. Nat ural l y, care must be t aken wi t h an wel di ng
work i n t he vi ci ni t y of oi l bunker t anks l ocat ed beneat h t ank -t ops. Such
a Chart er Part y cl ause may go on t o l i st t he l asi ng mat eri al s suppl i ed by
t he l oadi ng St evedores/ Chart erer s) st i pul at i ng t hat t he Shi powner i s t o
ensure t hat hi s Of f i cers t ake care of t hese and hand t hem over t o
Chart eres represent at i ves i n good condi t i on at t he end of t he voyage.
Bul k Cargoes Wi t h some gener al -cargo shi ps of cert ai n desi gns,
addi t i onal speci al f i t t i ngs mi ght be requi red bef ore a bul k grai n cargo
can be carr i ed saf el y prot ect ed f rom the cargo shi f t i ng dangerousl y

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when at sea. Most modern t weendecker s and mul t i - purpose vessel s are
desi gned t o carr y gr ai n wi t hout speci al f i t t i ngs, some bei ng f i t t ed wi t h
permanent part i al cent re-l i ne bul kheads , prevent i ng t he si deways shi f t
of cargo. Ol der vessel s engagi ng i n t hi s t rade mi ght requi re t he
const ruct i on of t emporar y wooden cent re-l i ne bul kheads bef ore
permi ssi on woul d be gi ven t o set out t o sea.
As we shal l see i n t he rel evant sect i on of t hi s paper, bul kcarri ers
are commonl y f i t t ed wi t h sel f -t ri mmi ng f aci l i t i es f or hi gh st owi ng bul k
cargoes such as grai n. I t i s not usual f or t weendeckers t o have t hi s
f aci l i t y al t hough at t ent i on t o t hi s def i ci ency has been gi ven by t he
desi gners of some modern mul t i -pur pose vessel s. The Pri nci pl e of
hi nged, hoi st abl e t weendecks has al so been ut i l i zed i n modern mul t i -
purpose vessel s, such as t he Freedom Mk I I shown i n Appendi x 1: 4.
Contai ners: Wi t h t he revol ut i on i n cargo-handl i ng si nce Worl d War I I,
t he desi gn of general -cargo shi ps has had t o adapt and conf orm t o new
met hods. Consequent l y, t he cargo spaces of modern mul t i -purpose
vessel s t ned t o be as square as i s possi bl e, so as t o assi st t he st owage
of cont ai ners and pal l et i zed-cargo, whi l st on t he weat herdecks, modern
desi gn al l ow f or st orage of cont ai ners, of t en t wo or more t i ers hi gh,
bear i ng i n mi nd vessel st abi l i t y, vi si bi l i t y f rom t he bri dge, and deck
st rengt hs.
Bal l ast and Bi l ges: Ol der general -car go vessel s were desi gned t o
carry quant i t i es of l i qui ds e. g. pal m oi l and many had smal l deep-
t anks f i t t ed wi t h heat i ng coi l s f or t hi s purpose. Occasi onal l y cargo
hol ds, capabl e of bei ng f l ooded t o pr ovi de ext ra st abi l i t y when t he
vessel i s i n bal l ast or part l y- l aden condi t i on may be t ermed deep-t anks
al t hough i t i s bet t er t o ref er t o t hem as f l oodabl e-hol ds t o di st i ngui sh
t hei r purpose. An exampl e of a f l oodabl e-hol d i n a general cargo
vessel can be f ound by r ef erence t o cargo-hol d No. 3 of t he SD14 shown
i n Appendi x 1: 3. A ver y f ew modern mul t i -purpose t ypes have been
equi pped wi t h ol der - st yl e deep-t anks, but general l y t hi s t rade has been

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t aken over al most t ot al l y by par cel -t ankers . Af t er washi ng cargo
spaces, di rt y wat er i s drai ned away f rom t he hol d bot t oms i nt o bi l ges
t hrough st rum-boxes whi ch act as f i l t ers and prevent sol i d mat t er f rom
bl ocki ng bi l ge pi pes and damagi ng pumps. Pri or t o l oadi ng bul k
commodi t i es, t hese bi l ge openi ngs mi ght be i nt ent i onal l y cover ed over
f or t he same reasons.
Shel ter Decker Anot her t erm t hat mi ght be encount ered especi al l y i t
seems i n t he short -sea market sect or i s t hat of shel t er -decker . The
shel t er ref ers t o a desi gn speci f i cal l y adapt ed t o overcome st ri ngent
t onnage regul at i ons, by whi ch vessel s coul d maxi mi ze cargo capaci t y
and i nt ake (and t hus maxi mi se earni ngs pot ent i al ) yet r est ri ct t he
regi st ered t onnage assessed agai nst t he vessel s and t hus reduce t hose
expenses and l i abi l i t i es whi ch are based on t he shi p s regi st ered
t onnage (eg port cost s and cert ai n l i abi l i t i es as t o cr ew number s). The
t onnage regul at i ons creat i ng t hese i nnovat i ve desi gns have l ong been
al t ered and t her e i s now no need f or cl ever naval archi t ect ure t o
overcome t hi s l egi sl at i on. Nevert hel ess, t he t erm l i ngers on i n cert ai n
market sect ors, and where t he t erm shel t er- decker i s used t oday i t
shoul d be t aken t o mean t weendecker .
Cargo Gear The most obvi ous ext er i or cargo f i t t i ng on a general -cargo
shi p i s her gear her derri cks or cranes.
Derri cks may be ol d i n desi gn, but t hey remai n i mport ant equi pment ;
t hei r use (and dangers) bei ng readi l y underst ood t hroughout t he worl d,
rel at i vel y si mpl e, as t hey ar e, t o ri g and t o mai nt ai n, and bei ng
reasonabl y i nexpensi ve. There are basi cal l y t hree part s t o a derr i ck
(see Appendi x 1: 6): -
1) A vert i cal support i ng pi l l ar a samson post sunk i nt o t he
shi p s weat herdeck, t o t he base of whi ch i s at t ached : -

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2) The boom, and
3) Ri ggi n (e. g. wi re ropes, bl ocks and t ackl e).
Derri cks are oper at ed by wi nches, usual l y el ect ri cal l y or
hydraul i cal l y dr i ven (see Appendi x 1: 6) . Al l part s of t he cargo l i f t i ng
equi pment must be ri gorousl y and regul arl y checked wi t h cert i f i cat es
i ssued at t est i ng t o t he saf e worki ng l oad sw1 of each uni t . These
i nspect i ons can be carri ed out by Cl assi f i cat i on Soci et i es or by cert ai n
ot her i nt er nat i onal l y recogni zed aut hor i t i es speci al i zi ng i n t hi s act i vi t y.
Cert ai nl y, i t i s al ways best t o ensure t hat a Chart er Part y cont ai ns
conf i rmat i on be t he Shi powner t hat a vessel s gear cert i f i cat es are up t o
dat e and wi l l remai n so duri ng t he currency of t he voyage / t i mechart er
i nvol ved. Fai l ure t o at t end t o t hi s aspect coul d cause shor e workers t o
ref use t o handl e a vessel or, worse, i nj ur y or deat h resul t i ng f rom
def ect i ve or uncer t i f i cat ed gear coul d render t o t hose i nvol ved
enormous f i nanci al penal t i es i n cert ai n ar eas of t he worl d.
The basi c derri ck can be ext r emel y ver sat i l e and i s capabl e of
adopt i on f or cert ai n t rades. Uni on Purchase i s a met hod of j oi ni ng
derri ck booms t o a part i cul ar ri ggi ng met hod, si mpl e t o use and f ast i n
operat i on, so t hat l oads can be moved speedi l y f rom shore t o cargo
hol d, or vi ce versa. The probl em wi t h t he syst em i s t hat once t he
ri ggi ng i s set up i t has t o be al t ered t o adj ust t he pl aces of l i f t i ng and
set t i ng down of each l oad. Thus car go has t o be moved an exact
posi t i on pr i or t o l i f t i ng and t aken away f rom anot her exact posi t i on at
t he end of each movement cycl e. I t i s t heref ore a l abour i nt ensi ve
met hod (al t hough t hi s i s not a probl em i n cert ai n areas of t he l ess -
devel oped wor l d). Addi t i onal l y, however, t he uni on of der r i cks i n t hi s
way reduces t he sw1, so t hat t wo 5-t onne sw1 derri cks mi ght have a
uni on purchase capaci t y of l ess t han hel d t he i ndi vi dual sw1 say 2
t onnes. However, f or bagged goods, t hi s may wel l not be a probl em,
and t he syst em has i t s advant ages f or t he di scharge of bagged goods i n
l ess- devel oped regi ons.

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Where heavy l oads are i nvol ved, uni on purchase i s obvi ousl y not
t he answer. The wi nch arrangement of cert ai n vessel s enabl es t wo
paral l el derri cks t o be l i nked t oget her wi t h t wo adj acent car go wi nch es
i n a syst em t ermed swi ngi ng derr i cks (see Appendi x 1: 6). Swi ngi ng
derri cks mai nt ai n t he speed of operat i on of uni on purchase, but enabl e
l i f t i ngs up t o t he maxi mum capaci t y of t he smal l est derri ck or cargo
wi nch i nvol ved, usi ng i n pl ace of a t hi rd cargo wi nch a deadman a
suspended deadwei ght on one l i ne (e. g. a mass of ol d wi re) t he purpose
of whi ch i s si mpl y t o provi de t ensi on. One wi nch i s used t o swi ng t he
boom f rom over t he hat chway t o t he quaysi de, a second wi nch bei ng
used t o swi ng t he boom back t o i t s ori gi nal posi t i on.
A var i at i on i s t he sel f -swi ngi ng derri ck , or crane-derri ck , a
si ngl e derri ck syst em t hat works i n t he same f ashi on as a crane, by
usi ng onl y i t s own i mmedi at el y associ at ed wi nches and t her ef ore does
not i nt erf ere wi t h car go-handl i ng at adj acent hat chways. Such a derri ck
i s normal l y t o be f ound i n i sol at i on at a hat chway and, j ust l i ke a crane,
i s capabl e of ext remel y f ast operat i on by onl y one, ski l l ed dr i ver
ut i l i zi ng a j oyst i ck cont rol . A commerci al exampl e of a s el f -swi ngi ng
derri ck i s t he Vel l e t ype. Typi cal l y cargo derri cks l i f t bet ween 5 and 15
t onnes sw1, but i t i s not unusual f or convent i onal t ype der ri cks t o be
adapt ed f or l i f t s of up t o 50 t onnes. Some gener al -cargo shi ps are
equi pped wi t h St ul cken derri cks (see Appendi x 1: 6) whi ch, i n some
cases, can saf el y l i f t wei ght s of up t o 450 t onnes, havi ng t he added
advant age of servi ng t wo hat chways i mmedi at el y f ore and af t of t he
l ocat i on of i t s Samson post s. (Nat ur al l y, when chart eri ng general -cargo,
mul t i purpose shi ps, t he l ocat i on, saf e worki ng l oads and capabi l i t i es of
t he vessel s derr i cks may be of paramount i mport ance, and t he broker
act i ng f or a Chart er shoul d ensure t hat he or she i s ent i rel y f ami l i ar wi t h
t he requi rement s of hi s pri nci pal and can properl y eval uat e t he shi ps
proposed f or t he busi ness wi t h regard t o t hei r cargo gear pot ent i al ).
I n a Chart eri ng sense, t he t erm doubl e-ri gged means t hat t wo
derri cks ser ve each hat chway. Moder n mul t i -purpose vessel s are al most

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al ways equi pped wi t h cranes. These ar e usual l y el ect ri cal l y power ed,
havi ng t he advant age over most derri cks of bei ng more ver sat i l e and
capabl e of accur at el y pl aci ng and pi cki ng up cargo f rom a var i et y of
adj acent posi t i ons. Cranes are, however, more sophi st i cat ed and
expensi ve t o mai nt ai n, al so requi r i ng more ef f i ci ent handl i ng t han
derri cks. Fewer cranes are needed t han derri cks, t hough, and t hey are
sel f -cont ai ned i n t hei r own uni t s, not requi r i ng support i ng Samson
post s, et c. Typi cal l i f t i ng capaci t i es of shi pborne cranes r ange f rom 5
t o 25 t onnes sw1, wi t h most modern vessel s t endi ng t owards t he hi gher
capaci t i es, perhaps havi ng t he f aci l i t y t o uni t e t he l i f t i ng capaci t y of t wo
adj acent cranes, t hereby subst ant i al l y i ncreasi ng t he maxi mum capaci t y
e. g. 2 x 25 t onnes cranes equat i ng t o 1 x 50 t onnes. To recap, most
new bui l di ngs are f i t t ed wi t h cranes of around 25 t onnes sw1, derri cks
st i l l bei ng used t o pr ovi de a heavy- l i f t f aci l i t y, where requi r ed.
Cargo Hatches Some el derl y vessel s part i cul ar l y t hose engaged i n
t he short sea t rades wi l l be f ound t o have wooden hat ch covers, whi ch
are covered by t ar paul i ns and t hen cl eaned t o secure t hem and t o
ensure t hat t hey are weat her and wat erproof . Nat ural l y, t hi s i s
ext remel y har d wor k and l abour -i nt ensi ve. Most deep sea vessel s,
however, are f i t t ed wi t h st eel hat ch covers of what i s known as
Macgregor t ype Macgregor s bei ng an organi zat i on whi ch pi oneered
and pat ent ed hat chcover desi gns i n t he peri od f ol l owi ng Worl d War I I,
and whi ch st i l l pl ays an i mport ant rol e i n t he des i gn of cargo-handl i ng
equi pment .
Most hat chcovers ar e opened and cl osed by el ect ri c or hydr aul i c
power and some by wi nches and chai ns. Compared wi t h wooden
hat chcovers t hey are rel at i vel y l abour -f ree but , l i ke derri cks and cranes,
are subj ect t o st ri ngent t est i ng by Cl assi f i cat i on Soci et i es t o ensure t hat
t hey remai n sae and wat ert i ght . Cargo damage by moi st ure may wel l
be f ound t o resul t f rom wat er i ngress t hrough hat chcovers and, as wi t h
cargo-handl i ng equi pment , Chart er Part y cl auses usual l y st i pul at e t hat
Owners wi l l mai nt ai n hat chcovers i n ef f i ci ent , what ert i ght condi t i on.

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Dependi ng upon t he desi gn of t he vessel , t weedecks and cargo
hol ds may be ser ved by one or more hat chways. I n t he case of t he
Freedom ( Appendi x 1: 4) Cargo Hol d/ Tweendeck No. 1 can be seen t o be
ser ved by Hat chway No. 1, wher eas Cargo Hol d/ Tweendeck No. 2 i s
ser ved by Hat chways 2 and 3, Hat chway No. 2 l ocat ed above t he
f orward part of t he cargo hol d/ t weendeck and Hat chway No. 3 l ocat ed
above t he af t er apar t . A si mi l ar pat t ern wi l l be obs er ved over Hol ds 3
and 4. The Chart er Part y descri pt i on of a Freedom Mk I shoul d
t heref ore cont ai n t he expressi on 4 hol ds/ 6 hat ches , whereas an SD14
(Appendi x 1: 3) woul d be descri bed as havi ng 5 hol ds/ 5 hat ches .
Some mul t i -purpose vessel s, however, have what are ref erred t o
as t wi n- hat ches i . e. hat chways l ocat ed by si de rat her t han f ore and
af t as i n t he case of t he Freedom Mk I . The obj ect of t wi n-hat ches i s t o
provi de easy access t o t he si des of a vessel s hol ds and t weendeck
spaces t o f aci l i t at e t he handl i ng of heavy and bul ky art i cl es such as
cont ai ners or, perhaps, rai l way wagons. The mai n di sadvant age of
t wi n- hat chways, however, i s t he need f or a support i ve cent re-l i ne beam
runni ng l ongi t udi nal l y bet ween t he t wo hat cheway openi ngs, (and
somet i mes an ent i re cent re- l i ne bul khead), hamper i ng bul k cargo
handl i ng.

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The t erm open-hat ch i s more commonl y associ at ed wi t h short -
sea vessel s and cont ai nershi ps, appl yi ng where t he hat chway st ret ches
vi rt ual l y f rom one si de of t he wat herdeck t o t he ot her and f rom one end
t o t he ot her. I n i t s open posi t i on i t exposes al most t he ent i re under -
deck area, enabl i ng ext remel y f ast and unobst ruct ed cargo handl i ng,
usual l y by shore equi pment . The syst em creat es i nherent st ruct ural
weaknesses f or l arger vessel s, however, and open-hat ch syst ems are
more or l ess conf i ned t o smal l er t onnage operat i ng i n t he short -sea
sect or, or t o deepsea cont ai nershi ps speci al l y const r uct ed wi t h
compensat i ng doubl e-hul l s see l at er i n t hi s Lesson.
I n most cases t weendeck-hat chways are l ocat ed more or l ess
exact l y beneat h weat herdeck hat chways, t hereby f aci l i t at i ng cargo
handl i ng. They usual l y al so have t he same di mensi ons. However, t hi s
may not be t he case, especi al l y wi t h ol der vessel s, and i t i s good
pract i ce t o check t hi s aspect when chart eri ng t weendeckers.
Sel f Assessment Questi ons
A) Defi ne and expl ai n the terms: -
1) SW1
2) Fl ush-t weendeckers
3) Pad-eyes
4) Cent re- l i ne bul khead
5) Bi l ges
6) Samson post
7) Uni on-purchase

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8) Doubl e-ri gged
9) Open-hat ch
10) Shaf t -t unnel
B) Your pri nci pal s are seeki ng t o chart er a t weendecker f or t he
carri age of bagged cargo, but none of t he candi dat e vessel s ar e
cargo-bat t en f i t t ed. I nf orm t hem of al t ernat i ves t o cargo-bat t ens and
advi se about who, (i n your opi ni on), shoul d 1) suppl y and 2) f i t t hese
al t ernat i ves.
2. Bul kcarri ers Some of t he i t ems cover ed under general -car go vessel s
above i t ems concerni ng f or exampl e, gear and hat chways, can appl y
equal l y t o bul kcarri ers and bul kcarri ers can al so especi al l y si nce t he
i nt roduct i on of st ronger synt het i c cargo-bag mat eri al - be f ound
engaged carr yi ng commodi t i es t hat were once t he mai n preserve of t he
t ween-deck market . Bul kcarr i ers, nevert hel ess, have di st i nct i ve f eat ures
(see Appendi x 1: 2). They are si ngl edeck vessel s, t hose engaged i n
deepsea market s and up t o 50, 000 t onnes deadwei ght si ze f requent l y
(yet not al ways) equi pped wi t h cranes or , occasi onal l y i n ol der desi gns,
wi t h derr i cks. The maj ori t y of bul kcarri ers over t hi s si ze, however, (as
wel l as many modern short -sea t ul kers ), are gearl ess , havi ng no
cargo-handl i ng equi pment t hemsel ves and rel i ant on shore f aci l i t i es t o
be l oaded and di scharged.
They range i n appr oxi mat e si ze f rom coast al craf t of around 100
t onnes t o vessel s of over 250, 000 t onnes deadwei ght and, as t hei r
name i mpl i es, are i nt ended pr i mari l y f or t he t ransport at i on of bul k dr y -
cargo commodi t i es, al t hough t hey can be adopt ed f or t he carri age of
ot her goods-cargoes such as l umber, st eel product s, cont ai ners, and
even mot or cars. Larger bul kcrarri ers of bet ween about 60, 000 and
70, 000 t onnes deadwei ght are usual l y cont rast ed wi t h a beam and draf t
sui t abl e f or l i mi t at i ons i mposed on t he market by t he di mensi ons of t he

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Panama Canal an i mport ant wat er way f or t hi s t ype of vessel , gi vi ng
ri se t o t he t erms panamax .

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Typi cal di mensi ons of a panamax bui l kcarri er woul d be: -
LOA (l engt h over al l ) : 224 met res (735 f t . )
Beam ( wi dt h) : 31. 8 met res (104. 5 f t . )
Draf t : 13. 35 met res (43. 8 f t . )
Summer Deadwei ght : 64, 500 t onnes
Cubi c Capaci t y of : 73, 625 cubi c met res
Cargo Hol ds (2, 600, 000 cubi c f t . )
Hol ds : 7
Hat chways : 7 (each about 14 met res l ong by
13. 5 met res wi de)
Vessel s t oo wi de t o t ransi t t he Panama Canal are t ermed cape-
si ze and usual l y t hi s t erm i s t aken t o mean vessel s i n excess of
100, 000 t onnes deadwei ght , t here bei ng f ew bul kcarri er s bet ween
80, 000 and 100, 000 t onnes deadwei ght si ze. (Appendi x 1: 7).
Bul kcarr i ers of bet ween, say, 20, 000 and 50, 000 t onnes deadwei ght
si ze are f requent l y l oosel y t ermed handy-si zed wher eas t here i s a
speci f i c cl ass of bul kcarri er around 20, 000/ 30, 000 t onnes deadwei ght
desi gned wi t h measurement s enabl i ng t ransi t of t he St . Lawr ence
Seaway, and t hus access t o t he Great Lakes syst em of Nort h Ameri ca,
t hese maxi mum di mensi ons bei ng: -
Lengt h : 730 f eet
Beam : 75 Ft . 6 i nch.
Draf t : 26 Ft . f reshwat er
Hei ght above wat er l evel not t o exceed 117 f t . Vessel s t ransi t i ng
t he Panama and Suez Canal s and t hose t radi ng t o t he Great Lakes
requi re speci al f i t t i ngs i n addi t i on t o bei ng di mensi onal l y sui t abl e, and

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such requi rement s wi l l be deal t wi t h i n great er det ai l i n Lesson 9.
Cargo Spaces Bul kcarri ers have a basi cal l y si mpl e desi gn, as can be
seen f rom Appendi x 1: 2, where superst r uct ure, br i dge and engi nes are
l ocat ed af t i n nearl y ever y case, l eavi ng rel at i vel y unobst ruct ed access
t o cargo hat chways. To avoi d t he expensi ve necessi t y of empl oyi ng
shore l abour t o ensure t hat bul k cargo saf el y f i l l s ext remi t i es of t he
hol ds i . e. i t i s saf el y t ri mmed most bul kcarr i ers ar e const ruct ed
wi t h upper wi ng t anks (see Appendi x 1: 5), somet i mes t ermed t opsi de
t anks , provi di ng sel f -t ri mmi ng f aci l i t i es on t hei r undersi de. These
upper wi ng t anks are used t o carr y bal l ast wat er when t he vessel i s
empt y at sea or onl y part l y l aden, ot her areas used f or t hi s purpose
bei ng t anks l ocat ed f orward and af t ( f ore-peak and af t er -peak t anks)
and, perhaps, a mi dshi ps l ocat ed f l oodabl e-hol d , as di scussed i n t he
general -cargo vessel sect i on.
As some bul k cargoes are rel at i vel y l i ght (e. g. bul k barl ey) and
t hus a vessel s hol d can be f i l l ed bef ore she comes down i n t he wat er t o
her permi ssi bl e l oadl i ne marks, some handy-si zed bul kers ut i l i ze t he
space i n t hese upper wi ng t anks f or cert ai n commodi t i es ( agai n bul k
barl ey mi ght be an exampl e) t hat ar e rel at i vel y f ree-f l owi ng. By l oadi ng
t hrough openi ngs i n t he weat herdeck above t he upper wi ng t anks, t hese
spaces can be drai ned of bal l ast wat er at t he l oadi ng port , washed
t hrough, cl eaned and dri ed, t he cargo t hen f ed i nt o t he vacant spaces,
t hereby usi ng ot her wi se wast ed deadwei ght capaci t y. At di schargi ng
port s, t he cargo i s bl ed i nt o t he cargo hol d i mmedi at el y beneat h
t hrough openi ngs whi ch are seal ed when al l cargo has been di scharged
and prepar at i on made t o t ake on bal l ast wat er. The
by no means uni versal l y
empl oyed di f f i cul t i es of sat i sf act ori l y cl eani ng and dryi ng out
t he wi ng t ank spaces especi al l y i n col d or humi d condi t i ons and t he
i ncreasi ng expense i n human l abour t erms of t he ent i re operat i on.
Puri st s wi l l argue t hat t here are no t rue sel f -t ri mmi ng

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bul kcarri ers , si nce such a vessel woul d requi re sl oppi ng areas l ocat ed
f ore and af t of t he hat chway openi ngs, as wel l as t o port and st arboard
and t hat , t her ef ore, t he expressi on i s mi sl eadi ng. I n real i t y one i s f ul l y
aware of t he l i mi t at i ons of sel f -t ri mmi ng vessel s al t hough, t o be f ai r,
t here may be l egal probl ems when ut i l i zi ng t hi s expressi on, wi t h cert ai n
commodi t i es i n rare si t uat i ons gi vi ng ri se t o ser i ous di sput es. Thus
some owners pref er t o use t he l ess onerous expr essi on easy-t r i mmer
when descr i bi ng t hei r vessel s.
I n t he bot t oms of t he cargo hol ds ar e t ankt ops coveri ng doubl e
bot t om t naks , j ust as f or general -cargo shi ps, and i n some cases (see
Appendi x 1: 5), bul kcarri ers have si de and/ or l ower wi ng t anks . The
upper si des of l ower wi ng t anks i n t he cargo hol ds gi ve ri se t o t he
expressi on hoopered hol ds , al t hough some bul kcarri er desi gns have
vi rt ual l y square bot t omed, f l at hol d f l oors, part i cul ar l y speci al i zed
conf t ai ner -bul kcarrri ers con-bul kers desi gned t o perf orm i n bot h
t he bul k cargo and cont ai ner market sect ors, and needi ng t hi s f aci l i t y
f or t he conveni ent and saf e st owage of cont ai ners and, perhaps
pal l et i zed cargo. (see Appendi x 1: 8). For ot her bul kcarri er t ypes e. g.
col l i ers hoppered hol ds are desi rabl e t o assi st t he saf e securi t y of
bul k cargo and t o mi ni mi ze i t s movement at sea.
Cargo Stowage Bul k cargoes can ver y consi derabl y i n t hei r st owi ng
propert i es e. g. i ron ore st ows around 12 cubi c f eet f or every t onne,
wheras coke may st ow as hi gh as 90 cubi c f eet per t onne. Obvi ousl y,
i n t he cases of i ron ore, f ul l deadwei ght wi l l be reached wi t h cargo
hol ds l i t t l e more t han a t hi rd f ul l , whi l st a cargo of coke wi l l f i l l cargo
hol ds t o capaci t y and t he vessel may t heoret i cal l y be l osi ng pot ent i al
revenue earni ngs because of l ack of space i n cargo compart ment s.
(Unl i ke f ree-f l owi ng bul k barl ey, coke cannot be l oaded i n upper wi ng
t anks, because i t woul d not onl y be ext remel y di f f i cul t and t i me-
consumi ng, i f not i mpossi bl e, t o l oad i t t hrough t he r est ri ct ed deck
openi ngs t o t he wi ng t anks, i t woul d probabl y cont i nual l y bl ock t he
bl eedi ng apert ur es when i t came t o di scharge).

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For heavy cargoes of i ron ore, i t i s i mport ant t hat bul kcarri er s be
l oaded so t hey do not become t oo st i f f and dangerous i n t hei r handl i ng
at sea. Consequent l y, cargo i s normal l y l oaded i n adj acent hol ds say
Hol ds 2, 4, 6 and 8 of a 9 x hol d bul kcarri er (see Appendi x 1: 7) t he
vessel bei ng especi al l y hol d-st rengt hened duri ng t he bui l di ng process
of f aci l i t i es t he demands of t hi s t rade. The facility of carrying cargo in adjacent
holds with others empty is particularly useful for loading or discharging at more than
one port when carrying commodities other than heavy ores.
Cargo Gear Some bul kcarri ers are f i t t ed wi t h sel f -di schargi ng
f aci l i t i es. These may be a si mpl e arr angement by whi ch t he vessel
carri ers i t s own cargo-grabs whi ch can be f i t t ed t o t he shi p s derri cks or
cranes and used t o di scharge or perhaps even t o l oad car go. Some
vessel s have a gant ry arrangement , by whi ch a t ravel l i ng crane
moves l ongi t udi nal l y t he l engt h of a bul kcarri er al ong a gant ry rai l , and
i s t hus abl e t o operat e over any part i cul ar hat chway. Ot her bul kcarri ers,
perhaps desi gned f or a part i cul ar t rade, may be f i t t ed wi t h sophi st i cat ed
di schargi ng apparat us t hat operat es on a conveyor bel t and / or screw
syst em (e. g. Si wert el l Syst em), l oadi ng bei ng l ef t t o shore based
equi pment . Such machi ner y i s usual l y t ai l ored f or a speci f i c cargo t ype
and t rade e. g. bul k cement and i s not normal l y sui t abl e f or a t ramp
bul kcarri er.
Wi t h cert ai n bul kcar ri er si zes, however, shi p s gear i s a def i ni t e
di sadvant age, t rades havi ng devel oped around sophi st i cat ed and
speedy shore-equi pment whi ch needs cl ear, unhi ndered access t o cargo
compart ment s. Consequent l y, most panamax and al most al l cape-si ze
bul kcarri ers are gearl ess and cl ose at t ent i on must be pai d by t hei r
operat ors, chart ers and brokers al i ke, t hat each vessel f i xed f or a
part i cul ar t rade can physi cal l y f i t beneat h shore l oadi ng and/ or
di schargi ng apparat us, not onl y when l aden but , pr i or t o commencement
of l oadi ng and f ol l owi ng di scharge, i n bal l ast condi t i on. The di mensi on
t hat det ermi nes a vessel s sui t abi l i t y i s t he di st ance bet ween t he
wat er l i ne surroundi ng t he vessel and t he t op of her hat chway coami ngs

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f requent l y ref erred t o as t he vessel s ai r-dr af t , and not t o be
conf used wi t h t hat ot her ai r -dr af t bei ng t he di st ance f rom t he wat er l i ne
t o t he t op of t he hi ghest f i xed poi nt on a vessel (see t he Great Lakes
di mensi onal rest ri ct i ons ear l i er i n t hi s Lesson) .

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Cargo Fi tti ngs Unl i ke general cargo vessel s i t i s unusual f or
bul kcarri ers (especi al l y ol der ones) t o be f i t t ed wi t h el ect r i c vent i l at i on,
but many have f i re smot heri ng (e. g. Co2) f aci l i t i es ser vi ng cargo-hol ds.
Most have st eel hat ch-covers, openi ng f or e and af t on t he maj ori t y of
handy-si zed vessel s, whi l st t he l arger vessel s, f rom panamaxes
upwar ds, are f requent l y f i t t ed wi t h hat ch-covers openi ng si deways
when, i n t he open posi t i on t hey cover t he deck bet ween coami ngs and
t he shi p s rai l , support ed by a st eel f ramework t o al l ow shi p s crew and
shore workers t o pass underneat h when movi ng about t he vessel s
decks. Thi s enabl es a bi gger open hat chway space t han woul d
ot her wi se be t he case, t he bet t er t o accommodat e l arge shore-based
cargo handl i ng equi pment and speedi er cargo-handl i ng. Thi s hat ch-
cover syst em i s known as si de-rol l i ng hat chcover (see Appendi x 1: 7).
Speci al i sed Bul kcarri ers We have al ready exami ned some speci al i zed
bul kcarri ers, f or exampl e, t hose desi gned t o t ransi t t he Great Lakes
Seaway and t he Panama Canal , and al so t hose equi pped wi t h sel f -
di schargi ng apparat us and t hus abl e t o t rade t o areas where port
equi pment may be i nadequat e. We have al so encount ered t he
conbul ker equi pped t o cross t he boundari es of t he cont ai ner and t he
bul k cargo market s. There are ot hers, however, and a bri ef descri pt i on
of some woul d be usef ul : -
Loggers Usual l y ar ound 15/ 30, 000 deadwei ght , t hese bul kcarri ers of
part i cul arl y heavy const ruct i on are of t en f i t t ed wi t h derri cks or wi t h
cranes i n t he regi on of 15/ 25 t onnes sw1, capabl e of l oadi ng and
sust ai ni ng heavy l ogs i n addi t i on t o ot her, convent i onal bul k cargoes.
Logs may al so be l oaded on deck, secured by st anchi ons al ongsi de
bul warks (rai l s or st eel sheet i ng runni ng al ongsi de t he edges of t he
weat herdeck), and by heavy chai ns and securi ng t ackl e. St anchi ons
may be of t he permanent st eel var i et y or col l apsi bl e al ong bul warks
adj acent t o cargo hat ches so t hey can be l owered t o l i e hor i zont al l y on
t he deck and al l ow cl ear unhi ndered access bet ween shore and
hat chways essent i al when cargo equi pment i s used f or l oadi ng or

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di schargi ng. Where a l ogger i s not f i t t ed wi t h st eel st anchi ons,
however, t emporar y wooden st anchi ons are somet i mes used by shavi ng
down sui t abl e l ogs f rom t he cargo, t o enabl e t hem t o f i t i nt o st anchi on
socket s i n t he edge of t he weat herdeck adj acent t o t he bul warks. The
subst ant i al const ruct i on of l oggers i s al so of use when carr yi ng heavy
cargoes such as ores, cement or cement cl i nker.
Lumber Carri ers The ai m of t he desi gner of a l umber (or t i mber) carr i er
i s t o creat e suf f i ci ent space i n hol ds and on deck and hat chcover s f or
t he maxi mum amount of t hi s hi gh-st owi ng cargo t o be carr i ed. Once
agai n st anchi ons are essent i al and t he same remarks above under
l oggers appl i es t o l umber carr i ers. Wi t h t he l at t er vessel s, however,
t he chai ns and t ackl e are of a l i ght er const ruct i on so as not t o damage
t he cargo. Shi f t i ng of l umber cargoes at sea i s a r i sk t hat al l t hose
engaged on t hi s t rade dread, and i t i s essent i al t hat no shor t cut s are
t aken when st owi ng and securi ng t he cargo, whi ch must al ways be t o
t he Mast er s absol ut e sat i sf act i on. Ti mber carri ers have cl ear,
unobst ruct ed and squari sh hol ds and wi de / l ong hat chways, somet i mes
f i t t ed wi t h l ongi t udi nal and / or t ransverse support s as a const ruct i onal
saf et y f eat ure.
Because of t he nat ure of t hi s commodi t y, when a f ul l cargo of
l umber i s carri ed, speci al regul at i ons r egardi ng l oadl i nes are appl i ed,
whi ch means t hat an al t ernat i ve l umber l oadl i ne can be used,
permi t t i ng deeper l oadi ng. Thi s i s on t he basi s t hat wi t h a f ul l and
secure l umber deck cargo, vessel buoyancy and i nherent saf et y has
i ncreased, and t he ef f ect i ve f reeboard (t he di st ance f rom t he wat er l i ne
t o a promi nent posi t i on on t he vessel usual l y t he t op of t he
weat herdeck whi ch governs t he posi t i on of a vessel s l oadl i ne) can i n
f act be adj ust ed t o i ncrease cargo i nt ake of t hi s part i cul ar commodi t y.
Wood-chi p Carri ers These vessel s can be as l arge as 40/ 50, 000
t onnes deadwei ght and are speci al l y desi gned f ro t he carri age of hi gh-
st owi ng wood-chi p product s dest i ned f or use i n pul p mi l l s. They are

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usual l y of l i ght const ruct i on and unsui t abl e f or t he carri age of heavy,
dense cargoes such as ores. Nevert hel ess, where t hey can be
empl oyed on a regul ar run - e. g. f rom t he West Coast of the Uni t ed
St at es and Canada t o t he Far East t hey have i n t he past been
adapt ed f or t he pr of i t abl e carri age of mot or cars on t he ot her wi se
val uel ess bal l ast l eg (ret urn j ourney), t hus obt ai ni ng f rei ght -earni ng
abi l i t y on bot h passages.
Ore-Carri ers At the other extreme from wood-chip carriers, cre-carriers
have small, compact cargo spaces because the nature of their trade is
concerned with heavy-dense mineral commodities. Not so many years ago
there was an international fleet of these gearless vessels around 20,000
tonnes deadweight, but the introduction of the more versatile logger offered
stiff competition at the time that ore-terminals worldwide were gearing up
capacity to take cargoes in excess of 100,000 t onnes. Now ore-carri er s
t end t o be i n excess of 100, 000 t onnes deadwei ght and t he l argest dry -
cargo vessel s i n t he worl d ( i n excess of 250, 000 t onnes) are ore-
carri ers, desi gned f or a part i cul ar cargo-run, equi pped wi t h speci al l y
st rengt hened hol ds and t ank-t ops and wi t h no need f or t he sel f -t ri mmi ng
f aci l i t i es of ot her bul kcarri ers.
Bul k Cement Carri ers There are a f ew sophi st i cat ed mechani cal and
pneumat i c bul k cement carri ers, and even t hose t hat act as mot her or
f act ory-shi ps , of f -l oadi ng f rom ot her vessel s and st or i ng or even
baggi ng bul k cement abroad. Of t en t hese vessel s are convert ed f rom
sui t abl y di mensi oned bul kcarri ers, and serve a part i cul ar t rade rout e or
are st at i oned i n a part i cul ars area, t he bet t er t o meet the cement
demands of a near by market . Ot her wi se, f or odd cargoes, ordi nar y
bul kcarri ers can be readi l y adapt ed f or t he carri age of bul k cement or
cement cl i nker (part manuf act ured cement wi t hout t he set t i ng agent ,
gypsum), by t he cut t i ng of smal l hol es i n hat chcovers t o f aci l i t at e
l oadi ng and / or di scharge wi t hout creat i ng unaccept abl e dust pol l ut i on,
t hese hol es bei ng made good t o Cl assi f i cat i on Soci et y sat i sf act i on
bef ore t he vessel l eaves port . Thi s operat i on i s usual l y covered by an

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appropr i at e Chart er Part y Cl ause, under t he t erms of whi ch Chart ers
usual l y rei mburse t he Shi powner f or t he cost of t he hol d- cut t i ng and
rewel di ng operat i on, wi t h t i me so used t o count as l ayt i me, i f
empl oyment on a voyage basi s i s i nvol ved.

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Sel f Assessment Questi ons
A) Defi ne and expl ai n the terms:
1. Gearl ess
2. Top-si de t anks
3. Hoppered hol ds
4. Gant ry cranes
5. Ai r-draf t
6. St anchi ons
7. Si de-rol l i ng
8. Sel f -t ri mmi ng
9. Cape- si ze
10. Conbul ker
B) What i deal sw1 capaci t y and t ype of gear shoul d be f i t t ed on a
vessel t o be used ext ensi vel y i n t he heavy l ogs t rade, and what deck
equi pment i s essent i al ?
3. Cont ai nershi psThese are shi ps speci al l y desi gned f or t he carri age
of cont ai ners and ar guabl y, t he moder n equi val ent of t he car go-l i ner of
t he i mmedi at e post -war years. These l ar ge vessel s t end t o be empl oyed

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on schedul ed voyages on f i xed rout es, t ravel i ng at hi gh speeds of
around 20 knot s or more. They normal l y ser ve sophi st i cat ed cont ai ner
t ermi nal s where ext ensi ve shore equi pment i s avai l abl e and f or t hi s
reason, most of t hem are gearl ess. Thei r t ur n-round t i me i n port i s
ver y short -perhaps onl y a mat t er of hours rat her t han days.
Cont ai ners ar e st owed bel ow t he weat herdeck i n a secure,
cel l ul ar st eel f ramework ( cel l -qui des ), i n hei ght s of ei ght to t en t i ers,
wi t h up t o t hree t o f our t i ers on deck. Just as f or convent i onal cargo-
l i ners, however, t he ol d st abi l i t y rul e of heavy wei ght s at t he bot t om,
l i ght on t op , hol ds good f or cont ai nershi ps. These modern vessel s have
l arge hat chway openi ngs of t he same wi dt h and l engt h as t he hol ds t hey
ser ve, and t he hat ch-covers are f requent l y st eel sl abs ( pont oon
hat ches ) l i f t ed on and of f by shore gear.
Usual l y t here i s l ongi t udi nal f rami ng al ong t he mai n hol d wi t hi n a
doubl e hul l ; t hi s doubl e ski n bei ng requi red t o compensat e f or t he l oss
of vessel st rengt h owi ng t o l ar ge hol d areas and open hat chways. (see
Appendi x 1: 9). Whilst the size of almost all other merchant ships is normally
described in tons (or the metric counterpart tones), the capacity of container ships is
usually expressed in terms of the number of containers it is designed to carry. As the
standard container sizes are almost invariably either 20 feet or 40 feet long, you will
encounter the expression TEU meaning twenty-foot equivalent units. Sizes can
range from a few hundred TEUs to over 4000 and there is even a tendency now to
describe the largest of these ships in terms of FEUs (forty-foot equivalent units).
Charact eri st i cs of t ypi cal cont ai nershi ps are: -

Short Sea Mi ddl e Sea Medi um Large Deep
Sea
Loa 76. 0m 104. 0m 168. 0m 208. 0m
Beam 13. 0m 16. 50m 25. 0m 32. 0m

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Draf t 3. 7m 4200mt 16200mt 35000mt
Speed 13 kt s 15 kt s 17 kt s 8 kt s
The smal l er cont ai ner vessel s are used as f eeder shi ps, f eedi ng
t he hi nt er l and around maj or cont ai ner t ermi nal s wi t h l oaded cont ai ners
i nbound f rom abroad, bef ore f eedi ng cont ai ners f or export back t o t he
cont ai ner t ermi nal on t he ret urn j ourney. Because t hese vessel s ser ve
l ess sophi st i cat ed cont ai ner port s t hey may wel l be geared pr obabl y
wi t h gant r y cranes enabl i ng t hem t o l oad and t o di scharge cont ai ners
wi t h t hei r own shi pboard equi pment .
Rel evant contai ner terms are: -
Fully Cellular : A Containership fully fitted with cell guides.
Ful l y Fi t t ed : A Cont ai nershi p f ul l y f i t t ed wi t h cargo securi ng
wi t h cargo securi ng equi pment , e. g. t wi st er
l ocks, l ashi ngs, et c. wi t h st rengt hened decks.
Shi pt ai ner : A shi p-borne gant ry- crane.
4. RO/ RO Vessel s The concept of RO/RO ( Rol l on / Rol l of f ) shi ps
bei ng sui t abl e onl y f or short -sea ser vi ce has al t ered radi cal l y over t he
past t wo decades, despi t e some dramat i c shi p- l osses bl amed on
i nherent weaknesses i n t he desi gn of t he deck l ayout s and bow and
st ern doors. For areas of t he worl d possessi ng onl y l i mi t ed port
f aci l i t i es, t he RO/ RO shi p wi t h i t s sel f -sust ai ni ng abi l i t y t o l oad and
di scharge provi des an i deal mode of t ransport .
Appendi x 1: 10 shows t he prof i l e, pl an and dat a f or a t ypi cal
deepsea RO/ RO vessel whi ch, usual l y equi pped wi t h i t s own f ork -l i f t
t rucks and t ract ors and, perhaps a crane or t wo, i s capabl e of handl i ng
f rom al ongsi de a whol e range of wheel ed vehi cl es as wel l as pal l et i zed
and cont ai neri zed goods. Access t o t he i nt eri or of RO/ RO vessel s i s
usual l y vi a a st er n ramp whi ch, i n modern shi ps i s capabl e of

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sust ai ni ng ver y heavy l oads of up t o several hundred t ones, and
somet i mes of bei ng sl ewed around and rai sed or l ower ed t o sui t
what ever bert h access may be avai l abl e. Once i nsi de a RO/ RO vessel ,
ramps or l i f t s l ead up or down t o var i ous deck l evel s wher e a whol e
var i et y of goods may be st owed, decks and t ank -t ops bei ng
st rengt hened t o t ake heavy l oadi ngs. Every commodi t y t hat l ends i t sel f
t o t ransport at i on vi a a RO/ RO or a LO/ LO ( Li f t On/ Li f t Of f ) syst em may
be carri ed on t hi s t ype of vessel , whi ch can sust ai n al l ki nds and most
si zes of rol l i ng st ock and merchandi se t hat can be pl aced on wheel s.
Because RO/ RO vessel s f orm an ext ensi on t o t he nat ural road
t ransport at i on envi r onment f or wheel ed vehi cl es, part i cul arl y f or
art i cul at ed l orr i es whi ch can unhi t ch and deposi t t hei r t rai l er on board,
cert ai n RO/ RO shi ps are somet i mes r ef erred t o as t rai l er -carr i ers , t hei r
capaci t y f or t he carr i age of t heses t rai l ers bei ng descri bed i n t erms of
l engt h of avai l abl e l ane met ers . The wi dt h of a l ane var i es accordi ng
t o t he const ruct i on of an i ndi vi dual shi p, t hough t hese must be a
mi ni mum of j ust over 2. 5 met ers (8 f eet ), t o sui t st andar d cont ai ner
di mensi ons. To al l ow adequat e space f or l ashi ng and securi ng cargo,
however, t he real i st i c mi ni mum of a l ane shoul d be 3 met ers (10 f eet ).
The f ami l y of I O/ RO vessel s can be expanded t o i ncl ude f erri es
whi ch f requent l y carry a mi xt ure of passengers as wel l as wheel ed
cargo, and vessel s such as rai l way or t rai n-f erri es compl et e wi t h rai l
t rucks, equi pped wi t h a sophi st i cat ed and sensi t i ve bal l ast i ng syst em t o
enabl e t he shi ps rai l t racks t o be saf el y and securel y connect ed t o t he
shore rai l syst em. Anot her var i et y of RO/ RO i s t he Car Carri er, Pure
Car Carri ers (or PCC s as t hey are usual l y known) bei ng speci al l y
desi gned wi t h f i xed decks and sophi st i cat ed vent i l at i on syst em f or t he
carri age of mot or cars and not hi ng el se. A devel opment f rom t hi s basi c
desi gn i s t he Pure Car and Truck Carr i er t he PCTC i n whi ch t he
cl earance of some decks can be adj ust ed t o accommodat e l arger
vehi cl es as wel l as cars. Al l l end t hemsel ves t o hi ghl y ef f i ci ent cargo-
handl i ng, duri ng whi ch an ent i r e cargo of perhaps 5, 000 mot or cars can

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be dr i ven on or of f i n a mat t er of hours. (Appendi x 1: 11 i l l ust rat es a
PCTC wi t h t ypi cal part i cul ars).
5. Speci al i sed Shi ps
Heavy Li ft Shi ps We have al ready read of general -cargo vessel s f i t t ed
wi t h heavy- l i f t derri cks. But t her e ar e cert ai n art i cl es moved by sea
t hat are f or t oo heavy f or even heavy- l i f t derr i cks capabl e of sust ai ni ng
wei ght s of up t o 450 t onnes. To meet t hi s demand, t he l ast decade or
so has seen t he desi gn and i nt roduct i on of a new cl ass of vessel t he
Heavy Li f t shi p. There are basi cal l y t wo t ypes of heavy-l i f t vessel , t he
smal l er capaci t y uni t rel i ant on l i f t i ng cargo on and of f wi t h i t s own
gear, and capabl e of sust ai ni ng l i f t s of around 500 t onnes uni t wei ght ,
si mi l ar i n some ways t o i t s RO/ RO cousi n. The f ar l arger, second t ype
i s t he semi -submer si bl e , equi pped wi t h a powerf ul bal l ast i ng syst em
by whi ch t anks are f l ooded a requi r ed, suf f i ci ent t o submerge t he
vessel s cargo area, whi ch can be l ocat ed beneat h t he obj ect t o be
t ransport ed e. g. an oi l dr i l l i ng pl at f orm or anot her shi p. Once al l i s
secured i n t he carri age posi t i on, t he bal l ast t anks are pumped dr y and
t he mot her vessel t he semi -submersi bl e i t sel f emerges f rom t he
wat er bear i ng t he wei ght of t he cargo. To di scharge t he cargo, t he
procedure i s reversed. A t ypi cal semi -submersi bl e vessel i s i l l ust rat ed
under Appendi x 1: 12.
Barge Carryi ng Vessel s Cousi ns of heavy-l i f t vessel s are barge
carryi ng shi ps, of whi ch there are several designs. In fact barges can be
readily compared with containers, in that they are self -contained units
capable of being loaded and discharged at the places of origin and
destination of their cargoes, being transported between the two by mother
conveyances. However, the capacity of a barge is much greater than that of
containers and these larger, floating units lend themselves to the carriage of
large unit commodities. The barge uni t s ar e dumb ( unabl e t o sel f -porpel )
but are desi gned f or ease of t ransport under one of sever al carr yi ng
syst ems.

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LASH ( Li ghter Abroad Shi p ) and SeeBee They bot h empl oy a syst em
by whi ch l i ght ers ar e l i f t ed on and of f mot her vessel s, bei ng col l ect ed
and di st ri but ed al ong wat er ways by t owi ng craf t. BACO uses a sys t em
of f l oat i ng barges i nt o t he mot her ship through large bow doors. The
USSR has a particularly extensive LASH and SeeBee system, with mother
ships capable of carrying individual barges of over 1,000 tonnes deadweight.
Frequently, a combination of barges and containers can be handl ed.

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Li vestock Carri ers: Li vestock carri ers can be di vi ded i nto two
categori es- those designed to transport sheep, and those f or l arger
animal s such as cattl e. The obvi ous desi gn difference i s the extra deck
height required for the l arger ani mal s, but both require fodder storage,
extensi ve water suppl y, excel l ent venti l ation, suitabl e methods of animal
waste di sposal , non-sl i p decks, careful l y designed ramps, and
accommodati on for those tendi ng the ani mals. Most l i vest ock carri ers
have been convert ed f rom exi st i ng vessel s, not abl y sheep carri ers f rom
oi l t ankers, but occasi onal l y speci al i zed shi ps are const ruct ed f ro t he
l arger ani mal s. Sheep carr i ers t end t o be f ar l arger t han cat t l e carri ers,
as can be seen f rom Appendi x 1: 13.
Refri gerated Vessel s These vessel s are speci f i cal l y desi gned and bui l t
t o t ransport t he many goods (neat s, f rui t s, f i sh and veget abl es, f or
exampl e) whi ch woul d rapi dl y det eri or at e i n ordi nar y hol d condi t i ons.
Modern reef ers are bui l t wi t h hol ds and decks provi di ng good access
f or st andard si zed pal l et s and f or f orkl i f t t rucks, and are usual l y f i t t ed
wi t h si de-port s openi ngs i n hul l si des permi t t i ng i mmedi at e access t o
cargo decks, t he f l oors of whi ch l i ne up wi t h quaysi des. The l ayout of
t hese vessel s (see Appendi x 1: 14) al so makes t hem sui t abl e f or t he
carri age of mot or -cars whi ch f i t benet h t he rest r i ct ed deck-hei ght s, as
wel l as f or ot her non-ref ri gerat ed and pal l est i sed cargo, al t hough many
of t hese vessel s t rade excl usi vel y i n t he ref ri gerat ed market s on l ong-
t erm cont ract empl oyment . Cert ai n r eef er t rades are l osi ng out t o t he
cont ai nershi p market wi t h t he advent of ref ri gerat ed cont ai ners, but
t here remai ns a subst ant i al and l ucrat i ve reef er market f or t hose wi t h
speci al i st knowl edge and vessel s.
Combi nati on Carri ers There are basically two types of combination carrier
capable of transferring successfully from the distinctive dry-bulk market to
what might be termed the wet-bulk trades. Both tend to be large ships in
excess of 60,000 tonnes deadweight, frequently more than 100,000 tonnes
deadweight. The most common (and usually the smaller) type is the 0B0
(Ore/Bulk Oiler) which unlike the impression given by its name, has sufficient

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cubic cargo carrying capacity to enable it to carry economically not only heavy,
dense ore, but also lighter stowing commodities such as coal and even grains.
The di st i nct i ve f eat ure of an OBO i s t hat t he same cargo compart ment
t hat has been used t o carry a dr y- bul k commodi t y can be t he dr y and
wet t rades may pref er i n i deal ci rcumst ances t o empl oy speci al i zed
bul kcarri ers or t ankers, as t he case may be, but f requent l y Owners of
an OBO have an i nbui l t f rei ght i ng advant age over t hei r speci al i zed
ri val s, i n t hat bal l ast runs can be reduced because of t hei r v essel s
abi l i t y t o i ndul ge i n t wo market s i nst ead of j ust one. Thus, even t hough
t he upkeep of t hese vessel s i s f requent l y hi gher t han f or a si mpl er shi p
speci al i zi ng i n j ust one market sect or, encouragi ng prof i t s can be
achi eved f rom such shi ps gi ven ef f i ci ent market i ng and voyage
pl anni ng.
Appendi x 1: 15 shows an OBO as wel l as t he mi dshi p sect i on of i t s
ri val i n t hi s speci al i zed market t he O/ O ( ore/ Oi l er ). Here t he
ref erence t o ore i s accurat e, Ore/ Oi l ers havi ng separ at e smal l cargo
compart ment s speci f i cal l y desi gned f or t he carr i age of heavy ores, t he
crude oi l part of t hei r cargo commi t ment s bei ng carri ed separat el y i n
oi l -t anks. Ore/ Oi l er s can carr y dr y- bul k commodi t i es ot her t han or es,
but t hey woul d f i l l t hei r cargo spaces ver y qui ckl y and be unabl e t o use
t hei r f ul l deadwei ght . Not onl y t hat , but because t hey are not
const ruct ed wi t h sel f -t ri mmi ng f aci l i t i es, ext ra t i me and expense woul d
be needed t o t r i m t he cargo surf ace l evel . Consequent l y, i t i s ver y
unusual f or Ore/ Oi l ders t o be engaged i n t he carri age of ot her t han
i ron-or e or crude oi l , and t hey t end t o be i n excess of 100, 000 t onnes
deadwei ght , t hi s si ze of cargo bei ng part i cul arl y at t ract i ve t o t hose
engaged i n t he st eel maki ng i ndust r y.
I t shoul d not be overl ooked t hat once i t was f ai r l y common pl ace
f or oi l t ankers whi ch woul d usual l y be engaged i n t he t ransport at i on of
crude oi l occasi onal l y t o carry cargoes of grai n when t he market so
warrant ed t he expense and t i me i n cl eani ng t anks. I n t he l at e 1980 s a
Uni t ed St at es f ood ai d cargo was carri ed i n an Ameri can- f l ag VLCC
(Ver y Large Crude Carri er) i n excess of 250, 000 t onnes deadwei ght ,

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carryi ng a l arge grai n cargo f rom t he Uni t ed St at es West Coast t o
Paki st an. The cargo was l oaded t hrough spout s and di scharged by
vacuvat ors (port abl e suct i on machi nes).
6. Short Sea Short Sea vessel s ar e not j ust smal l er versi ons of deep-
sea t ypes, t hey have modi f i cat i ons pecul i ar t o t hei r t rades. The moder n
dry-cargo coast er needs f l exi bi l i t y of i nt ake of cargoes i n order t o
sur vi ve i n a ver y compet i t i ve busi ness. Because of t hi s t hey are usual l y
const ruct ed wi t h j ust one hol d ser ved by a l arge open- hat ch st eel
hat chcover, t hei r hol d box-shaped (see Appendi x 1: 5) t he bet t er t o
obt ai n good i nt ake and saf e st owage of cont ai ners and pal l et i z ed cargo.
Modern short sea vessel s are bui l t wi t h st eel f l oors t o t hei r cargo
compart ment s, f aci l i t at i ng di scharge by grab, al t hough ol der vessel s
may wel l have a wooden, concret e or t acmacadam sheat hi ng as
prot ect i on t o t he t ank-t ops. Equal l y, many ol der vessel s st i l l have
wooden pl anki ng cover ed by t arpaul i ns, securel y cl eat ed when sea-
goi ng, servi ng as hat chcover s.
Few have sel f -t ri mmi ng f aci l i t i es so t hat f ree-f l owi ng bul k
cargoes, whi ch are l i abl e t o shi f t dangerousl y at sea, ar e secured by a
combi nat i on of baggi ng and st rappi ng part of t he cargo at t he of t he
st ow. For most grai ns t hi s amount s t o around 10% of t he cargo, t he
90% l oaded under neat h t he bags and st rappi ng bei ng i n bul k. Wi th
some part i cul arl y f ree-f l owi ng grai ns, however, (e. g. rape-seed),
perhaps 20% of t he cargo wi l l requi re t o be bagged. Lat est European
desi gns al l ow f or ri ver and canal t radi ng by creat i ng a l ow-prof i l e
vessel , by whi ch t he superst ruct ure l ocat ed at t he af t er end of one hul l
can be hydraul i cal l y l owered t o enabl e t he shi p t o pass beneat h bri dges
and ot her overhead obst ruct i ons, wi t h any mast s bei ng l owered see
Appendi x 1: 16.
Sel f Assessment Questi ons
A) Defi ne and expl ai n the fol l owi ng terms:

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1. Cel l -gui des
2. Pont oon hat ches
3. Sl ewi ng ramp
4. PCTC
5. Semi -subsmersi bl e
6. LASH
7. Si de-port s
8. Vacuvat ors
9. Baggi ng and st rappi ng
10. Low-pr of i l e
B) As an export er, you have a regul ar shi pment of around 1, 000
t onnes mont hl y of harml ess chemi cal resi n i n j umbo bags f rom t he
Uni t ed St at es East Coast t o I t al y.
What are t he al t ernat i ve shi pment s met hods open t o you?
Test Questi on
Li st t he st andard i t ems whi ch you consi der shoul d be i ncl uded i n a
peri od t i me chart er part y cl ause coveri ng t he descr i pt i on of mul t i -
purpose vessel SEAGULL.
For each i t em on your l i st , and ref erri ng where necessary t o t he
mat eri al i n t hi s Lesson, expl ai n f ul l y t he reasons f or i t s i ncl usi on i n your
l i st .

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HANDY MAX BULK CARRIER WITH GEAR.



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COASTAL BULK CARRIER WITHOUT GEAR

CAPE SIZE BULK CARRIER- GEARLESS

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CONTAINER SHIP.

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OIL BULK ORE SHIP.

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DERRI CK SHI P


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REEFER SHI P

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RO RO SHI P

SEMI SUBMERSI BBLE

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CHAPTER- 2
DRY CARGO SHI P TONNAGES, LOADLI NES
DI MENSI ONS AND CARGOES
St udent s may recal l t he di f f erent t ypes of t onnages / l oadl i nes st udi ed i n
I NTRODUCTI ON TO SHI PPI NG. Just t o recal l ,

Tonnages and Loadl i nes When descri bi ng a shi p i t i s qui t e common t o
hear peopl e st at e she i s of so many t ons, and l eave i t at t hat . I n f act,
i n shi ppi ng, t he word t on has many di f f erent meani ngs and shi p
t onnage can be based on ei t her wei ght or on vol ume.
Shi p Tonnage Based on Wei ght: The act ual wei ght of t he shi p pl us t he
wei ght of al l i t i s carryi ng i s t ermed i t s l oad di spl acement t onnage or,
si mpl y di spl acement t onnage . I t i s used t o descri be t he si ze of cert ai n
shi p t ypes not bui l t f or cargo carryi ng (e. g. i cebreakers or naval
vessel s) but has l i t t l e pract i cal val ue i n t he dry cargo market . The
wei ght of an empt y shi p i t s l i ght di spl acement t onnage or l dt f or
short , i s equal l y of t i t t l e val ue t o dr y cargo chart eri ng personnel ,
al t hough i t i s of part i cul ar i nt erest t o t hose engaged i n t he sal e and
purchase of shi ps, f or t he shi p demol i t i on pr i ces are based on t hi s
t onnage, whi ch i s used t o est abl i sh a shi p s st eel wei ght .
The t wo t onnage descri pt i ons of part i cul ar val ue t o t he dr y cargo
market sect or are a shi p s deadwei ght ( dwt ) (ref erred t o several
t i me i n Lesson One) whi ch not onl y happens t o be t he di f f erence
bet ween a shi p s l oaded and l i ght di spl acement t onnages but , more
i mport ant l y, represent s t he t ot al wei ght a shi p can carr y. Thi s t ot al
wei ght wi l l i ncl ude, of course, not onl y cargo, but bunkers, f resh wat er,
st ores, spare part s, et c. Those engaged i n chart er i ng act i vi t i es

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somet i me descri be t hi s t onnage as DWAT - short f or deadwei ght al l
t ol d , t o di st i ngui sh i t f rom DWCC short f or deadwei ght cargo
capaci t y whi ch i s f ound af t er deduct i ng t he amal gamat ed wei ght s of
bunkers, f resh wat er, st ores, spar e part s, et c. f rom t he vessel s
deadwei ght al l t ol d . DWCC t heref ore represent s t he quant i t y of cargo
a vessel shoul d be abl e t o l oad.
I t i s usual t o base ref erences t o deadwei ght on what can be
carri ed when l oaded t o summer marks a vessel s summer
deadwei ght ( occasi onal l y expressed as summer f reeboard ) al l of
whi ch expressi ons can be f ound under t he headi ng of Load l i nes
hereunder. Load Li nes may be ref erred t o as Pl i msol l marks or
Pl i msol l Li nes , af t er t he Br i t i sh pol i t i ci an Samuel Pl i msol l Event ual l y,
i n 1890, a syst em of cal cul at i ng and marki ng a saf e f reeboard (t he
di st ance f rom t he wat er l i ne t o t he weat herdeck) . A drawi ng of t he
act ual marks i s shown bel ow and i t s wi l l be seen t hat t here are, i n
f act , si x l oad l i nes . Thi s i s because account i s t aken of t he worl d s
geography and weat her condi t i ons i n assessi ng t he hazards of any
part i cul ar voyage, as wel l as whet her a shi p i s t ransi t t i ng a sal t or,
t echni cal l y saf er, f resh wat er area. The i ni t i al s on t he l oad l i nes
represent : -

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The act ual l oad l i ne mark (t he di sc wi t h a l i ne t hrough i t ) l i nes up
wi t h t he summer l oad l i ne ref erred t o earl i er. On t hi s mark you wi l l see
t he l et t ers L and R . These rel at e t o t he cl assi f i cat i on soci et y whi ch
sur veyed t he shi p t o det ermi ne t he posi t i oni ng of her marks and
t hereaf t er arranged f or t hem t o be cut - i n and pai nt ed on t he si de of t he
hul l on behal f of t he nat i on i n whi ch a shi p i s regi st ered. I n t hi s case
t he LR st ands f or Ll oyd s Regi st er , but t here ar e more t han f i f t y
cl assi f i cat i on soci et i es i n t he worl d and, f rom t hese, common l et t ers
t hat mi ght be seen coul d be AB (f or Ameri can Bureau), BV ( Bureau
Veri t as), NV (den Norske Veri t as), GL (Germanischer Lloyd), and so on.
Loadline Certificates are issued based on the surveyors calculations and
without these documents, shipowners would find it almost impossible to
t rade. (Lumber carr i ers ref erred t o i n Lesson One, ar e grant ed a second
set of l oad l i nes f or when carr yi ng a deck l oad of l umber l umber
l oadl i nes and can sai l wi t h reduced f reeboard when so l aden).
By i nt ernat i onal agreement , t he oceans and wat er ways of t he
worl d are di vi ded i nt o l oad l i ne zones ei t her permanent summer,
wi nt er or t ropi cal , or seasonal summer, wi nt er or tropical, depending
upon the prevailing weather conditions likely to be experienced at different
times of the year. These zones are shown on a special Load Line Chart
(published in the United Kingdom, for example, by the Hydrographic
Of f i ce).
A shi p passi ng t hrough a summer l oad l i ne zone can l oad down t o
but no f urt her t han t he t op of t he summer l oad l i ne. The same
arrangement s appl y f or t radi ng i n wi nt er or i n t ropi cal zones, but ext ra
al l owance can be made when t radi ng i n what are assumed t o be saf er
f resh wat er condi t i ons. Shi ps wi t h an overal l l engt h of 100 met res or
l ess, ar e f urt her rest ri ct ed when t radi ng i n t he Nort h At l ant i c Ocean i n
wi nt er. Great care must be t aken when pl anni ng a voyage t o t hi nk
ahead and t o avoi d t ransi t t i ng a l oad l i ne zone when t oo deepl y l aden t o
be abl e t o compl y wi t h.

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Shi p tonnage based on Vol ume
I MO Tonnage: I n 1982 a new i nt er nat i onal syst em of measurement
f or shi ps came i nt o f orce, under an I MO (The I nt ernat i onal Mari t i me
Organi sat i on - part of t he Uni t ed Nat i ons) resol ut i on. Thi s appl i ed t o al l
new bui l di ngs, and by 1994 al l vessel s wi l l have t o conf orm t o i t s
provi si ons. The resol ut i on def i nes how a shi p s i nt ernal vol ume shoul d
be measured i n accordance wi t h st andard i nt ernat i onal rul es, resul t i ng
i n cross t onnage and net t t onnge . Gross t onnage i s roughl y t he
vol ume of al l encl osed spaces, and net t t onnage i s cal cul at ed af t er
cert ai n deduct i ons f or non-revenue earni ng spaces ( e. g. al l owances f or
t he br i dge, engi ne room, crew accommodat i on, et c) have been t aken
f rom t he gross f i gure. As a resul t , gross t onnage i s a measure of how
l arge i n vol ume a shi p r eal l y i s, and most saf et y regul at i ons are
t heref ore based on t hi s f i gure. Nett tonnage is more a measure of a ships cargo
spaces, and hence her earning capacity. Harbour and canal dues and similar
expenses are usually assessed against nett tonnage.
Regi stered Tonnage: These are al so known as nat i onal t onnages
appl yi ng t o t hose vessel s bui l t bef ore 1982 whi ch have unt i l 1994 t o
change t o t he new I MO syst em. Unt i l t hen bot h measurement syst ems
wi l l remai n i n pl ace, si nce shi ps of cert ai n f l ags have advant ages under
t hei r exi st i ng nat i onal measurement rul es when compared wi t h exact
si st er shi ps f l yi ng t he f l ag of ot her nat i ons.
Canal Tonnage: Bot h t he Suez and Panama Canal Aut hori t i es have
t hei r own rul es f or the measurement of gross and net t t onnage, upon
whi ch t hei r f ees f or canal t ransi t s are based. There has been t al k of
t hese aut hori t i es adopt i ng t he I MO t onnage regul at i ons i n 1994, but so
f ar no def i ni t e deci si on has been t aken.
Cubi c Capaci t y: As we have already considered in Lesson One, when calculating
cargo intake, not only does a voyage estimator or ships officers have to consider
deadweigtht and load line zones, as well as requirements for bunkers, etc. it is

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necessary to calculate how much cargo the hold spaces will accommodate.
To do t hi s, t wo measurement s wi l l be provi ded by shi pbui l der s f or
vessel s such as bul kcarri ers and general cargo shi ps. These are t o t he
grai n and bal e capaci t i es whi ch are used f or measuri ng cargo space
avai l abi l i t y f or bul k or f or general (non bul k) cargo. The measurement s
can be expressed i n ei t her cubi c f eet of i n cubi c met res; ref erence
books such as shi ps ( e. g. Ll oyd s Regi st er) f requent l y nowadays use
t he met ri c syst em. However, a l arge proport i on of dry cargo market
pract i t i oners st i l l ut i l i ze cubi c f eet when descr i bi ng t he st owage
propert i es of cargo, and so i t i s i mport ant f or al l i nvol ved i n t hi s aspect
of t he i ndust r y t o know t hat : - 1 cubi c met re = 35. 3158 cubi c f eet , as
conversi on cal cul at i ons f rom one measurement syst em t o t he ot her wi l l
f requent l y be requi red.
Grai n Capaci t y: i s t he capaci t y of cargo spaces measured l at eral l y t o
t he out si de of f rames, and vert i cal l y f rom t he t ank t ops t o t he t op of t he
under weat herdeck beams, i ncl udi ng t he ar ea cont ai ned wi t hi n a
vessel s hat chway coami ngs. Grai n capaci t y i s t heref ore an i ndi cat i on
of space avai l abl e f or a bul k cargo not j ust f or bul k grai n.
Bal e capaci t y: i s t he capaci t y of cargo spaces measur ed l at eral l y t o
t he i nsi de of f rames or of cargo bat t ens ( wher e f i t t ed), and vert i cal l y
f rom t he t ank t ops t o t he undersi de (or bot t om) of t he under
weat herdeck beams, but agai n i ncl udi ng t he area cont ai ned wi t hi n a
vessel s hat chway coami ngs. Bal e capaci t y i s t heref ore an i ndi cat i on of
space avai l abl e f or ot her t han a bul k commodi t y - e. g. bagged or bal ed
goods. From this it would appear that grain capacity will always be greater than a
ships bale capacity. This is not necessarily the case, however. The short sea vessel
described in Lesson One, and built with one, box shaped smooth sided cargo hold, for
example, will have one common cubic measurement, identical for grain and for bale
capacity. I n t radi ng, dry cargo shi ps ar e f requent l y descr i bed i n di f f erent
ways. RO/ RO t onnage mi ght be ref erred t o i n t erms of avai l abl e l ane-
met res , f or exampl e, or a cont ai nershi p by t he number of t eu s or

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f eu s i t i s capabl e of handl i ng. Dependi ng upon t he cargo, however,
general cargo shi ps and bul kcarri ers mi ght be descr i bed i n t erms of
summer deadwei ght or grai n capaci t y or, more probabl y i n t he case of
general cargo shi ps, i n t erms of bal e capaci t y.
Tabl e 2. 1 Compari son of Tonnage Measurements
Tonnage General Cargo Bul kcarri er Contai ner

Net t 5, 000 25, 000 8, 000
Gross 7, 000 36, 000 15, 600
Deadwei ght 12, 500 54, 000 17, 000
Load
Di spl acement 18, 000 72, 000 23, 000
Paragraph Shi ps
Many shi ppi ng regul at i ons are based on gross or on deadwei ght
t onnage. Shi powner s t heref ore const ruct vessel s t o t ake advant age of
t he di f f erent regul at i ons, hence shi ps of 499 or of 1599 gross t ons, f or
exampl e, ar e popul ar. Such shi ps ar e known as paragraph shi ps
because t hey t ake advant age of a paragraph of t he regul at i ons.
Di mensi ons: We have al ready encount ered some i mport ant di mensi ons
To recap : -
LOA (Lengt h Over al l ): The ext reme l engt h of a shi p, f rom f ore to af t .
Beam : The wi dt h of a shi p.
I t i s i mport ant t o est abl i sh t he ext reme l engt h and breadt h of a vessel ,
t o ensure t hat passages i n conf i ned wat er ways are possi bl e and t hat i t
i s physi cal l y f easi bl e f or a vessel t o ent er cert ai n port s.

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Draft: The dept h of a shi p on t he wat er. (A f l oat i ng shi p wi l l be deeper
i n f reshwat er t han i n sal t . The di f f erence i s shown on t he Deadwei ght
Scal e as t hat vessel s f reshwat er al l owance .


Ai r Draft:
i ) The di st ance f rom a vessel s surroundi ng wat erl i ne t o t he
hi ghest f i xed poi nt on t he shi p. (Obvi ousl y t hi s can be
subst ant i al l y adj ust ed by speci al i st shi ps such as l ow prof i l e
vessel s see Lesson One).
i i ) The di st ance f rom a vessel s surroundi ng wat er l i ne t o t he t op
of her hat ch coami ngs an i ndi cat i on of whet her a part i cul ar
vessel can maneuver under shor e cargo hanl i ng equi pment .
I n bot h cases t hese measurement s can be var i ed by bal l ast i ng
or de-bal l ast i ng vari ous t anks, but i t must not be over l ooked t hat a
dry cargo vessel s bal l ast t onnage capaci t y wi l l al most cert ai nl y be
f ar l ess t han her deadwei ght capaci t y. Thus, a f ul l y bal l ast ed vessel
wi l l be hi gher out of t he wat er t han i f she was l oaded and where
hei ght rest r i ct i ons are severe, cal cul at i ons shoul d be carri ed cut on
t he basi s of a vessel bei ng f ul l y bal l ast ed not l oaded. . .
i mport ant di mensi ons i ncl ude: -
Hatchways: The l engt h and breat h of hat chways and, f or general
cargo shi ps bot h weat herdeck and t weendeck hat chway si zes. I t i s
occasi onal l y t he case usual l y wi t h bul kcarri ers manoeuvr i ng
beneat h shore cargo handl i ng equi pment t hat i t i s necessar y t o
know di st ances f rom a shi p s rai l t o t he i nsi de edge of her hat ch

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coami ngs and t o t he f ar si de of t he hat chway, as wel l as t he l engt h
overal l f rom f orwar d of t he f oremost hat chway t o af t of t he af t ermost
hat chway.
Tank Tops and Decks: The square f l oor area/ di mensi ons of a
vessel s hol d bot t oms and decks, al so t he hei ght of hol ds and
t weendecks.
Propul si on Al t hough a f ew of t he l arger and ol der vessel s (e. g.
ore/ oi l ers) are equi pped wi t h st eam t urbi nes, t he maj or i t y of dry
cargo vessel s are t oday powered by ei t her sl ow speed or medi um
speed di esel engi nes. Part i cul ar at t ent i on i s pai d i n modern shi ps t o
t he f uel preparat i on equi pment , t hereby enabl i ng vessel s t o burn l ow
cost resi dual I nt ermedi at e Fuel Oi l s ( I FO ) ef f i ci ent l y and wi t hout
harm t o t he engi nes.
Al t hough a f ew ver y modern t ypes (ref erred t o f requent l y as
eco-t ypes eco bei ng short f or economi cal ) use I FO i n bot h t hei r
mai n and auxi l i ar y engi nes, many vessel s consume Mari ne Di esel Oi l
f or t hei r auxi l i ar y equi pment (e. g. generat ors), and al l vessel s carr y
some MDO on boar d f or possi bl e use when a vessel i s ent eri ng or
l eavi ng port and / or whi l st navi gat i ng i n conf i ned wat ers. Thi s i s
because t he r esponse of a mai n engi ne t o a change of t hrot t l e
posi t i on i s ver y sl ow when burni ng I FO. As t hi s coul d af f ect t he
saf et y of t he shi p when an i nst ant aneous response by t he mai n
engi ne i s requi red, t he f uel wi l l be swi t ched t o MDO f or an al most
i nst ant aneous response. Modern vessel s wi l l be f ul l y aut omat ed ,
whi ch i s t o say t hat t he mai n engi ne can be di rect l y cont rol l ed f rom
t he navi gat i ng bri dge.
When negot i at i ng a vessel f or t i mechart er empl oyment , i t i s
usual t o descri be t he dai l y consumpt i on at sea agai nst each of a
part i cul ar range of speeds at whi ch t he t i mechart eres may i nst ruct
t he mast er t o operat e. I t i s al so necessar y t o i ncl ude t he vessel s

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port consumpt i on when i dl e when t he mai n engi ne i s i mmobi l i zed
and t he vessel i s usi ng auxi l i ar y engi nes t o provi de heat , l i ght and
power but cargo gear i s not bei ng used. Port consumpt i on worki ng
al l ows f or ext ra consumpt i on needed t o power a vessel s cargo
equi pment - e. g. here cranes and i t i s usual t o addi t i onal l y
descr i be worki ng consumpt i on agai nst , say, ever y 8 hours
worki ng or per 24 hours, al l gear worki ng .
Fuel oi l s are graded accordi ng t o qual i t y. Heavy f uel oi l i s
usual l y descri bed around 380 c/ s ( cent i st okes) but many panamax
and smal l vessel s burn I FO (I nt ermedi at e Fuel Oi l ) 180 c/ s i n t hei r
mai n engi ne or even bet t er qual i t y- say I FO 150 c/ s. Cert ai n
operat ors al so opt f or hi gher qual i t y gas oi l rat her t han di esel oi l i n
auxi l i ar i es, and wi t h smal l er, short sea craf t , i t i s common t o run
bot h mai n and auxi l i ary pl ant on mar i ne di esel or gas oi l . Finally, it is
frequently the case that time charterers need to know the capacity of a
.. bunkers and plan voyage strategy.
Sel f Assessement Questi on
a) Def i ne and expl ai n t he f ol l owi ng t erms: -
1. DWAT 6. Grai n capaci t y
2. DWCC 7. Bal e capaci t y
3. Summer marks 8. Paragraph shi p
4. Gross t onnage 9. Ai r-draf t
5. Net t t onnage 10. Cent i st oke

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b) Draw a pl an, prof i l e and mi dshi p sect i on of a bul kcarri er. Provi de
a descri pt i on i ncl udi ng deadwei ght , draf t , grai n and bal e cubi c
capaci t y, l oa, beam and ai r draf t s.
Cargoes The var i et y of commodi t i es carri ed at sea i s great er now
t han i t has ever been and t he l i st i s cont i nual l y i ncreasi ng. The
vol ume of t he var i ous seaborne commodi t i es al t ers year by year, of
course, but dr y cargo goods can nevert hel ess be cl assi f i ed i nt o t he
f ol l owi ng cat egori es: -
Grai ns and agri cul t ural product s
Coal s an coke
Ferrous ores
Mi neral s
Ti mber
Met al s
Cement s
Chemi cal s
Ref ri gerat ed goods
Uni t i zed goods
Wheel ed and heavy uni t s
Li vest ock and ani mal product s
Those concerned wi t h dr y cargo chart er i ng shoul d ai m t o have a
compl et e knowl edge of t he physi cal charact eri st i cs, carri age
requi rement s and t rade rout es of t hose commodi t i es wi t h whi ch t hey
are cl osel y i nvol ved, as wel l as a good, worki ng acquai nt ance wi t h
ot her dr y goods. Unf ort unat el y, space does not permi t a t horough
coverage of commodi t i es wi t hi n t he conf i nes of a t en l esson course
i n t he overal l subj ect of dry cargo chart eri ng and so i t i s necessar y
t o di rect t he reader s at t ent i on t o appr opri at e addi t i onal r eadi ng.
The readi ng sel ect ed i s Vol ume 2 of t he SEA TRADI NG seri es,

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Cargoes by Wi l l i am Packard, and t hi s book i s suppl i ed wi t h t he
course mat er i al .
It i s essent i al t o read and di gest t he rel evant cont ent s of
Cargoes chapt er by chapt er whi l st t ackl i ng t he remai nder of t hi s
Course, wherei n at t ent i on i s al so drawn t o Lesson Ni ne, deal i ng wi t h
geographi cal aspect s of dry commodi t i es, i ncl udi ng t hose f act ors
speci f i cal l y af f ect i ng dry cargo t rades. Al t hough cert ai n of t he
book s chapt ers deal wi t h l i qui d t rades, i t does not harm f or t hose
concerned pr i mari l y wi t h t he dr y si de of our i ndust r y t o have a basi c
underst andi ng of t he wet si de , especi al l y si nce t hose engaged i n
dry cargo chart er i ng may wel l become i nvol ved wi t h combi nat i on
vessel s t hat wi l l seek empl oyment i n ei t her market area, dependi ng
upon prof i t i ncent i ves. The remai nder of t hi s Lesson Two wi l l be
t aken up wi t h a br i ef summar y of i mport ant aspect s of t he car ri age of
dray commodi t i es.
Cargo Measurement : Thi s i s al l an i mport ant area f or t he st udent
f or, on cargo measurement depends t he ent i r e st ruct ure of
commerci al shi p t radi ng, t he amount of cargo a vessel can carry, and
t he f rei ght a car ri er wi l l recei ve or a shi pper pays f or t he
t ransport at i on of t hat cargo. Gradual l y t he i nt ernat i onal shi ppi ng
market has moved away f rom t radi t i onal met hods of cargo
measurement based heavi l y on i mperi al or l ocal uni t s, t owards t he
al l embraci ng met ri c syst em. Thus nowadays i t i s more usual t o
encount er met ri c t onnes rat her t han l ong t ons or short t ons t o
descr i be t he wei ght of a bul k commodi t y, or measurement i n met res
rat her t han i n f eet .
The one except i on t o t hi s dr i f t t owar ds met ri cat i on i s t hat of
st owage f act ors , whi ch i s t he amount of space occupi ed by a gi ven
quant i t y of any dr y commodi t y what ever i t s mode of carri age,
whet her i t be l oose (e. g. i n bul k ) or c ont ai ned ( e. g. i n bags or on
pal l et s). I t i s usual nowadays t o descri be t he st owage f act or of a

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commodi t y as per met ri c t onne rat her t han as per l ong t on , but
t he st owage f act or i t sel f i s usual l y descri bed i n t erms of cubi c f act
per t onne i nst ead of cubi c met res per t onne mai nl y because i t i s so
much easi er f or pract i t i oners t o remember st owage f act ors of
part i cul ar commodi t i es i n t erms of cubi c f eet rat her t han i n t erms of
cubi c met res. Consequently, it remains essential to be able to readily and
fluently convert imperial into metric units and vice versa, particularly so for the
following:-
Long t ons t omet ri c t ones
Feet . . t o met res
Cubi c f eet t o cubi c met res
I nches . t o. . cent i met ers

(A chart of usef ul conversi on f act ors can be f ound i n Cargoes on
pages 142/ 143). Some cargoes (l i ke i r on ore) st ow heavi l y and
ot hers ( l i ke coke) st ow l i ght l y. I n f act , ref erence t o Cargoes wi l l
reveal t hat i ron or e wi l l st ow ar ound 13 cubi c f eet per t onne, whi l st
coke requi res around 80 cubi c f eet per t onne. That means t hat a
gi ven space can cont ai n around si x t i mes more t ones of i ron ore
t han of coke. I n t erms of shi ps, i magi ne you are oper at i ng a
bul kcarri er of 5, 000 t onnes deadwei ght cargo capaci t y (dwcc) , wi t h a
cubi c capaci t y i n her cargo hol ds of t wo mi l l i on cubi c f eet . I f asked
t o est i mat e approxi mat e i nt ake of ei t her coke or of i ron ore, you
woul d cal cul at e as f ol l ows: -
2, 000, 000 / 13 = 153, 846 t onnes i ron ore
2, 000, 000 / 80 = 25, 000 t onnes coke
I t shoul d be i mmedi at el y obvi ous t hat t he shi p i s l i mi t ed by her

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deadwei ght t o a maxi mum cargo of i ron ore of 55, 000 t onnes, whi ch wi l l
f i l l onl y approxi mat el y a t hi rd of avai l abl e hol d space, whereas al l hol d
spaces wi l l be f ul l i f l oadi ng coke, but onl y about hal f of t he avai l abl e
deadwei ght wi l l have been used. Thi s i s a f ai rl y ext reme exampl e t o
i l l ust rat e t he rel at i onshi p of cargo st owage f act or versus shi p cubi c
capaci t y and deadwei ght t hat a dry cargo chart eri ng person must
consul t ant l y bear i n mi nd. Nevert hel ess, t he f rei ght rat e per t onne f or
25, 000 t onnes i ron ore t o provi de t he same approxi mat e ret urn t o t he
shi powner.
Wi t h cert ai n shi p t ypes, t he amount of bul k cargo t hat can be
l oaded wi l l be great er or l essor t han f or a di f f erent shi p t ype wi t h an
equi val ent cubi c capaci t y. For exampl e, t weendeckers mi ght suf f er
f rom a rest ri ct ed t onnage i nt ake compared wi t h a sel f t ri mmi ng
bul kcarri er, because t he overhang creat ed by f i xed t weendecks wi l l
i nt erf ere wi t h t he st owi ng of cargo i n t he l ower hol ds, creat i ng
unusabl e, wast ed space see t he i l l ust r at i ons on page 13 of Cargoes .
But not al l cargo, of course, i s carr i ed i n bul k. Much cargo i s
carri ed i n cont ai ners of one ki nd or anot her, f rom t radi t i onal bags
t hrough t o modern pal l et s. Whereas many bul k commodi t i es wi l l f l ow
i nt o t he si des and corners of a shi p s cargo compart ment s, bagged or
pal l et i zed goods must be st owed and of t en cannot f i t bet ween hol d
f rames and, i ndeed, may be i nt ent i onal l y kept cl ear of hol d si des
devi ces such as cargo-bat t ens , i n order t o encour age cargo
vent i l at i on. Thus, as expl ai ned ear l i er i n t hi s Lesson, many dray cargo
shi ps have t wo cubi c capaci t i es grai n (f or measurement of bul k
commodi t i es), and bal e f or non-bul k goods. It follows that a vessels bale
capacity will usually be smaller than her grain capacity, although with certain ship
types such as modern shortsea traders, designed with one large sheer sided box-
shaped hold, the two capacities are the same.
General Cargo Bef ore cont ai nersat i on t he t radi t i onal ( break -bul k )
met hod of movi ng general cargo i n shi ps around t he worl d s oceans and

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wat er ways was by means of a var i et y of cont ai ners , i n bags, bal es,
chest s, barrel s, casks, basket s, or si mpl y by l asi ng goods t oget her.
Gi ven t oday s wi despread usage of t he ubi qui t ous box , much of t he
ski l l (t i me and t edi um) of l oadi ng general cargo vessel s has been
t ransf erred t o packi ng ( st uf f i ng ) cont ai ners at cont ai ner t ermi nal s,
f act ori es and such l i ke. I t i s now rare f or a general cargo vessel t o be
empl oyed f or t he carri age of such a var i et y of general cargo, most of
t oday s l i ner t rades t hat are not t ot al l y cont ai ner i sed dependi ng on
parcel s . Thus, consi gnment s of bagged and/ or pal l et i zed goods wi l l
overst ow smal l parcel s of bul k commodi t i es l oaded i n l ower hol ds,
whi l st t he vessel s weat her deck may be f i l l ed wi t h cont ai ners.
However, i t i s st i l l l i kel y f or a general cargo vessel t o carr y a f ul l
cargo of bagged goods e. g. bagged ri ce or bagged f ert i l i zers and so
t he st udent of t hese l essons must acqui r e knowl edge of t he i mport ance
of vent i l at i on, and met hods of secur i ng, mani f est i ng and t al l yi ng bagged
cargo, at t ent i on bei ng drawn part i cul arl y t o Chapt er One of Cargoes i n
t hi s respect .
Bul k Cargoes Most modern bul kcarri ers are descr i bed by t hei r owners
as sel f -t ri mmers ( see Lesson One and Fi gure 1. 7 of Cargoes ).
However, t hi s expressi on must not be t aken t oo l i t eral l y as meani ng
t hat no ext ra t ri mmi ng of bul k cargo by shore appl i ances i s requi red.
Fi rst l y, not al l bul k cargo f l ows easi l y. For exampl e, bul k scrap met a l
wi l l need caref ul st owage and, because of handl i ng di f f i cul t y, i t i s usual
t o di vi de a vessel s bal e cubi c capaci t y by t he st owage f act or of scrap
met al i n or der t o arri ve at a more real i st i c est i mat e of cargo i nt ake
quant i t y f or t hi s commodi t y.
Secondl y, t he expressi on sel f -t ri mmi ng appl i es normal l y onl y t o
l at eral t ri mmi ng across a shi p s cargo compart ment s, and rar el y t o sel f
t ri mmi ng i n ei t her end, f ore and af t , of a cargo compart ment . The
expressi on appl i es al so t o f ul l hol ds. I t f ol l ows t hat f or a commodi t y
whi ch onl y part l y f i l l s a cargo hol d beneat h t he angl ed, sel f -t ri mmi ng

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upper essent i al t o spread t he cargo acr oss t he compart ment t o render i t
saf e f or seaborne t ransport at i on. Thus t he expressi on must not be
t aken l i t eral l y, al t hough i t i s r easonabl e t o assume t hat a f ul l y l aden
bul kcarri er descr i bed as a sel f -t ri mmer shoul d be capabl e of l oadi ng a
cargo wi t hout shore t ri mmi ng assi st ance.
Nevert hel ess, i f t he t erm sel f -t ri mmer i s used t oo f reel y f or al l
commodi t i es and wi t hout bear i ng i n mi nd t he f ul l part i cul ars of l oadi ng
met hods, i t i s possi bl e t o creat e an expensi ve di sput e. As a resul t ,
some operat ors of bul kcarri ers pref er to use t he t erm easy-t ri mmer ,
whi ch i t i s consi dered conveys a more real i st i c apprai sal of a
bul kcarrri er s capaci t y when l oadi ng bul k commodi t i es.
Dangerous Goods Most shi powners are nat ural l y eager t o excl ude t he
carri age of dangerous goods and t he car go excl usi ons cl ause can f orm
one of t he most cont ent i ous part s of a negot i at i on l eadi ng t o a dray
cargo t i mechart er f i xt ure. The shi powner wi l l seek as much excl usi on
as possi bl e, whi l st t he chart erer wi l l ai m t o have as f ew rest ri ct i ons on
vessel empl oyment as i t i s possi bl e t o negot i at e.
Chapt er Twent y of Cargoes gi ves a basi s on t he subj ect and
readers of t hi s Lesson shoul d read t hose pages i n conj unct i on wi t h t hi s
mat eri al . There ar e, of course, speci al i zed vessel s and shi powners
wi l l i ng t o carry (at a premi um rat e) mot commodi t i es, dangerous or not ,
but anal ysi s of cargoes commonl y excl uded by most shi powner s wi l l
usual l y reveal f our cat egori es of dangerous goods: -
1. Those likely to imperil a ship e.g. explosives,
2. Those likely to harm if in some other way e.g. sulphur.

3. Those of danger t o a vessel s crew or st evedor es e. g. f erro-
si l i con, and

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4. Those goods l i abl e t o damage ot hers e. g. copra.

A l i st of commonl y excl uded cargoes f al l i ng under one or ot her of
t he above cat egori es i s cont ai ned i n Chapt er Twent y, but si nce t he
book was wri t t en a new commodi t y t oxi c wast e wast e shoul d be
added t o t he l i st of undesi rabl es, not onl y of danger t o t hose comi ng
i nt o cont act wi t h i t , but a cargo l i kel y t o be rej ect ed by t he count r y of
dest i nat i on, t hereby creat i ng enormous probl ems f or shi powners f orced
t o carry i t f rom port t o port seeki ng a means of r emoval . Cert ai n
shi powners/ operat or s are ext r emel y st ri ct on what cargoes can or
cannot be carri ed i n t hei r vessel (s), t he l i st expandi ng i t em by i t em on
t he basi s of exper i ence. By compar i son, ot her shi powners seem ver y
rel axed about t he ent i re subj ect and t her eby court ser i ous pr obl ems.
Suf f i ce at t hi s ear l y st age i n t he l esson mat eri al , t o warn st udent s
t hat t he i nt ent i on of a t i mechart erer expressed i n a t i me chart erpart y t o
carry a part i cul ar commodi t y does not remove t he ri sk or t he need t o
i ncl ude a comprehensi ve l i st of excl uded cargoes i n t he cont ract . An
i nt ent i on may be changed t o a choi ce of a dangerous unexcl uded
cargo. Also, following arbitral precedent in New York, the exclusion of petroleum
and/or its products does not exclude petroleum coke, nor, it is believed, would the
exclusion of cement naturally exclude cement clinker.
Summary Having read thus far in this Lesson, the readers attention is now
directed to Chapters One and Two of Cargoes which should now be read.
Thereafter, the remainder of the book should be read as the reader tacles the
remaining lessons in this Course.

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Sel f Assessement Questi on
a) Def i ne and expl ai n t he f ol l owi ng t erms: -
1. Stowage factor 6. Break-bulk
2. Cargo-battens 7. Tallying
3. Angle of repose 8. Hydrospcopic
4. Self-trimmer 9. Cargo manifest
5. easy-trimmer 10. Stowage plan

b) Give the stowage factor, method of packing (if any), and any special
precautions required during loading and carriage for:-
1. Jut e 6. Cement
2. Pert rol eum coke 7. Ferro-si l i con
3. Barl ey 8. Wet hi des
4. Woodchi ps 9. Sal t
5. Sul phur 10. St eel product s


Test Questi on

Under your cont rol i s GANNET a mul t i purpose vessel of 20, 000 mt
dwcc, wi t h f ol di ng t weendecks and a capaci t y of 1, 000, 000 cubi c f eet
grai n and 950, 000 bal es. Al l owance has been made f or draf t, bunkers
and const ant wei ght s.

For each of t he f ol l owi ng commodi t i es, advi se what speci al f i t t i ngs t he
vessel mi ght requi r es, what precaut i ons mi ght be necessar y, and
est i mat e t he quant i t y of cargo t he vessel coul d be expect ed t o l i f t,
comment i ng where appropr i at e on t he reason f or t he cargo quant i t y: -


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1. Bagged f i shmeal 4. Packagd l umber
2. Bul k wheat 5. Bul k f oundr y coke
3. Drummed asphal t 6. Bulk manganese ore

CHAPTER- 3

FREI GHT MARKETS AND MARKET PRACTI CE


The Dry Cargo Chart eri ng Market cannot be ri gi dl y di vi ded i nt o
separat e segment s, but i t i s possi bl e t o i dent i f y l ocal and wor l dwi de
busi ness arenas i n whi ch chart er i ng act i vi t y t akes pl ace. Nevert hel ess,
t he al l -embr aci ng worl d- wi de i nt ernat i onal dr y-cargo mar ket has i t s
rough di vi si ons, accordi ng t o shi p t ype and si ze, and accor di ng al so t o
part i cul ar commodi t i es, whi l st geographi cal market s exi st t hat
concent rat e on regi onal t rades, of t en speci al i zi ng i n smal l er, coast a l or
short -sea as opposed t o deep-sea t onnage. One exampl e of a hi ghl y-
sophi st i cat ed i nt er nat i onal chart er i ng arena i s t hat devel oped around
speci al i st heavy-l i f t busi ness, al t hough f rom t i me t o t i me shi ps may be
empl oyed i n t hi s sect or t hat woul d mor e commonl y be f ound i n anot her
market . Al t ernat i vel y, f or exampl e, t here i s a reef er market ,
compri si ng ref ri gerat ed shi ps and cargoes onl y.
There i s no si ngl e geographi c cent re, si nce t hi s market -pl ace i s
t rul y i nt ernat i onal , busi ness bei ng conduct ed by word of mout h, on t he
t el ephone, or by more modern communi cat i on met hods such as t el ex,
f acsi mi l e or subscr i ber ci rcui t s (e. g. BI MCOM). Al l you need t o
part i ci pat e i n t hi s market i s t he responsi bi l i t y f or some goods - e. g. a
shi p or a cargo t he appropr i at e communi cat i on equi pment and a l ot
of courage. I t hel ps al so t o know what you are t al ki ng about but t hat
i s why you are part i ci pat i ng on t hi s Course. . . was t i me when
such wonders of modern communi cat i on equi pment were not avai l abl e
and f rei ght market s t heref ore devel oped around t radi t i onal shi ppi ng
cent res. Many of t hese hi st ori cal cent res remai n act i ve i n dry -cargo

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shi ppi ng t oday, and part i ci pant are l i kel y t o mai nt ai n of f i ces i n pl aces
such as London, Osl o, Pamburg, Pi raeus, New York, Si ngapore, Hong
Kong and Par i s. There are al so regi onal cent res, such as Janei ro,
St ockhol m and Seoul , f rom whi ch t hose speci al i zi ng i n l ocal l y cont rol l ed
t onnage and cargoes negot i at e l ocal l y or pl ug-i n t o t he i nt ernat i onal
market t o cover t hei r requi r ement s.
The Bal ti c Exchange The onl y physi cal market pl ace i n t he worl d
speci al i zi ng i n t he chart eri ng of dry-cargo shi ps and commodi t i es i s t he
Bal t i c Exchange, i n London. Nevert hel ess members of t he Exchange,
bot h Corporat i ons and i ndi vi dual s are engaged i n numerous ot her
spheres, r angi ng f rom t he sal e and purchase of shi ps and ai rcraf t
t hrough t o commodi t y t radi ng and f ut ures market s. However, t he
l argest dai l y act i vi t y conduct ed on The Fl oor remai ns t hat of t he
i nt ernat i onal day- car go f rei ght market , wi t h i t s chart er i ng of vessel s of
al l f l ags by Chart erers f rom ever y t radi ng nat i on.
The mot t o of t he Exchange- Our Word Our Bond i s t he same
as t hat of t he I nst i t ut e of Chart ered Shi pbr okers, and symbol i zes t he
i mport ance of et hi cs i n t radi ng t he pr i nci pl e of t reat i ng ot hers as one
woul d wi sh t o be t reat ed onesel f , and i t remai ns possi bl e t o wal k on t o
t he Exchange i n a broker member s capaci t y and t o l eave an hour l at er
havi ng verbal l y commi t t ed your Pr i nci pal t o empl oy a shi p or t o provi de
t ransport at i on f or a cargo.
Market Practi ti oners I t can be seen t hat t he persons popul at i ng t he
i nt ernat i onal dr y-car go shi ppi ng market have nat i onal i t i es, knowl edge
and backgrounds as vari ed as t he range of commodi t i es and shi p t ypes
and si zes t hat are t o be f ound. But t he peopl e at l east can be sub-
di vi ded a l i t t l e more cert ai nl y, and no doubt readers of t hi s l esson are
abl e t o pl ace t hemsel ves and/ or t hei r Empl oyers i n one or more of t he
f ol l owi ng cat egori es: -
Charterer Those who chart er shi ps t o carry commodi t i es. There are

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many ki nds of Chart erers, f rom i ndi vi dual s operat i ng smal l Corporat i ons
and concerned onl y wi t h t he carri age of a part i cul ar commodi t y, ri ght
t hrough t o maj or i nt ernat i onal t radi ng-houses, t o whom i nvol vement i n
t he i nt ernat i onal dr y-cargo market (si gni f i cant as t hat may be t o t he
market ) represent s a ver y smal l part of t hei r overal l Corporat e
act i vi t i es. Consequent l y, some Chart er es are i nvol ved as Traders i n
t he worl dwi de purchase, sal e and t ransport at i on of a range of goods
e. g. grai ns, f ert i l i zer s, mi ner al s, et c. ot hers, perhaps Manuf act urers,
Mi ne-Owners, Farmers, Shi ppers or Recei vers, f or a si ngl e commodi t y
or f rom a part i cul ar geographi c ar ea.
St i l l ot her Chart erer s may be st at e-oper at i ons-eg. The Presi dent
of I ndi a (i n ot her wor ds t he I ndi an Government ) Gover nment
empl oyees bei ng gi ven t he t ask of securi ng sui t abl e shi ps f or t he st at e
needs. I t i s a wort hwhi l e exerci se f or t hose l earni ng about t hi s subj ect
t o make a poi nt of st udyi ng as regul ar l y as possi bl e l i st s of report ed
dry-cargo f i xt ures, and t o t ry t o cat egori es Chart er ers i nt o one or more
appropr i at e headi ngs. To hel p you get st art ed, sampl e pages f rom
Fai r pl ay I nt ernat i onal Weekl y Shi ppi ng Magazi ne wi l l be f ound i n
Appendi x 3: 1 l i st i ng represent at i ve f i xt ur es f or part i cul ar weeks a mont h
apart , and not onl y wi l l t hi s t ype of dat a suppl ement what shoul d
al ready have been l earned about shi ps and cargoes i n Lessons One and
Two of t hi s Course, but t rades, t ypes of Chart erers and market s can be
i dent i f i ed by t hose wi t h an enqui r i ng mi nd assi st ed by an at l as.
Shi powners Just as f or Chart erer s, t here i s a wi de vari et y of
Shi powners. Some owner s are of a si ngl e shi p; ot hers of l ar ger f l eet s.
Some concent rat e on shi ps of a part i cul ar t ype (eg. Tween-deckers) or
si zes (eg. Panamax bul kcarri ers). Ot her operat e a var i ed col l ect i on of
vessel s. Some are st at e-cont rol l ed, or run t hei r shi ps under t he f l ag of
t he count r y i n whi ch t hey resi de, whi l st ot hers operat e of f -shore a
conveni ent f l ag, f rom whi ch der i ves t he t erms f l ag of conveni ence .
The t erm Fl ag of Conveni ence was expl ai ned i n I nt roduct i on t o

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Shi ppi ng, but , t o remi nd you, i t may suf f i ce t o say t hat a nat i on of f eri ng
such f aci l i t i es:
1. Provi des anonymi t y f or a shi powner, who may oper at e hi s
vessel (s) f rom behi nd a f acel ess Corporat i on r egi st ered i n
t he same nat i on as t he f l ag f l own by t he vessel (s).
2. Gi ves f reedom f or t he vessel t o be manned by a crew i n
what ever numbers or nat i onal i t y t he shi powner sel ect s, at
what ever wage scal e t he crew/ owner negot i at es.
3. Levi es a ver y smal l t ax agai nst t he vessel ownershi p and no
t axat i on agai nst t he earni ngs of t he vessel . Some are more
concerned about t he qual i t y of t he vessel management and
condi t i on t han ot her s, but i t i s f ai r t o say t hat some of t he
best -mai nt ai ned shi ps i n t he wor l d f l y a f l ag of conveni ence,
as wel l as some of t he worst .
Many shi powners operat e f rom one or more of t he t radi t i onal or
regi onal cent res t hat mai nt ai n an i mport ant presence i n t he
i nt ernat i onal dr y-car go market . Ot hers operat e t hei r ent er pri ses f rom
t hese or f rom l ocat i ons i n t hei r own count ry, al t hough (i n or der t o avoi d
t axes l evi ed agai nst shi p-earni ngs) of t en under an agency agreement
wi t h t he of f -shore owni ng Corporat i on of f i ci al l y l ocat ed, perhaps, i n a
more exot i c and conveni ent part of t he worl d.
Operators Thi s i s a t erm used t o descri be an organi zat i on or i ndi vi dual
exper i enced i n t he market and i n i t s mechani sms, set t i ng out t o creat e
i ncome f rom t radi ng i n shi ps and cargoes. Some operat ors speci al i ze
i n secur i ng shi ps on chart er f rom shi powners, t hereaf t er hopi ng t o re-
empl oy t he shi p(s) t o ot her Chart er ers at a hi gher f rei ght / hi re rat e,
t hereby secur i ng a prof i t . Ot her operat ors concent rat e on secur i ng
cont ract s f or t he carri age of cargoes and, by f i xi ng-i n out si de shi ps at
l ower f rei ght rat es, t hereby cover t hei r commi t ment t o t he ori gi nal

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Chart erers and, at t he same t i me, make t hemsel ves a pr of i t .
Cert ai n operat ors t rade i n bot h shi ps and cargoes and, at any one
t i me, have a mi x of short , medi um and l ong-t erm commi t ment s t o
Chart erers and/ or shi powners, needi ng great ski l l and a reasonabl e
l evel of good f ort une t o maxi mi se pot ent i al ret urns oper at ors perf orm
t hei r undert aki ngs perf ect l y wel l , i t must be appreci at ed t hat i nevi t abl y a
f ew oper at ors wi l l become bankrupt , bei ng unabl e t o di scharge t hei r
commi t ment s sat i sf act ori l y. Thi s i s a ri sk t hat operat ors and t hose
t radi ng wi t h t hem have t o consi der and, ul t i mat el y, may have t o bear.
Nonet hel ess, operat ors nowadays f orm a vi t al el ement of t he
i nt ernat i onal dr y-cargo market and are a promi nent f eat ure of
i nt ernat i onal t radi ng.
Operat or who empl oy a shi p and t hen re-empl oy ( or r e-l et ) t hat
vessel f or f urt her busi ness, chart er i ng her out i n a new rol e, ar e
descr i bed as Di sponent or Ti me- Char t er Owners . Some opr at ors,
havi ng secured a vessel f or a per i od, onl y t o f i nd t o t hei r good f ort une
t hat f rei ght rat es i ncrease subst ant i al l y i n t hei r f avour, are l i abl e t o re -
l et t he vessel t o a Chart erer or t o anot her Operat or, t hereby l ocki ng -i n
i n a prof i t f or t he remai nder of t hei r commi t ment t o the ori gi nal
Shi powners. I t i s not unusual f or chai n of several Di sponent Owners t o
st ret ch bet ween an event ual Chart erer and t he ori gi nal Shi powners.
Shi pbrokers The i ndi vi dual s or Corporat i ons who, act i ng as brokers i n
t he mi ddl e of t hi s market -pl ace of Chart erers, Shi powners and
Operat ors of al l Corporat e si zes and of many nat i onal i t i es, i dent i f y
suppl y and demand f or shi ps and cargoes and t hereby hel p t he mai n-
pl ayers t o secur e cargoes f or t hei r shi ps and shi ps f or t hei r car goes. I n
ot her words, Shi pbrokers provi de t he l ubr i cat i on t hat enabl es t he
market mechani sms t o f unct i on. A shi pbr oker s i ncome i s i n t he f orm of
t he reward of commi ssi on (known al so as brokerage ) pai d f or a
successf ul i nt roduct i on and negat i on bet ween Shi powner and Chart erer
- l eadi ng t o a f i xt ure . Even af t er much hard work and expense, a

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negot i at i on t hat does not l ead t o a f i xt ure wi l l normal l y resul t i n no
payment of any ki nd t o t he Shi pbroker i n t he mi ddl e. Thus, Shi pbrokers
are nat ur al l y keen on f i xi ng . Near mi sses, however, exci si ng, are not
onl y pr of i t l ess but a drai n on resources, t i me and energy. ( More
i nf ormat i on about commi ssi ons wi l l be f ound i n Lesson Fi ve, under t he
headi ng Fi nanci al El ement s of Chart erpart i es).
Some Shi pbrokers are speci f i cal l y hi red as empl oyees by
Shi powners or by Chart erers t o work t hei r t onnage or cargoes. Most ,
t hough, are separat e i ndi vi dual s or Corporat i ons act i ng f or pri nci pl es i n
an excl usi ve or semi -excl usi ve capaci t y or f i xi ng as an opport uni t y
present s i t sel f , as compet i t i ve brokers. The t erm Shi pbroker i s,
however, wi de-rangi ng. Ot her f unct i ons t han t hat of a dr y-cargo
Shi pbroker abound. Act i vi t i es, f or exampl e, cover i ng Port . Agency
work; t he Sal e and Purchase or shi ps, t he empl oyment of speci al i st
vessel s such as t ankers of of f -shore craf t ; Li ner Agency and Shi p
Mangement . Al l ar e rol es i n whi ch Shi pbrokers wi l l be f ound. I n t hi s
Course, however, we wi l l be concent rat i ng on t he rol e of dry-cargo
Shi pbrokers.
A Shi pbroker speci al i zi ng i n act i ng f or merchant s seeki ng shi ps t o
carry cargoes may be known as a chart eri ng broker or as a chart eri ng
agent and, as not ed above, such a brot her may be ei t her t he empl oyee
of t he merchant s, deal i ng sol el y wi t h t hat merchant s busi ness, or t he
broker may be ret ai ned on an excl usi ve basi s i . e. : t he merchant s
busi ness i s her or hi s company s t o handl e excl usi vel y. Thi s excl usi vi t y
may be l i mi t ed t o a chart eri ng cent re e. g. excl usi ve i n London or i t
may be worl dwi de. Cert ai n merchant s pref er t o empl oy a chai n of
semi -excl usi ve brokers t o cover several shi ppi ng cent res, perhaps
f eel i ng t hat hi s wi l l enabl e a more t hor ough coverage of t he market f or
sui t abl e shi ps, and t he brokers concerned may possi bl y descr i be
t hemsel ves as di rect brokers f or t he merchant s concerned.
A Shi pbroker i n once cent re may have correspondent brokers

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t hat wi l l be used co-operat i vel y t o seek sui t abl e t onnage or cargoes i n
anot her cent re. Most brokers wi l l act compet i t i vel y i f they f i nd a
sui t abl e non-excl usi ve shi p f or a non-excl usi ve cargo duri ng t hei r
f orays around t he i nt ernat i onal market pl ace, and a f ew mer chant s wi l l
not empl oy brokers i n an excl usi ve rol e but pref er t o t reat al l brokers as
compet i t ors wi t h one anot her, rel easi ng det ai l s of t hei r requi r ement s on
t o t he f rei ght market as wi del y as possi bl e and negot i at i ng t hereaf t er
wi t h t he Owners of any sui t abl e shi p t hat i s proposed t o t hem t hrough
whi chever broki ng channel t he Owner sel ect s.
Shi pbrokers are nat ural l y keen t o secure excl usi ve account s.
Not onl y does not brokerage t hese cr eat e pr ovi de valuable financial
underpinning to their company, but working for an exclusive principal
enables the broker to exercise his or her full professional potential in terms
of providing a continuous flow of market information and expert advice.
Principals operating competitively sometime tend to push their brokers into a
purely dealer role. Few can afford to rely totally on exclusive accounts,
however, and most brokers compete against others for additional i ncome.
I t i s t heref ore i mport ant f or Shi pbroker s t o ci rcul at e det ai l s of
new busi ness orders - as soon as possi bl e, and t o mai nt ai n good
and cl ose cont act not onl y wi t h t hose pr i nci pal s pr ovi di ng busi ness, but
al so wi t h correspondent br okers and wi t h t hose represent i ng
Shi powners, whose vessel s t hey may need t o f i x. Even when t here i s
no part i cul ar order t o quot e, i t i s advi sabl e t o mai nt ai n char t eri ng and
shi powni ng rel at i ons current and good-t empered, i n order t o f ost er
rel at i onshi ps and, hopef ul l y, t o make i t easi er t o concl ude f ut ure
busi ness.
Cert ai n Shi pbrokers speci al i ze i n f i ndi ng and f i xi ng cargoes f or
t he shi ps of excl usi ve and semi -excl usi ve cl i ent Shi powners,
mai nt ai ni ng a l i st of open t onnage expect ed t o become avai l abl e i n t he
weeks ahead and, j ust as ot her Shi pbr okers ci rcul at e det ai l s of
avai l abl e cargoes, so t hey ci rcul at e t hi s t onnage l i st t o Chart er i ng

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Brokers and t hei r pri nci pal s, i n t hei r quest t o l ocat e sui t abl e cargoes.
The l arger Shi pbroki ng compani es wi l l probabl y have br oki ng st af f
represent i ng bot h Chart eri ng and Shi powni ng cl i ent s, as wel l as t hose
act i ng i n a compet i t i ve capaci t y.
But securi ng a f i xt ure i s onl y part of a Shi pbroker s
responsi bi l i t y. Fol l owi ng hi s f unct i on as t he sol e or one of sever a l
brokers i nvol ved i n negat i ons l eadi ng t o a f i xt ure t he chart erers
Shi pbroker t hen has t he t ask of : -
a) Drawi ng up t he char t erpart y f ai t hf ul l y recordi ng al l t hat has
been agreed,
b) Deal i ng wi t h any subsequent l y amendment s and/ or
addi t i ons t o t he negot i at i ons
c) Handl i ng communi cat i ons bet ween t he part i es, and
d) Deal i ng wi t h f i nanci al exchanges eg payment s of f rei ght s,
voyage bal ances and hi res.
Al t hough i t i s nor mal pr act i ce f or a Chart er ers s Shi pbroker
act ual l y t o dr aw up chart erpart i es, t he Shi powners broker must check
t he draf t versi on of t hat document , and at t end t o t he ot her act i vi t i es
det ai l ed above on behal f of hi s own pri nci pal . Consequently, most
medium-sized and large shipbroking companies maintain a post -fixture
department, the duties of which are to handle efficiently the operations of a
concluded fixture, leaving the front-line broker to concentrate on the fixing of
further business. With smaller companies, or i ndi vi dual s, however, t he
broker wi l l handl e t he ent i re operat i on f rom ori gi nal negat i ons t hrough
t o t he f i nal f i nanci al t ransact i on.
A t ypi cal deep-sea dry cargo f i xt ur e wi l l i nvol ve at l east t wo

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Shi pbrokers one represent i ng t he Shi powner, t he ot her t he Charterer
sometimes there will be more brokers in the chain. Whereas it is
comparatively unusual for j ust one Shipbroker to be employed on a deep-
sea dry-cargo fixture, for short -sea and some specialized trades
occasionally only one Shipbroker will be engaged between two principals.
Thus more than ever, if acting as a sole Shipbroker, that broker must act in
a scrupulously professional manner, using all his endeavours to promote
harmony in the negotiations an in post-fixt ure act i vi t y.
Tradi ng The dr y-car go shi ppi ng market i s cl osel y i dent i f i ed wi t h l et t ers
of credi t and t hese document s f requent l y i nf l uence chart erpart y t erms
and condi t i ons and t he manner i n whi ch bi l l s of l adi ng are worded and
rel eased, and i n whi ch f rei ght i s pai d. I t i s t heref ore vi t al t hat t hose
engaged i n t hi s part of t he i nt ernat i onal shi ppi ng i ndust ry have a good
basi c knowl edge of al l aspect s of i nt er nat i onal t rade. Frei ght s wi l l be
deal t wi t h i n Lesson Fi ve, and t radi ng document s, such as bi l l s of
l adi ng, i n Lesson Ei ght . Nevert hel ess, a br i ef acquai nt anceshi p wi t h
t radi ng pr act i ces at t hi s st age of t he Course wi l l assi st i n underst andi ng
t hi s and t he f ol l owi ng Lesson.
Those merchant s sel l i ng t hei r cargoes as i s/ where i s coul d be
sai d t o be sel l i ng f ob , short f or f ree on board , t he cargo bei ng
del i vered board a vessel f ree of cost t o ei t her t he Carri er (t he
Shi powner) or t he Buyer/ Recei ver of t he goods. Of course, i t mi ght be
negot i at ed speci f i cal l y t hat as cour se, i t mi ght be negot i at ed
speci f i cal l y t hat as i s/ where i s means j ust t hat not f ob and t he Buyer
wi l l have t o make arrangement s f or st or age of t he goods, t ransport at i on
t o t he carr yi ng vessel and event ual l oadi ng. Under st ri ct f ob t erms,
however, t he Sel l er wi l l arrange st orage and l oadi ng t he car go abroad,
l eavi ng a Buyer t o arrange t he chart eri ng of a vessel , payment of
f rei ght , i nsur ance of t he goods and del i very t o t he Recei ver at t he port
of di scharge. Var i at i ons may be f ob ( f ree on quay ) and f ow (f ree on
wharf ), under bot h of whi ch t erms a Sel l er undert akes t o del i ver goods
t o t he l oadi ng pl ace, l eavi ng l oadi ng procedures and cost s t o be

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arranged by t he Buyer.
Where a Sel l er arranges a sal e C & F (cost and f rei ght ), goods
are sol d on t he basi s t hat t he Sel l er hi msel f arranges carri age and
delivery to the Buyer, cif (cost, insurance and freight) stipulating that in addition
the Shipper arranges and pays for insurance. No t wo cont ract s are
necessari l y i dent i cal , and i t behaves al l concerned t o f ol l ow caref ul l y
basi c saf eguards and t o avoi d document ary short cut s. A Sel l er wi l l not
wi sh t o rel ease hi s propert y unt i l he i s assured t hat t he correct payment
wi l l be saf el y recei ved by t he t i me of t hi s rel ease. Equal l y, a Buyer wi l l
be rel uct ant t o pay f or goods whi ch have not been saf el y recei ved and /
or have not been conf i rmed as bei ng i n t he condi t i on descri bed i n t he
cont ract . Furt hermore, t he t ransact i on wi l l perhaps be compl i cat ed by
Sel l er and Buyer bei ng l ocat ed t housands of mi l es away f rom each
ot her, wi t h t he goods perhaps bei ng l ocat ed f ar away f rom ei t her part y.
The t ransf er of goods and money obvi ousl y t ake pl ace at a t i me
and i n a manner whi ch ensures t hat bot h part i es are sat i sf i ed t hei r
cont ract has been pr oper l y honour ed. There are various ways of achieving this
objective, depending on market forces (ie. On the pressure or otherwise for a Seller or
a Buyer to trade) and on degrees of trust between the parties concerned. Perhaps
t he si mpl est means of al l i s f or a Buyer t o pay i n advance f or goods
eg. Cash wi t h or der but , as we have seen, Buyers are not at al l keen
t o t rade i n t hi s manner. I t i s not uncommon, t hough, f or a cash deposi t
t o make upon si gni ng a sal es cont ract .
The opposi t e case i s where goods and t hei r document s are
despat ched, t he Sel l er awai t i ng payment agai nst hi s i nvoi ce. I n t hi s
case t he Sel l er i s f i nanci al l y exposed, al t hough he may not worr y
undul y provi di ng he has i mpl i ci t f ai t h i n t he i nt egri t y of the Buyer.
Where ei t her Sel l er or Buyer are t hus exposed, however, t hey suf f er
l oss of cash-f l ow i n t hat f unds are t i ed up awai t i ng f i nal i zat i on of
t radi ng arrangement s. For t hi s reason al one, t hese payment met hods
are unpopul ar, qui t e apart f rom t he ri sks i nvol ved. A sat i sf act or y

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al t ernat i ve and one wi del y ut i l i zed i s f or t he Buyer t o draw up and t o
i ssue a document ar y l et t er of credi t t hrough a bank of good reput e,
sat i sf act or y t o t he Sel l er. A document ary l et t er of credi t may be
revocabl e or i rrevocabl e , al t hough t he f ormer, bei ng open t o
cancel l at i on or amendment by a Buyer provides little security for a Seller
and is therefore rarely utilized. Irrevocable letters of credit instead are
commonly used and under the terms of such a document, the bank involved
wil l undertake to pay the Sellers without fail (i.e irrevocably) but only when
appropriate pre-conditions have been met within the time stipulated, these
pre-conditions and times being clearly specified in the letter and usually
being scrupulously adhered to by the bank.
Maj or precondi t i ons speci f i ed i n a l et t er of credi t nat ural l y
i ncl ude some saf eguard i n respect of t he condi t i on of t he goods
recei ved and, si nce i t i s i mpract i cabl e f or a bank t o exami ne t he goods
t hemsel ves, bankers wi l l of t en rel y sol el y upon t he descri pt i on of t he
condi t i on of t he goods as provi ded i n a bi l l of l adi ng ( see Lesson
Ei ght ). If a Shi powner (or a Shi p s Mast er) conf i rms t hat cargo recei ved
aboard i s i n good condi t i on at t he port of l oadi ng, bi l l s of l adi ng wi l l be
i ssued cont ai ni ng no adverse r emarks about t he condi t i on of t he cargo-
i n ot her words unqual i f i ed or cl ean bi l l s wi l l be i ssued, and t hese ar e
f requent l y a pre-requi si t e bef ore a l et t er of credi t can be honoured.
Havi ng i ssued cl ean bi l l s at a l oadi ng port , t he Shi powner assumes
responsi bi l i t y f or t he carri age of t he cargo and f or i t s saf e del i ver y i nt o
t he cust ody of t he event ual hol der of t he bi l l (s) of l adi ng at t he port of
di scharge, when t he cargo shoul d be i n subst ant i al l y t he same
condi t i ona as recei ved on board.
Ot her t han bi l l s of l adi ng, document s commonl y requi r ed as pre-
requi si t es t o rel ease f unds under a l et t er of credi t are : -
1) I nsurance papers (ei t her a pol i cy or cert i f i cat e) i n accordance
wi t h t he sal e agreement .

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2) I nvoi ces coveri ng t he goods, and,
3) Cert i f i cat es of ori gi n of t he goods.
A f urt her met hod of t ransact i ng i nt ernat i onal payment s i s by bi l l
of exchange , a t radi t i onal and versat i l e document whi ch can be used
ei t her as t he vehi cl e of payment under a document ar y l et t er of credi t , or
i n pl ace of t he l et t er of credi t .
Market Reporti ng As wi t h many prof essi ons, i t i s of l i t t l e use l earni ng a
l arge amount of i nf ormat i on and expert i se i f you are unabl e t o
communi cat e t hi s knowl edge t o a t hi rd part y. The whol e basi s of a
Shi pbroker s worki ng l i f e i s based on t he gi vi ng of i nf ormat i on and
advi ce and, whi l st a cert ai n amount can be done verbal l y, a great deal
of communi cat i on i s i n wr i t i ng. Consequent l y, al l t hose engaged i n
shi ppi ng, and Shi pborkers i n part i cul ar, must gai n exper i ence and
abi l i t y i n t he preparat i on of wri t t en report s t o t hei r pr i nci pal s and
seni ors. Some of these report s wi l l be abbrevi at ed, perhaps by t el ex
message, ot hers l engt hi er , bei ng desi gned f or t ransmi ssi on by f acsi mi l e
or by l et t er. Some wi l l concent rat e on a r el at i vel y smal l market sect or
perhaps desi gned t o provi de dat a on t he shi pment of a part i cul ar
commodi t y, shi p t ype or si ze, or geographi c regi on, report i ng f i xt ures,
avai l abl e cargoes, t radi ng deal s, market gossi p, et c.
Ot her report s wi l l be of a general nat ure, i nt endi ng t o i l l ust rat e i n
overal l t erms t he st at e of t he f rei ght market . One such exampl e i s t hat
provi ded by London Brokers, Gal brai t h Li mi t ed, i n Appendi x 3: 2,
wherei n t he dr y-cargo panamax, cape-si ze and handy-si ze market s are
report ed upon br i ef l y t oget her wi t h rel evant report ed f i xt ures, t he
weekl y report desi gned f or mai l i ng t o var i ous cl i ent s, not one i n
part i cul ar. One of t he f asci nat i ons of t he i nt ernat i onal dr y-cargo f rei ght
market i s t hat one can see i n day t o day t radi ng act i vi t i es t he ef f ect s of
f ar-of f pol i t i cal and cl i mat i c event s af f ect i ng t he demand t he demand f or
shi ps and f or cargo-space and, consequent l y, f rei ght rat es. A

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worl dwi de depressi on i n t rade wi l l ul t i mat el y have i t s ef f ect on t he
shi ppi ng market and shi ps wi l l l ay-up f or want of prof i t abl e empl oyment .
On t he ot her hand, a buoyant f rei ght market wi l l resul t f rom act i ve
t radi ng and t here mi ght be t oo f ew shi ps t o sat i sf y demand, l eadi ng i n
t urn t o hi gh f rei ght i ncome f or t hose Shi powners/ Oper at ors f ort unat e
enough t o be i n a posi t i on t o t ake advant age.
Read your nat i onal newspaper wi t h a vi ew t o t ransposi ng t he
event s recorded i n t he general news, pol i t i cal and busi ness pages i nt o
what you bel i eve wi l l be t he ef f ect on t he dr y-cargo shi ppi ng market s,
whet her l ocal or i nt ernat i onal . Wi l l t he bankrupt cy of a grai n deal er
seri ousl y af f ect f rei ght rat es f or that particular market sector and
whether for better or for worse? And what about a serious famine and
subsequent aid-relief cargoes destined for a beleaguered community in the
Third World? The political consequences of changes of Government in
Eastern Europe. What effect will they have on immediate, medium and long
term trade in, for example, grain? Your source of information in producing reports
for your principals should be obtained not only from market sources but relative also,
every now and then, with reference to the probable effect of outside events. After all,
your particular freight market does not exist in isolation from others or from the effects
of world trades, events and politics.
Sel f Assessment Questi ons
1. Under what headi ngs do t he mai n pr act i t i oners i n t he dry-
cargo f rei ght market f al l ?
2. I n what di f f erent rol es may a dr y-cargo chart er i ng broker be
act i ng?
3. What i s t he mot t o of t he Bal t i c Exchange?
Methods of Shi p Empl oymnet These can conveni ent l y be di vi ded i nt o
t he f ol l owi ng mai n el ement s

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1. Voyage Chart eri ng
2. Ti me Chart er i ng
3. Bareboat Chart eri ng
4. Cont ract s of Af f rei ght ment
5. Joi nt Vnet ur es
6. Shi ppi ng Pool s
7. Parcel l i ng
8. Proj ect Cargoes
1. Voyage Charteri ng: Voyage Chart er i ng occurs when a vessel
i s empl oyed f or a si ngl e t ri p, l oadi ng cargo f rom one or more port s f or
di scharge at one or more port s. (Those f i xt ures l i st ed under t he
headi ngs Grai n, Coal and I ron Ore i n Appendi x 3: 1, f or exampl e, ar e al l
voyage f i xt ures). I n ret urn f or t he carri age of t he cargo and, perhaps
f or t he expenses of l oadi ng and / or di schargi ng t he cargo, t he
shi powner wi l l recei ve monet ar y reward t ermed f rei ght . Thi s f rei g ht
can ei t her be i n t he f orm of a l umpsum payment or, more commonl y, i t
wi l l be payabl e pro rat a i n respect of t he quant i t y of cargo carri ed,
usual l y so much per t onne. I t i s normal t o speci f y t he amount of t i me a
Chart erer i s al l owed f or l oadi ng and di schargi ng t he vessel t he
l ayt i me and shoul d t hi s t i me be exceeded, t hen l i qui dat ed damages
t ermed demurrge wi l l usual l y become payabl e. The dates between which
the vessel is required to be presented at the loading port the laydays will also be
recorded, as well also be recorded, as well as the cargo type and size that is to be
carried.
2. Ti me Charteri ng: Where vessel s are hi red f or a speci f i c peri od eg.
f or 12 mont hs (15 days more or l ess) t he responsi bi l i t i es of t he part i es
di f f er subst ant i al l y f rom t hose i nvol ved i n voyage Chart er i ng. A Ti me
chart erer assumes cont rol of t he operat i onal ( l et us cal l i t , t he

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commerci al ) appoi nt ment and payment of port agent s, purchase of
bunkers, et c. l eavi ng t he Shi powner responsi bl e f or t he management of
t he shi p, wi t h part i cul ar regard t o mai nt enance, crewi ng, i nsurance,
et c. The Shi powner i s rewarded by t he payment of regul ar amount s of
hi re money, normal l y pai d mont hl y or semi -mont hl y i n advance.
However, shoul d t he vessel f ai l t o perf orm properl y or s uf f er such
i nt errupt i ons t o t he smoot h perf ormance as mechani cal br eakdowns,
she may be consi der ed of f -hi re , duri ng whi ch per i od t he Owner wi l l not
be ent i t l ed t o remunerat i on.
Many Chart erers f i nd i t expedi ent t o empl oy vessel s on a
t i mechart er basi s f or si ngl e or round-t r i p voyages (ref er, f or exampl e, t o
t he Tweendeck f i xt ures report ed i n Appendi x 3: 1) and t hi s pr act i ce has
gi ven ri se t o t he t erm t ri p-chart eri ng . A t ri p-chart er i s si mi l ar t o
voyage chart eri ng wi t h regard bot h t o t he durat i on of t he vent ure and t o
t he f act t hat t he i nt ent i on of t he part i es i s t o empl oy t he vessel f or, say,
one or t wo voyages. But t here t he si mi l ar i t y ends, and t he rol es of
Chart erer and Owner are i dent i cal t o t hose assumed f or t i me chart ers of
l onger per i ods.
Di vi si on of Ti mecharter responsi bi l i ti es: -
Shi powner Charterer
Crewi ng Empl oyment
Repai rs Bunkeri ng
Mai nt enance & Spar es Port Expenses
Cl assi f i cat i on Canal Tool s
Sur veys St evedori ng
Lubr i cat i ng Oi l s Cargo Handl i ng
Fresh Wat er I nsurance of Cargo
I nsurance of Vessel I nsurance of bunkers
St ores & Provi si ons Heat i ng and Cooki ng

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Under Voyage Chart eri ng arrangement s, most of t he above
responsi bi l i t i es wi l l become t hose of t he Shi powner, wi t h t he except i on
t hat usual l y (but not al ways) t he Chart erer ret ai ns responsi bi l i t y f or
St evedori ng, Cargo Handl i ng and t he I nsurance of Cargo.
3. Bareboat Charteri ng: Somet i mes t ermed demi se Chart er i ng,
Bareboat Chart eri ng ari ses on t hose occasi ons where Shi powner s hi re
out t hei r vessel t o a Chart erer , who vi rt ual l y runs t he shi p as i f he were
t he Shi powner assumi ng bot h t he Ti me chart erer s responsi bi l i t i es (as
def i ned above) and most , i f not al l , of t he responsi bi l i t i es of t he
Shi powner. I n ret urn, t he Shi powner r ecei ves a l ower hi r e payment ,
commensurat e wi t h reduced responsi bi l i t i es and r i sks. St ri ct l y def i ned,
demi s Chart eri ng di f f ers f rom bareboat Chart eri ng i n t hat i t may be
agreed bet ween t he part i es t hat t he Shi powner provi des a mast er
and/ or of f i cers and/ or crew and, per haps, organi zes t he vessel s
i nsurance. Demi se and Bareboat i ng are i n real i t y f i nance t ool s,
desi gned t o enabl e I nvest ors t o purchase shi ps, l eavi ng t he operat i on
and management of t he shi ps t o Chart er ers wi t h more expert i se i n t hose
areas. The Chart er ers may, i n f act , be Shi powners wi t hout t he f i nanci al
resources t o f und such a purchase di rect l y.
4. Contract s of Affrei ghtment : These occur when a merchant
perhaps i n real i t y ei t her a Shi powner, a Chart erer or an Operat or
cont ract s t o carr y a gi ven quant i t y of cargo bet ween named port s on
agreed voyage Char t eri ng t erms over sever al voyages. The merchant
may t hereaf t er empl oy hi s own vessel (s) or chart er -i n out si de shi ps i n
order t o f ul f i l l cont ract ual obl i gat i ons. The advant age of such a cont ract
t o a Shi powner i s t hat secur i t y of empl oyment i s obt ai ned f or hi s
vessel (s) f or t he durat i on of t he Cont ract of Af f rei ght ment , especi al l y
val uabl e i f t he Shi ponwer consi ders t hat f rei ght rat es are about t o f al l .
For Operat ors i n a si mi l ar f rei ght market si t uat i on, t he advant age i s i n
t he prof i t s t hey hope t o real i ze by t aki ng advant age of bei ng abl e t o f i x -
i n t onnage at l ower f rei ght rat es t han t hose t hey wi l l recei ve f rom t he
Chart erer.

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But t he Chart erer s may al so be abl e t o obt ai n f i nanci al advant age
i n t he event t hat market f rei ght rat es ri se once t hey have commi t t ed
Owner or Operat or l ocked- i n t o t he Cont ract al ways assumi ng t hat
t he Owner/ Oper at or wi l l keep t hei r end of t he deal and perf orm. But
even i f t he market st ays i n neut ral or moves agai nst t he Chart erer by
f rei ght rat es f al l i ng, at t he ver y l east t he Chart erer has exchanged t he
unreal i bi l i t y of t he dai l y market pl ace f or f rei ght rat e st abi l i t y, t her eby
enabl i ng emphasi s t o be pl aced i n t he devel opment and market i ng of
t he commodi t i es i nvol ved.
5. Joi nt Ventures: Where t hose cont rol l i ng cargoes negot i at e and
come t o t erms under a j oi nt vent ure arr angement wi t h t hose cont rol l i ng
shi ps. Normal l y prof i t s and l osses wi l l be shared, not onl y perhaps on
t he seabor ne f rei ght el ement , but al so on product i on and/ or sal e cost s
of t he goods i nvol ved. These vent ures can be f ai rl y si mpl e and of a
short durat i on per haps f or a si ngl e, occasi onal cargo or t hey can be
of maj or i mport ance, i nvol vi ng t he mut ual expl oi t at i on of a Thi rd Worl d
nat i on s mi neral deposi t s, t he bui l di ng and admi ni st rat i on of port s,
market i ng of product s, as wel l as t he t rai ni ng of personnel f or each
sect i on of t he ent i re st ruct ure. An exampl e of t hi s degree of j oi nt
vent ure i s provi ded by t he l i ai son bet ween t he Nor wegi an Kl aveness
Group and t he Gui nearn Government i n t he bauxi t e product i on,
t ransport at i on and market i ng of t he j oi nt vent ure concern Gui nomar .
6Shi ppi ng Pool s: Where a group of Shi powner s band t oget her t o pool
t hei r t onnage and col l ect i vel y market t hei r combi ned f l eet . They may
wel l become i nvol ved i n ext ensi ve cont r act s of af f rei ght ment and j oi nt
vent ures wi t h out si de groups, and t hi s t ype of operat i on i s more l i kel y
where a speci al i zed commodi t y or t rade i s i nvol ved (eg reef ers and
Cool Carri ers St ockhol m or Lauri t zen Copenhagen, where numerous
Chart erers may become i nvol ved i n cont ract s wi t h t he pool ). Pool
i ncome i s col l ect ed t oget her and once pool runni ng cost s have been
deduct ed, resi dual i ncome i s di st ri but ed amongst members by means of
a wei ght i ng syst em by whi ch each ent ered vessel s i ndi vi dual

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charact er i st i cs ar e t aken i nt o account and measured agai nst a pool
model average , debi t s and credi t s bei ng appl i ed accordi ngl y. Frei ght
market ri sks are somewhat al l evi at ed by an i ndi vi dual Shi powner
perhaps wi t h l i t t l e or no previ ous shi ppi ng exper i ence gai ni ng
admi ssi on t o a wel l -r un pool . Furt hermor e, management over heads wi l l
be consi derabl y reduced by col l ect i vel y managed chart eri ng,
commerci al and f i nanci al operat i ons.
7. Parcel l i ng: General l y i n dr y-cargo shi ppi ng, t he smal l er t he quant i t y
of a commodi t y, t he more expensi ve i t i s t o shi p. Recogni si ng t hi s,
some Operat ors speci al i ze i n t ransport i ng smal l er par cel s of a
commodi t y by groupi ng t hem t oget her i n a vessel sai l i ng f rom one or
more port s i n a part i cul ar regi on t o one or more port s i n anot her area.
Thi s t rade i s pr omi nent , f or exampl e, i n commodi t i es export ed f rom
Aust ral i a t o dest i nat i ons i n t he Far East and i n t he At l ant i c Basi n.
Speci al i st Oper at or s i n t he ar ea cont ract t o move parcel s of
commodi t i es, t hereaf t er groupi ng t hese t oget her wi t h ot her parcel s i n
one bot t om , probabl y cont ract ed i n on a t ri p-t i mechar act er basi s.
(Even t oday you wi l l encount er t he ol d-f ashi oned expressi on bot t om as
an al t ernat i ve t o t he word shi p or vessel t radi t i on di es hard i n t he
shi ppi ng i ndust r y).
Consequent l y, i n addi t i on t o negot i at i ng t he hi ghest possi bl e
f rei ght rat e and best t erms f or each, i ndi vi dual parcel , t he operat ors
seek t he wi dest possi bl e dat e spread duri ng whi ch t o l oad t he parcel
and a wi de cargo quant i t y margi n, so as t o gi ve t hemsel ves maxi mum
f l exi bi l i t y t o f i t t he i ndi vi dual hol d compart ment s of what ever shi p t hey
cont ract , t hus easi ng t hei r chart eri ng rest ri ct i ons f or sui t abl e t onnage.
Havi ng i dent i f i ed t he most sui t abl e vessel , t he Operat ors t hen rel y on
t hei r shi ppi ng exper t i se t o t i mecharat er - i n t he shi p at a cost whi ch i s,
overal l , l ess t han t he f rei ght t hey expect t o earn f rom t he col l ect i on of
var i ous parcel s t he shi p wi l l carr y t he di f f erence, l ess t hei r
overheads, creat i ng t he prof i t el ement t hey seek.

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8Project Cargoes:A speci al i zed f rom of j oi nt vent ure/ cont ract of
af f rei ght ment i s t erms a proj ect cargo or a t urnkey proj ect , a t erm
commonpl ace i n t he heavy l i f e market, wher eby a mar i ne speci al i st
undert akes compl et e responsi bi l i t y f or t he seaborne movement of bot h
smal l and l arge pref abri cat ed st ruct ures, const ruct i onal equi pment , and
raw mat er i al s (eg cement ) t oget her wi t h al l t he par aphernal i a of maj or
proj ect s (eg. si t e hut s and machi ner y) t o t he proj ect s event ual l ocat i on.
An exampl e woul d be t he movement of mat eri al and equi pment
necessar y t o const r uct a de-sal i ni sat i on pl ant or cement f act or y i n a
devel opi ng nat i on.
Charteri ng Negoti ati ons Havi ng f ound a pot ent i al shi p t o carr y a
Pri nci pal s cargo, or what appears t o be a sui t abl e cargo f or a shi p, t he
Shi pbrokers concerned usual l y converse t o exchange addi t i onal f act s,
so as t o ensure t he busi ness i s mut ual l y i nt erest i ng and workabl e wi t h a
f ai r chance of success al l t hi s normal l y pri or t o di scussi on wi t h t he
Pri nci pal s. One or ot her Broker wi l l t hen seek and recei ve hi s
Pri nci pal s aut hor i t y t o make an of f er f or t he busi ness. Al t hough t hi s
may, at f i rst si ght , seem a si mpl e pr ocedur e, ser i ous pr obl ems can
ari se i f a basi c code of conduct and pract i ce i s not f ol l owed i n t he
t ender i ng and recei pt of such of f ers.
Fi rst , negot i at i ons need t o be conduct ed wi t h care and at t ent i on
t o det ai l , as t here must be compl et e agreement bet ween t he t wo
Pri nci pal s f or an enf orceabl e cont ract t o come i nt o bei ng. A day -book
or l og, or some ki nd of f i rm of f er check-l i st whi ch can be amended as
negot i at i ons pr oceed, shoul d be caref ul l y kept and re-conf i rmat ory t el ex
or f acsi mi l e messages summari zi ng t he f i nal agreement , shoul d al ways
be sent t o bot h part i es. Some Shi pbrokers, i n f act , f eel i t i s advi sabl e,
i n t he i nt erest s of cert ai nt y, t o conf i rm each of f er and count er -of f er i n
t hat manner. Shi ppi ng i s, af t er al l , an i nt ernat i onal busi ness and,
al t hough most chart eri ng negot i at i ons are conduct ed bet ween part i es
f l uent i n t he use of t he Engl i sh l anguage, honest errors do occur and
are best i dent i f i ed at an earl y st age.

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Verbal communi cat i on bot h duri ng negot i at i ons an out si de (eg.
passi ng on i nst ruct i ons t o t he Mast ers of shi ps) shoul d al ways be r e-
conf i rmed back t o t he i nst ruct i ng Pri nci pal . I ni t i al l y, t he el ement s of a
st andard openi ng of f er f or dry cargo voyage busi ness can be i t emi zed.
Essenti al detai l s of a Fi rm Offer for Voyage Busi ness.
1. Repl y by : (Pl ace and t i me l i mi t )
2. For account of : (name and perhaps beackground
Chart erers)
3. Name of Ship : (including description, eg flag,
year of build; class; pandi club; loa;
beam; deadweight; draft; cubic capacity
single/tween; number of holds and
hatches; gear)

4. Posi t i on and est i mat ed readl i ness of vessel :

5. Cargo Descr i pt i on & Quant i t y : (more or l ess %)

6. Load Port (s) / bert hs : (al ways af l oat / naabsa)

7. Di scharge Port (s) / bert hs: (al ways af l oat / naabsa)

8. Laydays/ Cancel l i ng :
9. Loadi ng Rat e : (per ww day/ shi nc/ shex)

10. Di schargi ng Rat e : (per ww dya/ shi nc/ shex)

11. Frei ght Rat e : (where, when and how pai d)

12. Demurrage Rat e : (hal f di spat ch)

13. Loadi ng/ Di schargi ng Cost s: (f i o?)

14. Address Commi ssi oner :

15. Brokerage :


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16. Chart erpart y :
17. Subj ect s : (det ai l s/ st em/ shi pper s
recei vers appr oval )

The procedure concerni ng of f ers and count er of f ers i n t i mechart eri ng i s
si mi l ar t o voyage est i mat i ng, except t hat such of f ers wi l l be t ai l ored f or
t he maj or el ement s of a t i mechart er,
Essenti al detai l s of a Fi rm Offer for Ti me Charteri ng:

1. Repl y by : (Pl ace and t i me l i mi t )

2. For account of : (name and perhaps
background of Chart erers)

3. Name of Shi p : (descri pt i on as f or voyage
Chart er i ng pl us speed and
consumpt i on)

4. Posi t i on and est i mat ed readi ness of vessel

5. Redel i ver y : (when/ wher e ready; aps; dop;
passi ng x )
6. Laydays/ Cancel l i ng :

7. Durat i on Tri p :

8. Del i ver y : (When/Where ready; dop;
passi ng x )

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9. Trading Area : (eg. worldwide; Atlantic Basin,
excluded countries)

10. Intended Trade : (eg. grain trading, trip with coal)

11. Cargo Excl usi ons :

12. Hire Rate : (daily; per deadweight tonne per
month) (? I ncl udi ng overt i me)
(where, when and how pai d)
13. Bal l ast Bonus : (Gross or net t )

14. Bunkers : (prices and quantities both ends)

15. Address Commi ssi on :

16. Brokerages :

17. Chart erpart y Form :

18. Subj ect s : (det ai l s)
(See I nt roduct i on t o Shi ppi ng f or gl ossary of abbrevi at i ons)

Offeri ng and Counteri ng The art of of f eri ng and count er -of f eri ng i s
governed bot h by l egal di ct at es as wel l as by a code of prof essi onal
conduct t he t wo not necessar i l y coi nci di ng. Legal l y, f or exampl e,
havi ng made an of f er, one i s f ree t o wi t hdraw i t any t i me pri or t o i t s
accept ance by t he ot her part y or bef ore any t i me l i mi t at i on on t he

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val i di t y of t he of f er expi res. Prof essi onal l y, however, one i s expect ed
t o mai nt ai n t he of f er, unal t ered, unt i l i t i s ei t her count ered or accept ed,
or unt i l i t s t i me l i mi t at i on has expi red. Agai n, l egal l y, whi l e negot i at i ons
cont i nue, one can al t er what has al ready been agreed . Prof essi onal l y,
t hi s i s f rowned upon, al t hough i t may be t hat such back -broki ng i s
accept abl e i f t erms subsequent l y reveal ed duri ng negot i at i ons
subst ant i al l y af f ect what has previ ousl y been set t l ed and whi ch one
part y ought t o have di scl osed t o t he ot her at an earl i er st age.

I nci dent al l y, you wi l l of t en hear t he expr essi on count er -of f er and
when act ual negat i ons are proceedi ng (especi al l y near t he cl osi ng
st ages) you wi l l even come across t he words Accept -except whi ch
obvi ousl y means t hat t he part y sayi ng i t i s prepared t o accept t he
ot her s of f er wi t h onl y a f ew (al t hough t hey coul d be vi t al ) al t erat i ons.
However, l et us be ver y cl ear on one poi nt , when one makes a count er
of f er one i s i n f act sayi ng I decl i ne your of f er and I now make you t he
f ol l owi ng f i rms of f er . Consequent l y unt i l bot h part i es have agreed on
al l and ever y det ai l , t here i s no cont ract and t he one l ast i n respect of
an of f er (or count er of f er) f rom t he ot her i s f ree, at any t i me, t o wal k
away f rom t he negot i at i ons. Just because t he part i es have st art ed t o
negot i at e t hi s i s no way bi nds t hem t o cont i nue, al t hough t o break of f
capri ci ousl y and wi t hout warni ng whi l st i t may be l egal l y permi ssi bl e,
woul d not be count ed as et hi cal l y good pract i ce. There i s an except i on
t o t he each and every det ai l havi ng t o be agreed i n t he USA. Thi s i s
deal t wi t h t owards t he end of t hi s l esson. Remember also there are two rules
of paramount importance in chartering negotiations, and which all studying this Course
must remember and apply throughout their chartering career. These are:
1. Al ways t o act wi t hi n your aut hori t y.
2. Do not of f er t he same shi p or cargo t o more t han one ot her
part y at t he same t i me.

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Warrant y of Aut hori t y A Shi pbr oker i s deemed t o enj oy t he f ul l
aut hor i t y of hi s Pri nci pal , and shoul d never act wi t hout t hat f ul l
aut hor i t y. I n f act , i t i s i ncumbent upon t he broker t o ensure t hat he has
f ul l aut hori t y f or al l of f ers and count er -of f ers made on t he Pri nci pal s
behal f . If f or some reason, a broker does not have aut hori t y f or an of f er
made, he may be l egal l y l i abl e i n an act i on brought by an i nj ured part y
recei vi ng and accept i ng an unaut hor i zed of f er. Such an act i on woul d
be on t he basi s of breach of warrant y of aut hori t y , ei t her wi t h or
wi t hout negl i gence . (The broker warrant s i . e. guarant ees t hat he or
she has t he aut hori t y t o make t he cont ract ).
I n t he case of breach wi t h negl i gence a br oker wi l l be l egal l y
l i abl e but , f or a breach wi t hout negl i gence t he broker i s ent i t l ed t o
l egal r ecourse agai nst t he part y passi ng hi m t he mi st aken or erroneous
of f er. I n pract i ce such an act i on may not succeed especi al l y i n such
an i nt ernat i onal market pl ace i nvol vi ng many di f f erent codes of l aw.
Even i f l egal l y successf ul under one or more codes, t he chances of f ul l
f i nanci al recompense may be l i mi t ed.
The di f f erence bet ween t hese br eaches can be i l l ust rat ed
di agrmmat i cal l y as f ol l ows: -
SHI POWNER__________ BROKER A
|
|
BROKER B________CHARTERER
Let us assume t hat t he SHI POWNER of f ers hi s shi p t o BROKER A
at US$ 25 per t onne BROKER A passes t he of f er correct l y t o BROKER
B, who mi st akenl y passes t he of f er t o t he CHARTERER at US$ 24 per

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t onne. The CHARTERER accept s. There i s no cont ract bet ween t he
SHI POWNER and t he CHARTERER, but BROKER B coul d be l i abl e f or
an act i on f or breach of warrant y wi t h negl i gence.
Al t ernat i vel y, l et us assume t hat t he SHI POWNER of f ers hi s shi p
t o BROKER A at US$ 25 per t onne, but on t hi s occasi on BROKER A
mi st akenl y passes on t he of f er t o BROKER B at US$ 24 per t onne, who
i n t urn passes t he of f er at US$ 24 t o t he CHARTERER. Agai n t he
CHARTERER accept s.
There i s st i l l no cont ract bet ween t he SHI POWNER and t he
CHARTERER, and BROKER B i s st i l l l i abl e f or breach of warrant y of
aut hor i t y, but t hi s t i me wi t hout negl i gence.
BROKER B may have t he r i ght t o proceed l egal l y agai nst
BROKER A f or passi ng an erroneous of f er, but may f act probl ems i n
gai ni ng appropr i at e r ecompense f or t he reasons det ai l ed above.
The t wo pr i nci pal s coul d i nsi st on t he cont ract bei ng f ul f i l l ed i n
whi ch case t he broker s l i abi l i t y woul d be f or t he di f f erence bet ween t he
aut hor i t y gi ven by t he Owner and t he accept ance gi ven by t he
Chrat erer.
The breach of war rant y coul d be on an i t em f ar l ess easi l y
apparent t han a dol l ar di f f erence i n t he rat e and may, t her ef ore, not
come t o l i ght unt i l t he shi p s voyage i s wel l advanced. The pri nci pl e,
however, remai ns t he same i n t hat t he broker f rom whom t he i nj ur ed
part y r ecei ved t he erroneous of f er i s responsi bl e f or t he damages t he
pri nci pal suf f ers.
Thi s may seem ver y harsh i n t he case of wi t hout negl i gence as
t he broker bei ng hel d responsi bl e wi l l have act ed at al l t i mes i n good
f ai t h and met i cul ousl y passed on such of f ers as he or she recei ved f rom

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t he errant broker. How ver y much more unf ai r, however, i t woul d be t o
t he i nj ur ed part y i f act i on agai nst t he nearest broker was not t he
accept ed l egal rout e part i cul ar l y as t he broker who i ni t i at ed t he breach
may be i n anot her count r y. The i nj ured pr i nci pal was compl et el y
i nnocent and what t he l aw i s real l y sayi ng i s t hat a broker has t o sat i sf y
hi msel f of t he bona f i des of t hose wi t h whom he or she i s deal i ng.
Prudent brokers usual l y i nsure t hemsel ves agai nst bot h sort s of
breach of warrant y of aut hori t y. Fort unat el y cases whi ch pr ove
i nt ract abl e t o an ami cabl e sol ut i on are rare but when t he wor st happens
i n can be spect acul ar. A f ew year s ago t here was a case be
spect acul ar. A f ew years ago t here was a case wher e t here was a
f raudst er i n t he chai n of brokers. He i s now l angui shi ng i n an
Ameri can pr i son but t he f unds were never recovered and t he London
brokers had t o make a t hree mi l l i on dol l ar cl ai m agai nst t hei r i nsurers.
Fi rm Offers The second rul e of paramount i mport ance i nvol ves f i rm
of f ers. I t must be remembered t hat a shi p cannot be under of f er f or t wo
or more cargoes at t he same t i me (ot her t han f or part cargoes) as, i f
bot h of f ers were accept ed, t he vessel coul d not carr y bot h at t he same
t i me. Si mi l ar l y, a Chart erer cannot of f er t he same cargo t o more t han
one shi p at t he same t i me. Even wher e a Br oker i s conf i dent t he same
t i me. Even where a Broker i s conf i dent hi s Pri nci pal s f i rm of f er wi l l not
be accept ed by t he ot her part y, onl y one of f er at a t i me can be made.
When broki ng pressure i s i nt ense, and when perhaps more t han
one opport uni t y pr esent s i t sel f , i t may become ver y di f f i cul t t o
negot i abl e so as t o sel ect t he best al t ernat i ve f or a Pri nci pal , because i t
may be t hat by concent rat i ng upon one order or upon one shi p, a
second, bet t er al t er nat i ve sl i ps away. But negot i at i ons cannot perf orm
by means of of f eri ng t o more t han one part y at a t i me. An ori gi nal of f er
must have expi red (or been wi t hdrawn) bef ore a second of f er i s made t o
t he al t ernat i ve candi dat e or, at l east , a count er - of f er recei ved and
decl ai ned. Nat ural l y a Br oker may have t o exerci se much ski l l and t act

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t o perf orm hi s t ask ef f ect i vel y i n such ci rcumst ances, and act i n t he
best i nt erest s of hi s Pri nci pal . I t i s, however, possi bl e t o negot i abl e a
shi p or a cargo on the basi s of bei ng subj ect open or subj ect unf i xed
. I n t hi s way t he ot her si de recei ves cl ear advi ce t hat al t ernat i ve
negot i at i ons ar e bei ng conduct ed, al t hough some Pri nci pal s wi l l be
unwi l l i ng t o negot i at e on t hi s basi s s, even i f f i xi ng t he al t ernat i ve
busi ness may t ake procedure, and t hey woul d be l ef t wi t h not hi ng t o
show f or t hei r t i me and t roubl e.
Nevert hel ess, wi t h cert ai n t rades f or exampl e, wi t h I ndi an
Gover nment cargoes on cert ai n occasi ons worki ng subj ect open i s
not unusual and where, say f our vessel s of f er f or what i s quot ed as one
cargo (but may, i n f act , t urn out t o go be several cargoes on t he same
posi t i on f rom t he same port ), t he most at t ract i ve of f er may be count ered
t o cl ean , t he next on t he basi s of subj ect open , t he t hi rd subj ect
unf i xed t wo and t he f ourt h subj ect unf i xed t hree . There may not be
f our separat e cargoes and as, perhaps, shi ps 1 and 2 drop out dur i ng
negot i at i ons, i t may be t hat successf ul negot i at i ons are concl uded onl y
wi t h shi ps 3 and 4, i n such a way j ust i f yi ng what at f i rst si ght appears t o
be a rat her t i resome procedure. I t i s, however, pr of essi onal l y unet hi cal
t o mi sl eadi ngl y count er t o anot her part y on t he basi s of bei ng subj ect
open when not , i n f act , under of f er t o anyone else.
I ndi cati ons Havi ng f ound a pot ent i al shi p t o carr y hi s Pr i nci pal s cargo
t he Broker i nvol ved wi l l normal l y gat her addi t i onal dat a i n an ef f ort t o
ensure t hat t he opport uni t y i s real l y of i nt erest and workabl e wi t h a
reasonabl e chance of success. I ndi cat i ons of f i xi ng l evel s may be
exchanged, and t hese may be made i n t he f orm of of f ers by i ncl udi ng
dat es when a shi p or a cargo may be avai l abl e, t he f rei ght rat e a
pri nci pal i s prepar ed t o pay or t o accept , t he cargo quant i t y, et c. There
may even be a count er i ndi cat i on or an i ndi cat i on sai d t o be f i rm .
However an indication is not an offer. It is not binding on the party
making it, and several indications may be made for various cargoes or ships

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at one and the same time. An indication is merely an advice of the
approximate terms and conditions upon which a Principal is prepared to
undertake business, or from which level that Principal is prepared to
negotiate. It must also be remembered that it is considered unethical to imply
that a ship or a cargo is held firm when it is not, in order t o secure an of f er
or a count er -of f er f rom a Pri nci pal and i ndi cat i ons shoul d not be abused
i n t hi s way any more t han shoul d act ual of f ers.
Sel f Assessment Questi ons
1. How many met hods of shi p empl oyment can you l i st ? (t he
Lesson had ei ght ).
2. For what i t ems woul d a t i me chart erer be responsi bl e whi ch
woul d not be t he responsi bi l i t y of a voyage chart erer?
3. What i s meant by br each of warrant y of aut hor i t y?
Charterparti es I t i s common pract i ce when advert i si ng a cargo t o
i ncl ude t he t ype of chart erpart y on whi ch an event ual f i xt ure wi l l be
based eg. Gencon CP and cert ai nl y t hi s shoul d be t he case when
i ni t i al l y of f eri ng or count er -of f eri ng. I t i s, however, unusual f or a
cont ract t o be based upon a bl ank copy of t he named chart er part y f orm,
i t bei ng normal pract i ce t o base negot i at i ons ei t her on a prof orma
cont ract prepared by Chart erers i ncl udi ng any speci al t erms and
condi t i ons rel evant t o t hei r busi ness or, more commonl y, f or
negot i at i ons t o be based upon t erms agreed f or a si mi l ar previ ous
f i xt ure, i f possi bl e upon a si gned worked copy of a previ ous f i xt ure s
chart erpart y.
I t i s usual l y onl y when negot i at i ons are under way and have
successf ul l y reached perhaps, t he mai n t erms st age, t hat t he
chart erpart y upon whi ch t he chart erer wi shes t o base t he f i xt ures i s

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made avai l abl e t o t he Shi powner and/ or Owner s Broker. Thi s may be
due t o t he rel at i ve geographi c l ocat i ons of t he part i es i nvol ved, or down
t o a nat ural rel uct ance t o go t o t he t roubl e of exchangi ng document s
when i t i s by no means cert ai n t hat t he negot i at i ons wi l l show si gns of
reachi ng a successf ul cl i max and so warrant an exchange. I t al so may
be consi dered poor negot i at i ng t act i cs t o appear t oo keen t o gi ve or t o
recei ve a prof orma governi ng chart erpart y at t oo ear l y a st age i n
negot i at i ons.
Somet i mes i t i s di f f i cul t t o l ay ones hands on appropri at e
document at i on f rom an earl i er f i xt ure, and most brokers wi l l have
exper i enced a f rant i c search at an advanced st age i n negot i at i ons f or a
copy of a sui t abl e base chart erpart y. Ver y occasi onal l y when l ocal
copi es of sui t abl e draf t s ar e unavai l abl e, t here i s no al t ernat i ve t o
basi ng, negot i at i ons upon a bl ank chart erpat y f orm, t oget her wi t h
t edi ousl y copi ed t el exed or f axed ent i re chart erpart y t erms, al t ernat i ons
and ri der cl auses.
Nevert hel ess, t he t i me i s now wi t h us when an essent i al part of
ever y Broker s and Pri nci pal s basi c of f i ce equi pment i s a f acsi mi l e
machi ne, by whi ch chart erpart y t erms can be speedi l y t ransmi t t ed
around t he worl d. Thi s has had a prof ound ef f ect on chart er i ng
negot i at i ons by maki ng t he exchange of chart erpart i es so much easi er
and t he f ax-machi ne can be sai d t o have brought about a f undament al
change i n chart eri ng t act i cs by whi ch part y purposel y i nt r oduces t he
basi c t erms and condi t i ons at an ear l y st age i n negot i at i ons, t hereby
el i mi nat i ng t he mai n t erms st age al t oget her.
Ti mi ng I t i s i mport ant t hat of f ers and count er -of f ers not onl y st at e t he
t i me by whi ch a repl y i s due, but al so t he pl ace where any r epl y must
be wi t hi n t hat t i me l i mi t at i on. Fai l ure t o f ol l ow t hi s procedure may
mean, f or exampl e, t hat a Pri nci pal repl i es i n good t i me i n, say London,
wi t h t he ot her pr i nci pal s based i n Si ngapore unaware of t he val i d
count er-of f er, and t hus negot i at i ng and perhaps f i xi ng el sewhere

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The t i me and pl ace f or repl y t o an of f er must be qui t e expl i ci t
eg. f or repl y i n Si ngapore l at est by 1500 hours l ocal t i me 23
r d
June.
Any cont er -of f er made i n London t o meet hi s deadl i ne wi l l have t o be i n
suf f i ci ent t i me reasonabl y t o permi t i t t o be rel ayed t o Si ngapore pr i or
t o 1500 hours l ocal t i me t hreat . Beware of imprecise expressions such as For
prompt reply or For immediate reply. The latter does not mean what it at first seems
to say. An offer made through broker(s) for immediate reply in fact means that time
has to be allowed for contact to be made with the principal. He has to reply straight
away but even using the most expedient means of communication available it may
take quite a while for the message to travel all the way there and back.
Subjects Chart erers of f ers and count er -of f ers are al most al ways made
wi t h subj ect s eg subj ect st em ; subj ect recei ver s approval or
what ever. Subj ect st em i s an expressi on about whi ch t here has of t en
been debat e as t o i t s ori gi n even i t s preci se meani ng. I t can best be
def i ned by exampl e. Supposi ng a chart erer has a cont ract t o buy a
mi l l i on t ons of coal over a per i od i n shi ps of around 50, 000 t onnes.
One cannot have such a quant i t y si t t i ng on a quay wai t i ng f or a shi p t o
be chart ered and so t he chart erer needs t o ver i f y t hat t he cargo can be
brought down t o t he port t o coi nci de wi t h each proposed shi p. If i t i s i n
order t he shi pper wi l l t el l t he chart er er t o l i f t t hat subj ect . The reason
f or subj ect recei ver s or shi ppers approval i s f or a si mi l ar purpose, t he
chart erers need t o check whet her a shi p i n t hat preci se posi t i on can be
accommodat ed. Sadl y bot h expressi ons are occasi onal l y abused. There
are cases wher e a f i xt ure i s made bef ore t he cargo i s even bought ,
respect i vel y sol d, but t hose abusi ng accept ed codes of et hi cs usual l y
get f ound out .
Under Engl i sh Law t here i s no f i xt ure unt i l al l subj ect have been
l i f t ed and, f rom an Owner s poi nt of vi ew, i t i s t heref ore desi rabl e t o
pl ace a t i me-l i mi t on t he removal (i e t he l i f t i ng of any subj ect s agreed
upon). Thi s wi l l have t he ef f ect of concent rat i ng t he ef f ort s of
Chart erers t o l i f t t he subj ect s i n good t i me or t o ri sk l osi ng t he shi p t o
ot her compet i ng busi ness. A t i me l i mi t on subj ect s al so provi des l ess

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opport uni t y f or an unscrupul ous Chart erer t o cont i nue unobt rusi vel y
seeki ng cheaper t onnage whi l st supposedl y cl ear i ng subj ect s. The t i me
avai l abl e t o a Chart erer t o cl ear subj ect s i s negot i abl e, l i ke chart erpart y
t erms, but shoul d obvi ousl y be suf f i ci ent , reasonabl e and pract i cabl e, or
el se a Chart erer may si mpl y need t o request ext ensi ons of t i me t o
compl y wi t h t hese requi rement s. Thi s avai l abl e t i me i s, however,
pot ent i al l y capabl e of mi suse by Chart erers, and Shi powner s are
normal l y ner vous about bei ng t oo l eni ent by al l owi ng t oo many subj ect s
f or i ndet ermi nat e peri ods, especi al l y when deal i ng wi t h previ ousl y
unknown and unt est ed Chart erers. On t he ot her hand, Chart erers may
qui t e l egi t i mat el y need a consi der abl e l engt h of t i me, especi al l y when
obt ai ni ng reconf i rmat i on of a cargo s avai l abi l i t y on cert ai n dat es i n a
remot e corner of t he worl d.
However, i t i s not al ways Chart erer s who put subj ect s on a
negot i at i on. Where Chart erers are unknown t o Owners, i t i s qui t e l i kel y
t hat Owners wi l l make any of f er subj ect t o approval of Chart erers by
Owners , or at l east t hey wi l l enqui r e of t hei r background and hi st or y,
probabl y seeki ng ref erences f rom Shi powners wi t h whom t he Chart erer
has conduct ed busi ness i n t he past . As a l ast resort , a Shi powner may
i nsi st on a bank guarant ee i n support of t he Chart erer, al t hough t hi s i s
expensi ve and f requent l y di f f i cul t t o arrange, and i s not usual .
Owners shoul d be part i cul ar l y war y wher e a Chart erer i s not named i n a
quot ed cargo, bei ng ref erred t o perhaps as FCC short for First Class
Charterer. A dfefinition of what is first class differs, of course, from person
to person. Frequently there is nothing sinister about a Charterer not declaring
his name behind an order, this being simply because the Charterer is hiding
his involvement from market competitors, or, perhaps, because a Broker is
quoting business passed to him from a Correspondence Broker in whomhe
has faith will not deal with unscrupulous Charterers of a bad reputation, and is
happy to re-quote the business prior to gaining a thorough knowledge of t he
background t o t he order. I t i s ext remel y unwi se, however, f or an Owner
t o agree t o f i x hi s vessel t o an un-named Chart erer. There have been

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cases where a broker has gi ven an assurance t hat hi s pr i nci pal s are
f i rst cl ass t o t he ot her si de and t he so-cal l ed pr i nci pal has def aul t ed.
There i s more t han et hi cs i nvol ved here because l egal act i on has
successf ul l y been pursued agai nst br okers who have gi ven such an
assurance reckl essl y.
One does not even have t o be one of t he brokers i nvol ved t o ri sk
act i on bei ng t aken i n t he case of negl i gent l y or reckl essl y gi ven advi ce.
You wi l l l earn about t he ci vi l wr ong of t ort i n your l aw l essons.
Suf f i ci ent t o say t hat someone aski ng f or your prof essi onal advi ce has
t he ri ght t o consi der you t o be qual i f i ed t o gi ve t hat advi ce, even i f t he
advi ce i s gi ven grat i s. Shoul d t he enqui rer act s on your advi ce and t he
deal goes wrong, you may be i n t roubl e. Unl ess t he subj ect Chart erer
(or owner) i s ver y wel l known t o you t o be f i rst cl ass , bet t er by f ar t o
report on your experi ence, f or exampl e we f i xed a shi p t o t hem on si x
mont hs t i me Chart erer and t hey pai d t he hi res bang on t i me ever y
mont h . I f t here i s no cl ear experi ence t o report , you shoul d suggest
t hat t he enqui rer makes hi s own enqui ri es t hrough more f ormal
channel s. Of course i f you have had a bad experi ence you shoul d pass
on t he f act s j ust t he same but i n t he same way as you shoul d not gi ve
an assurance of excel l ence i f you are not absol ut el y conf i dent , al ways
remember t hat t here are l aws of l i bel and sl ander, so be car ef ul not t o
make out t he Chart erer of anot her part y t oo badl y.

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Negoti ati ng Once a f i rm of f er has been made, al l subsequent count er -
of f ers shoul d be pref i xed i n one of f our ways: -
1. We decl i ne Oner s / Chart erer s of f er and of f er i nst ead . .
2. We accept owners / Chart erer s l ast , except .
3. We repeat our l ast .
4. We repeat our l ast , except
Wi t h part i es engaged i n seri ous negot i at i on, di f f erences wi l l
gradual l y be el i mi nat ed and reconci l ed unt i l ei t her negot i at i ons end i n
f ai l ure wi t h nei t her, si de wi l l i ng t o concede on one or more i ssues or
unt i l agreement i s r eached, al bei t wi t h var i ous subj ect s st i l l be l i f t ed.
Tradi t i onal l y, t hi s may be t ermed havi ng reached agreement on mai n
t erms or havi ng reached t he subj ect det ai l s st age, l eavi ng t he
chart erpart y st i l l t o be negot i at ed bet ween t he part i es. Et hi cal l y t here
i s no reason why t here shoul d now be a subsequent ser i ous i mpedi ment
t o reachi ng a f i rm f i xt ure.
I t may happen, however, t hat t he Chart erpart y cont ai ns one or
more t erms whi ch subst ant i al l y af f ect t he previ ousl y agreed mai n
el ement s of t he negot i at i on. The Seri ousness of t hese det ai l s may not
be real i zed unt i l negot i at i on on chart erpart y t erms i s under way but i t i s
i ncumbent upon Chart erer s Brokers t o ensur e, i f possi bl e, t hat t he
ori gi nal negot i at i ons l eadi ng t o agreement on mai n t erms cont ai n al l
mai n t erms. That woul d hel p t o avoi d di sagreement over t erms whi ch
subst ant i al l y af f ect i t ems al ready agreed e. g. t he f rei ght rat e
. . as ment i oned ear l i er, t he t i me i s now wi t h us when an
essent i al part of every Broker s and Pri nci pal s basi c of f i ce equi pment
i s a f acsi mi l e machi ne, by whi ch chart erpart y t erms can be speedi l y
t ransmi t t ed around t he worl d. Thi s has had a prof ound ef f ect on
chart eri ng negot i at i ons by maki ng t he exchange of chart er part i es so
much easi er and t he f ax-machi ne can be sai d t o have brought about a

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f undament al change i n chart eri ng t act i cs by whi ch a part y purposel y
i nt roduces or request s t he basi c t erms and condi t i ons i n ot her words
t he chart erpart y at an ear l y st age i n negot i at i ons, t her eby el i mi nat i ng
t he mai n t erms st age al t oget her.
The t radi t i onal met hod of negot i at i ng i s st i l l wi despread, however,
si nce, i f agreement cannot be reached on maj or but si mpl e i ssues such
as cargo si ze, vessel s / cargo s avai l abl e dat es, f rei ght rat e, et c. , t here
i s l i t t l e poi nt i n deal i ng wi t h perhaps t edi ous and rel at i vel y mi nor
chart erpart y cl auses. Under English Law, however, there is no binding contract at
the main terms stage of neither negotiations, nor will there be any such agreement
until each and every detail of the contract has been agreed and all subjects lifted.
Legally, therefore, there is nothing to stop one or other of the parties renegotiating a
feature of the agreement reached eg the freight rate although, professionally, and
unless justified by the discovery of a previously hidden major item, this would be
considered highly unethical.
As ment i oned ear l i er, under present Ameri can Law, however,
t here may be a cont ract once mai n t erms have been negot i at ed and
agreed, unl ess bot h si des deci de t o wi t hdraw f rom t he negot i at i ons;
uni l at er al wi t hdrawal i s not suf f i ci ent . Agreement reached on what may
be i nt erpret ed as t he essent i al part s of a cont ract may wel l resul t i n a
l egal l y bi ndi ng f i xt ur e, even t hough a mass of rel at i vel y mi nor det ai l s
have not even been di scussed, l et al one resol ved, and even t hough
numerous subj ect s r emai n t o be l i f t ed.
The sol ut i on t o t hi s pot ent i al probl em woul d seem t o be t o el evat e
t he subj ect det ai l s st age f rom a l egal l y i nsi gni f i cant process t o an
essent i al part of a cont ract . Negot i at i ng on a chart erpart y at an earl y
st age so t her e i s no di st i nct i on bet ween t he mai n t erms and
chart erpart y det ai l s i s one met hod, eased part i cul ar l y by t he
wi despr ead use of f acsi mi l e machi nes. However, i f part i es t o a
negot i at i on under Ameri can Law pref er not t o be commi t t ed t o what may
l egal l y be i nt erpr et ed as f i xt ure bef ore al l det ai l s, maj or and mi nor,

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have been agreed, and al l subj ect s l i f t ed, t hey shoul d make t hi s
pat ent l y cl ear by t he use of appropr i at e wordi ng. An exampl e of such
wordi ng woul d be subj ect t o Owner s / Chart erer s f ul l appr oval of t he
prof orma chart erpart y dat ed . wi t h l ogi cal amendment s t heret o.
I t may be t empt i ng i n t he heat of negot i at i ons t o use a short , easy
phrase l i ke subj ect det ai l s but , wi t h Ameri can Law as i t present l y
st ands, t hi s i s not suf f i ci ent , and i t i s saf er t o get i nt o t he habi t of bei ng
more expl i ci t .
Summary You have now covered t he basi cs of f rei ght market s, t radi ng
and negot i at i ons. There i s much t o l earn of a pr act i cal nat ur e, but what
you have read i n t hi s Lesson i s i nt ended t o suppl ement and support
your current or event ual worki ng act i vi t i es. I n t he next Lesson we wi l l
t urn our at t ent i on t o i nvest i gat i ng t he worl d of dr y-cargo char t erpar t i es.
I n t he meant i me, you shoul d by now have read up t o Chapt er Four of
CARGOES. If not t hen you shoul d read some bef ore st art i ng Lesson
Four.
Test Questi on
Usi ng t he dat a provi ded i n Appendi x 3: 1, provi de a f rei ght market report
of about 200 words. Choose whet her you are addressing your report to a
Shipowner or to a Charterer. The Shipowner has two capasize vessles
open prompt one in Osaka and the other in Rotterdam and he prefers the
iron ore trade.
The Chart erer has t wo ear l y cargoes of i ron or e t o shi p, bot h of about
100/ 150, 000 t onnes, one f rom Dampi er t o Rot t erdam and t he ot her f rom
Tubarao t o Rot t erdam.
Descr i be t he met hods commonl y used t o di scharge bul k grai n.

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ALBRAI TH S LTD SHACKLETON H
4 BATTLE BRI DGE,
LONDON ST,
TELEPHONE: 071-371
TELEX : 884621/ 4C
FAX : 071-521

Dry Cargo Market Report
for week endi ng noon 8
t h
June, 1990.

PANAMAX The f rei ght market has been di f f i cul t t o work t hi s week wi t h
l evel s st i l l rel at i vel y l ow and l i t t l e opt i mi sm f or a near -f ut ure recover y.
The prospect s f or an earl y revi val ar e sl i m as t he summer season i s
t echni cal l y here now. US Gul f t o Japan cargoes are bei ng di scount ed
f or Jul y shi pment by upt o $2. 00 per t on over t he June posi t i ons. I n t he
t i mechart er sect or t r ans-At l ant i c round voyages have been r eport ed but
t he rat es are as was expect ed. Amongst t hem f eat ure t o CRUSADER
VENTURE t aken by Paci f i c Mar i ne f or a t ri p wi t h coal f rom USNH t o t he
Medi t erranearn at $8, 800 per day pl us a bal l ast bonus of $140, 000. A
Maersk vessel was t aken by Dani sh Char t erers f or a Sout h Ameri can
round voyage at a si mi l ar l evel of $8, 500 dai l y. The STAMP Cont i nent
t o Egypt wi t h a f ai r l y short dur at i on. I t was not al l bad news t hough,
wi t h t he ANANGEL EXPRESS bei ng f i xed t o Japan f rom t he Cont i nent
vi a Brazi l at $12, 250 dai l y. The THALI A report ed i n more det ai l bel ow,
was t aken at a l evel about $250 per day l ess t han t he Ci noussi an
St rengt h a week ago f or a tri p t o Aquaba vi a US Gul f .

On t he voyage market more act i vi t y has t aken pl ace i n general t erms
wi t h f rei ght s no bet t er on any of t he usual rout es. Coal f rom Sout h
Af t ri ca was f i xed t o Sapi n at $9. 30 at t he back end of l ast week and
now wi t h t he current t i mechart er l evel s obt ai nabl e, t hi s rat e woul d be
l ess t han $9. 00 per t on. I n t he At l ant i c $7. 25 was agreed by Be l gi an
Chart erers f rom USNH t o Ant werp f or 62, 000 t ons of coal . The numbers

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of f i xt ures concl uded t hi s week are sympt omat i c of t he l arge vol ume of
t onnage on t he market .
Capesi ze I nspi t e of numerous f i xt ures bei ng report ed t hi s week, rat e
l evel s have decl i ned, t hanks t o a surpl us of earl y t onnage. The out l ook
t he short t erm appears t o be more of t he same al t hough we are
i nf ormed t hat t he Japanese st eel mi l l s shoul d st art t o bui l d up st ocks
agai n duri ng Jul y/ August , whi ch presumabl y shoul d l ead t o a f i rmi ng of
t he f rei ght market . Transat l ant i c t i me chart er l evel s now at about 50
pot of l evel s reached ear l i er t hi s year . Peri od enqui r y i s gat heri ng
moment um - - a natural consequence of t he current l ow spot market - -
al t hough we do not so f ar see much evi dence of owners grabbi ng t he
busi ness at rat es chart erers are prepared t o pay. There i s i ncreasi ng
ner vousness amongst chart erers about l onger t erm per i od f i xi ng i n vi ew
of t he subst ant i al .
Handy Si ze Lack of f resh grai n and T/ C operat or enqui r y has kept t he
At l ant i c market f ai rl y cool t hi s week t hus not hi ng i nspi r i ng has
happened t o rat e l evel s. For del i ver y Passero / Cont range Lakes
chart erers secured t onnage di sappoi nt i ng f or Owners, whereas grai n
f i xt ures ex Lakes show i mpr ovement , i ndi cat i ng t he t i ght posi t i on bei ng
exper i enced by ar ea but general l y operat ors are qui et as t hey
cont empl at e t he exi st i ng st ri ke si t uat i on at cert ai n port s and t he
possi bi l i t y of a general st ri ke commenci ng 12
t h
June.
PANAMAX VOYAGE FI XTURES
CSK FORTUNE 60000/ 10 PCT COAL #13. 00 NEWCASTLE NSW/ 1 S.
SPAI N 20, 000/ 12, 000 OR 15, 000 20-30 JUN ( MOSK)
CHI NA GLORY 60000/ 10 PCT COAL $9. 30 R BAY / TARRAGONA
SCALE / 12, 000 SATPM SHEX 20-30 JUN (CARBOEX).


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JADRAN 70000/ COAL $8. 00 RI CHARDS BAY/ R DAM SCALE LOAD /
25000 SC 25 JUN 10 JUL ( COBELFRET)

JARDAN 62000/ COAL $7. 25 BALT+NORFLK/ ANTWERP 3. 5 DAYS
SHI NC 10- 20 JUN (COBELFRET)

ALKYONI S 51000/ 5 PCT DAP $24. 75 USGULF/ CHI NA 32 DAYS SHI NC
FI O 20-30 JUN (SI NOCHART)

SEA VI CTORY 75000/ 10 PCT I RON ORE $7. 50 TUBARAO / GI JON 7
DAYS SHI NC 25 JUN-10 JUL (ENSI DESA)

ARARAT 62000/ BARLEY $15. 25. LAW / JEDDAH 5 DAYS / 3. 000 FHEX
106-2 JU (DREYFUS)

HANJI N CASABLANCA 5000/ 10 PCT HSS $11. 25 NOPAC/ S. KOREA
10. 000/ 7. 25 SHEX FI O 20-30 JUN ( PANOCEAN)

UNI TED ACE 53500/ HSS $21. 50 USGULF/ JAPAN 1 COMBO 11 DAYS
SHEX FI 15 25 JUN ( MOSK)

ARKAS 52000/ HSS $21. 50 USGULF/ JAPAN 1 COMBO 11 DAYS SHEX
20-29 JUN (EXMAR)

NI KI TAS ROUSSOS 54000/ 5 PCT HSS $22. 50 USGULF / TAIWAN 5
DAYS / 4. 00 SHEX 10-18 JUN (CONTI )

ATLANTI 52000/ HSS $19. 75 USGULF/ JAPAN 1 COMBO 11 DAYS SHEX
01-31 JUL (NI PPO)

LAURA PANDO 72500/ GRAI N $11. 00 MI SS R. / ROTTERDAM 12 DAYS
SHEX 14- 28 JUN (ADM)

PANAMAX T/ C/ FI XTURES


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MI STRAL 79760 DWT ABT 13K ON 34 LI B 74 DELY CONT 25 MAY-05
JUN TRI P VI A USGULF OR ECSA REDELY SKAW/ PASSERO $10000
DAI LY (SOVFRACHT)

WORLD SPEAR 69001 DWT ABT BR 83 DELY CONT 10-20 JUN TRIP VIA
USGULF REDELY JAPAN $11500 DAILY (NAVIX)
ROLLON 67826 DWT ABT 13K ON 32. 5 GRK 75 DELY CONT 26MAV
03 JUN TRI P VI A SAMERI CA REDELY CONT $8500 DAI LY ( ARMADA)

THALI A 65161 DWT ABT 14K ON 37. 5K L/ 32 B PAN 82 DELY USGULF
(15-20 JUN REDELY AQABA $10000 DAI LY + $200000 BB
(TRADI GRAI N)

MAERSK BEVERLEE 63979 DWT ABT 12K L/ 13K B 30/ 31, PHI L 75
DELY PASSERO 02-07 JUN TRI P VI A SAMERI CA REDELY
SKAW/ PASSERRO $8500 DAI LY (ARMADA)

ASCONA 63916 DWT ABT 13K ON 30 DELY NOPAC 15-20 JUN REDELY
TAIWAN $8500 DAILY + $150000 BB (HANJIN)

ANNI TSA L 62871 DWT ABT 14 K ON 37L/ 33B GRK 83 DELY GI B 04-
09 JUN VI A ORI NOCO + USG REDELY SKAW / PASSERO $9750 DAI LY
(NAVI OS)

STAMOS 62589 DWT ABT 13K ON 28 TS GRK 85 DELY DOP R DAM
05-10 JUN TRI P VI A EGYPT REDELY PASSERO $10600 DAI LY (NNC)

CRUSADER VENTURE 61883 DWT ABT 14K ON 38/ 39 (380 CST) BRI T
82 DE USNH 15-20 JUN REDELY ANNABA $88000 DAI LY + $ 140000
BB (PACMARI NE)
ANI TA VENTURE 61776 DWT ABT 14K ON 38/ 39 (3500) + 1. 1+1. 3
DO/ FO BEE DELY RETRO SKAW 25 MAY TRI P VI A SAMERI CA
REDDELY SKAW/ PASSERO $8900 DAI LY (SOVFRACHT)

ANANGEL EXPRESS 61537 DWT ABT 13. 5K ON 32L/ 36B (320 CST)

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LI B 82 R DAM 05-10 JUN TRI P VI A BRAZI L REDELY FEAST $12250
DAI LY (GRANT)

CAPSI ZE FI XTURES

SALPURI 100000 10 PCT I RON ORE NOUADHI BOU/ ROTTERDAM 6 SC
20/ 30 JUL 3. 35 DLPS (NEDLLOYD)

DI MI TRI CS 120000 10 PCT I RON ORE PT UBU, FOS 5 SC 15/ 30 JUNE
6. 35 D (CETRAGPA)

LOCUST 150000 10 PCT IRON ORE TUBARAO/ROTTERDAM 25/30 JUNE
6SC 5.95 DLRS (MOSK)

SI DERMAR TONNAGE 10000 10 PCT I RON ORE
NOUADHI BOU/ DUNKI RK 15/ 30 6SC 4. 30 DLRS ( MOSTK)

BELCARGO 90000 10 PCT COAL HAMPTON ROADS/HANSAPORT 2028 JUNE
3SC/2000 SC 6.25 DLRS KRUPP)
EUROPA 10000 10 PCT COAL HAMPTON ROADS/ ROTTERDAM 25
JUNE/ 5JULLY $35000 SC BENDS ( PANBULK)

TI MECHARTER

GALLANT DRAGON 121185 13. 258/ 12. 50 OFF 43 DEL CONT VI A
BOLI VAR RULE CONVEY 100000 LPS (3%MAP)

HANDYSI ZE FI XTURES

I RO 30817 13K ON 30 2. 5 DO DEL N. FRANCE 6/ 10 JUNE TA RV
REDFL GI B/ SKAW &7500 (DREYFUS)

OLYMPIC MIRACLE 29670 13K JON 17 + 1.5 DO DEL PSSG GIB PPT 2/4
MO TC REDEL SKAW/PASSERIO $ 7150 (CNAFOR)

SAC MALAGA 30499 13K ON 29 + 2 GAS DEL TARANTO PPT LAKS
RV $630 (I TALMARE)

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NEW MARQUESA 33207 ON 22 + 0. 2 DO DEL BOULOGNE PFT TRI P
REJN &9600 (UNI TRAMP)

SUMMI T VENTURE 34456 12K ON 27 + 2 DO DEL PSSG PASSERRO
17/ 20 JUN TRI P VI A E. MED REDEL FEAST $10100 (I NTRAF)
WORLD ARETUS 37472 12. 5K ON 25 + 2 GAS DEL PSSG GI B PPT
TRI P DI A BRAZI L REDEL FEAST 10250 (PACMARI NE)

STADI ON 33527 13K ON 27 + 2 DO DEL VI TORI A 10/ 15 JUNE TRI P
FEAST &10000 - $110000BB (NETUBULK)

G A L B R A I T H S L I M I T E D

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CHAPTER- 4

CHARTERI NG CONTRACTS


I n t hi s l esson we wi l l exami ne t he document s whi ch cont rol t he
whol e chart eri ng market and f orm t he cornerst one of shi pbr oki ng l i f e.
So much of t he pract i cal l i f e of a broker revol ves around t he vari ous
requi rement s of chart er part i es t hat i t i s absol ut el y essent i al you
underst and t hem as f ul l y as possi bl e. No one expect s ever y broker t o
underst and ever y chart er part y i n det ai l , but brokers shoul d be aware of
t he basi c st ruct ure of voyage and t i me chart er f orms, and shoul d al so
be capabl e of nomi nat i ng a sui t abl e chart er part y f or any part i cul ar
commodi t y or t rade. Whilst in shipping almost anything is possible (provided it is
legal) there are usually specific charterparties which relate to particular trades, and
shipbroker should recommend and use these if possible, since most will have stood
the test of time both in practical everyday usage and, as important, in legal dispute. To
help you in this aim, Appendix 4.1 lists a selection of important dry-cargo
charterparties under the headings of various commodities.
As you can see f rom t hi s l i st , some dr y-cargo chart erpart i es i n
use t oday are around ei ght y years ol d and, al t hough many duri ng t hat
peri od have grown unsui t abl e f or t he t rade f or whi ch t hey were
ori gi nal l y i nt ended and/ or t he t rade i t sel f has become obsol et e, l eadi ng
t o t he di scont i nuat i on of use of t hose chart erpart i es, some of t hese
ol der f orms have st i l l a val i d rol e t o pl ay and have been updat ed when
and where necessary t o keep st ep wi t h. Even so, new dry-cargo
chart erpart y f orms are publ i shed f rom t i me t o t i me and ol der ones
revi sed and updat ed, and act i ve i n t hi s f i el d are t wo bodi es t hat you wi l l
encount er i n part i cul ar The Bal t i c I nt ernat i onal Mar i t i me Counci l
(BI MCO), and The Associ at i on of Shi pbr okers and Agent s (ASBA).
BI MCO, based i n Copenhagen, has an i nt ernat i onal membershi p and
ori gi nat ed as a shi powners l obby group bef ore expandi ng i t s broker
and chart er membershi p i n recent years. ASBA i s an Ameri can

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organi zat i on, based i n New York and, as i t s name i mpl i es, i s an
associ at i on of shi pbr okers and agent s.
As wi l l be seen i n Appendi x 4 : 1, ot her bodi es are al so act i ve i n
draf t i ng chart erpart i es, some i nt er nat i onal (eg FONASBA) some
nat i onal (eg UK Chamber of Shi ppi ng now part of t he General Counci l
of Bri t i sh Shi ppi ng) and i n some t rades, t he chart er ers t hemsel ves have
draf t ed t he chart erpart i es f or t hei r own commodi t i es (eg S. Af ri can
Aut hract i t e Producer s Assn. ). There are any number of chart erpart i es
we mi ght have sel ect ed t o anal yse t horoughl y and t o i l l ust rat e t o
readers t he basi c st ruct ure of t hese document s, but many of t he ol der
exi st i ng f orms are l i t t l e more t han a ver y bri ef pri nt ed f ace t o whi ch are
at t ached r i der cl auses rel evant t o t he part i cul ar t rade and var yi ng i n
cont ent wi t h t he i ndi vi dual requi rement s of t he part i es negot i at i ng a
cont ract . Accordi ngl y, we have sel ect ed t wo f orms whi ch cont ai n an
i l l ust rat i ve st ruct ure i n t hei r pr i nt ed versi ons, and whi ch are t hus of
val ue f or our purposes i n t hi s Course. The t wo sel ect ed are t he
MULTI FORM of FONASBA (The Federat i on of Nat i onal Associ at i ons of
Shi pbrokers and Agent s), (Appendi x 4 : 2), as our voyage chart erpart y,
and t he ASBATI ME of ASBA (Appendi x 4 : 4) f or our t i mechart er,
support ed by t he AMWELESH (Appendi x 4 : 3) and t he New York
Produce (Appendi x 4 : 5), bot h of ASBA. More about t hese l at er. I n t he
meant i me we wi l l st art wi t h exami ni ng chart erpart i es i n general t erms.
A proper l y si gned and aut hent i cat ed char t erpart y st at es i n wr i t t en
f orm t he cont ract bet ween t he shi powner (or t he di sponent owner or
operat or of a shi p) and chart erer . I t shoul d f act ual l y record t hei r
negot i at ed agreement and t he t erms and condi t i ons reached i n t hat
agreement . A chart erpart y i s not t he cont ract i t sel f , whi ch wi l l have
been reached (as we have seen i n Lesson Three) by word- of -mout h or
t el ex exchanges, or what ever. Thus i t can act i ndependent l y t o t he
physi cal movement s of t he vessel and i n some cases, especi al l y i n t he
f ast -movi ng wor l d of short -sea t radi ng where a vessel may compl et e t wo
or even t hree car goes i n one week, f requent l y t he draf t i ng of

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chart erpart i es i s some way behi nd physi cal event s, and a shi p may
have l oaded, carr i ed t he cargo and di scharged, f rei ght may have been
pad and l ayt i me cal cul at ed and set t l ed even bef ore a har d-pressed
broker has set t o work t o draw up t he cont ract ual agreement t he
chart erpart y. On t he ot her hand, t he avai l abi l i t y of t he chart erpart y may
be an essent i al f or t radi ng pur poses, t he rel ease of l et t ers of credi t ,
et c. and t hus i t shoul d be t he ai m of every broker, no mat t er how har d
pressed, t o prepar e a chart erpart y as soon as possi bl e f ol l owi ng t he
successf ul concl usi on of a negot i at i on. Just occasi onal l y, t he
preparat i on of t he chart erpart y r eveal s an error i n t he negot i at i ng
process, and t he sooner such errors are brought out i nt o t he open and
reconci l ed t he bet t er f or al l concer ned.
Offi ci al Charterparti es Cert ai n chart erpart i es ar e of f i ci al , i n t hat
t hey have been i nspect ed and passed by an aut hor i t at i ve body eg a
chamber of shi ppi ng whi l st ot hers have not been so t reat ed of may
have been f ound l acki ng i n some respect . Cert ai n organi zat i ons t ake i t
upon t hemsel ves on behal f of t hei r members and, i n t he case of BI MCO,
as a ser vi ce t o worl d shi ppi ng, t o i nspect and, where possi bl e, t o
recommend or approve var i ous f orms, goi ng so f ar as t o t hemsel ves
draf t and i ssue some document s. The expl anat i on of cert ai n vari ed
words of recommendat i on at t he head of some chart erpart i es can be
bri ef l y descri bed as f ol l ows
Agreed or Trade: The chart erpart y wordi ng has been agreed bet ween
a body such a BI MCO (broadl y represent i ng owners i nt er est s) and a
chart erers organi zat i on f or a part i cul ar t rade. The pri nt ed condi t i ons of
such a chart erpart y may not be al t ered i n any way wi t hout t he express
agreement of al l t he organi zat i ons drawi ng up t he document , whi ch i s
compul sor y f or al l engaged i n t he part i cul ar t rade. An exampl e i s t he
SOVI ET COAL CHARTER, agreed bet ween t he Document ar y Counci l of
BI MCO, t he Scandi navi an Coal Chart erers Federat i on, and t he USSR
Chamber of Commerce.

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Adopted: Where a body (eg a chamber of shi ppi ng) adopt s a
chart erpart y t hat has been agreed bet ween say, a chart erers
organi zat i on and BI MCO. An exampl e i s t he POLCOALVOY chart erpart y,
adopt ed by t he general Counci l of Br i t i sh Shi ppi ng. Such a body can
al so adopt a chart erpart y t hat has not been agreed , shoul d i t appr ove
of t hat document s cont ent s, al t hough i n t he l at t er cost t he cl auses can
be al t ered by mut ual consent by cont ract i ng part i es i n t he t rade.
Recommended: Where chart erpart y t ext i s l i abl e t o al t erat i ons i n
negot i at i ons, al t hough t he wordi ng of the pri nt ed t ext meet s wi t h t he
approval of t he i nspect i ng body, t he f orm can be used as a
recommended document . An exampl e i s t he GENCON chart er part y.
Approved: Si mpl y an expressi on descr i bi ng r ecommended , adopt ed ,
or agreed chart er part i es.
I ssued: A chart er part y f or whi ch a group such as BI MCO i s r esponsi bl e
f or draf t i ng and maki ng avai l abl e f or use.
Charterpart y Li brary For st udent s f aced wi t h t he awe- i nspi r i ng t ask of
st udyi ng popul ar dry-cargo chart erpart y f orms, i t wi l l be f ound
product i ve f or t he purposes of bot h exami nat i ons and pract i cal t radi ng,
t o exami ne such bl ank pri nt ed document s as one can obt ai n, al ongsi de
f i nal , negot i at ed and dul y amended chart erpart i es. I n t hi s way
commonpl ace al t erat i on, del et i ons and addi t i ons t o pri nt ed wordi ng can
be obser ved and l essons l earned f or f ut ure negot i at i ons. Addi t i onal l y,
f or st udent s and f or pract i ci ng brokers al i ke, t he mai nt ai ni ng of a
comprehensi ve f i l e of sampl e chart er part i es bot h bl an and worked
exampl es i s an excel l ent habi t and one whi ch wi l l r epay t he t i me and
t roubl e i nvol ved many t i mes over dur i ng a career i n t he i ndust r y. I n
l arge cent ers such as London and New York, bl ank copi es of most
chart erpart y f orms can be obt ai ned f rom speci al i st st at i oner s suppl yi ng
mari t i me document s, f ai l i ng whi ch l ocal shi pbrokers or t he organi zat i on
publ i shi ng t he f orm may be abl e t o provi de gui dance on i t s avai l a bi l i t y

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i n part i cul ar ar eas.
Charterpart y Wordi ng The wordi ng of most chart erpart i es (ot her t han
i n agreed document s) i s used onl y as a basi s f or negot i at i on and,
where necessar y, t he pri nt ed t ext i s al t ered, del et ed or added t o, so as
t o ref l ect t he speci f i c agreement reached. To t he amended mai n f orm
wi l l usual l y be added vari ous t yped addi t i onal cl auses, known al so as
ri ders, or as si de cl auses, and pecul i ar t o t he part i cul ar busi ness. On
some occasi ons, an addendum or a si de l et t er, or t wo, wi l l be added t o
t he chart erpart y, t o record a part i cul ar cl ause of cl auses t hat one or
ot her of t he cont ract i ng part i es wi sh kept conf i dent i al f rom cert ai n
ot hers who mi ght subsequent l y ref er t o t he chart erpart y. For exampl e,
t he rat e of f rei ght or hi re may be t reat ed i n t he conf i dent i al manner,
wi t h t he mai n char t erpart y cl ause ref erri ng onl y t o a rat e/ hi re as
agreed , t he act ual f i gure deci ded upon appeari ng onl y i n a det achabl e
addendum or si de l et t er t o t he chart er part y. Thus port agent s, et c.
woul d be unaware of t he rat e of f rei ght / hi re agreed upon, si nce t hey
woul d need onl y t he mai n chart er part y and ri der cl auses t o perf orm
t hei r f unct i ons sat i sf act ori l y.
Occassi onal l y, addi t i onal agreement (s) wi l l need t o be made
subsequent t o t he f i xt ure and t he drawi ng-up of t he chart er part y, and
t hese subsequent agreement s are normal l y recorded i n addi t i onal
addenda. It is good practice to refer to the number of any additional clauses at the
foot of the main charterparty form, with such wording, for example, as additional
clauses 29 to 55 inclusive, as attached, are deemed part of and are incorporated into
this charterparty. Such is not necessarily the case with addenda, however, and it may
not be apparent to those reading the main charterparty and additional clauses that
other agreement has been reached. If addenda are drawn up, though, they should for
good orders sake be accorded a reference number in numerical sequence i.e.
Addendum No.1, 2, etc.
A si de l et t er i s an al t ernat i ve t o an addendum f or recordi ng
agreement s t hat bot h part i es consi der t oo sensi t i ve f or general perusal

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t he guarant eei ng by one company of a si st er company s perf ormance of
t he cont ract . The general market f eel i ng, however, i s t hat a si de l et t er
i s not qui t e so cl ose t o t he heart of a cont ract . The general market
f eel i ng, however, i s t hat a si de l et t er i s not qui t e so cl ose t o t he heart
of a cont ract (t he chart erpart y) as i s a numbered addendum and
perhaps, i f l egal l y t est ed, a si de l et t er woul d not carr y t he wei ght of an
addendum.
I t i s common pract i ce i n sea-t radi ng, however, not t o draw up a
chart erpart y f rom a bl ank f orm but no base negot i at i ng upon a previ ous
f i xt ure, al t eri ng mai n t erms and addi t i onal cl auses al i ke as requi red.
Thi s syst em i s bot h l abour -savi ng and expedi ent , at t he same t i me
provi di ng evi dence t o shi powners and t hei r brokers t hat cert ai n cl auses
t hey encount er i n t he chart erpart y and perhaps f i nd unat t ract i ve have
been pr evi ousl y agreed by ot her owners.
I n cert ai n cases, where chart er i ng busi ness i s sub- l et by a head
chart erer, t he sub-chart erer may be rest ri ct ed t o negot i at i ng st ri ct l y on
t he basi s of t he head-chart erpart y, usi ng onl y cl auses t hat ar e i dent i cal
t ermed back-t o-back wi t h t he mai n, governi ng cont r act . Each
chart erpart y may di f f er i n some part i cul ar aspect , some including
peculiarities not seen in others. It is the task of the sea trader to be aware
of the pitfalls and advantages of major charterparty forms, and for
shipbrokers to advise their principals of these when conducting chartering,
so that by adept negot i at i on t he most f avourabl e concl usi on can be
reached.
Wi t h some document s i t i s commonpl ace duri ng f i xi ng t o
negot i at e t hat pr i nt ed sect i ons of t ext be del et ed or amended i n some
way. These negot i at i ons are al ways subj ect , however, t o t he rel at i ve
st rengt hs of t he part i es i nvol ved and, al t hough one or ot her may be f ul l y
aware of t he pot ent i al pi t f al l s of a cert ai n cl ause, i t may not be possi bl e
t o al t er i t f avourabl y i f t he ot her part y i s negot i at i ng f rom a posi t i on of
st rengt h. Addi t i onal l y, dependi ng upon t he part i cul ar ci rcumst ances of

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t he voyage under negot i at i on, cert ai n wordi ngs may wel l have little effect
whilst, for another voyage and another set of circumstances, the phraseology
agreed upon may make all the difference between the success of financial
failure of the venture.
But t o st art wi t h a sea-t rader owes i t t o hi msel f and hi s pr i nci pal s
t o be at l east aware of common chart erpart y wordi ngs and al t erat i ons
t heret o t hat act advant ageousl y or ot herwi se t o prospect i ve vent ur es.
Unf ort unat el y, i t i s not possi bl e t o l ear n al l of t hese t echni cal
pecul i ari t i es f rom books on t he subj ect . Much must be l earned f rom
exper i ence and f rom t he advi ce of col l eagues. Knowl edge can al so be
gai ned f rom compari son bet ween bl ank pro-f orma and previ ousl y
negot i at ed cont ract s, and f rom i nt el l i gent perusal of shi ppi ng
newspaper and magazi ne report s of shi ppi ng di sput es and l egal
deci si ons. I mpl i cat i ons f or chart er i ng of l egal deci si ons are r eport ed i n
ci rcul ars i ssued by bodi es such as BI MCO, P & I Cl ubs and t he l i ke al l
essent i al readi ng f or t he sea-t rader.
Drawi ng up Chart erparti es Once negot i at i ons l eadi ng i nt o a f i xt ure
have been concl uded, i t becomes t he t ask of t he shi pbroker act i ng f or
t he chart erer t o draw up t he chart erpar t y, amendi ng t he pr i nt ed t ext
where necessar y, and addi ng appropri at e si de cl auses and addenda.
Care shoul d be t aken t o avoi d repet i t i on and t he i ncl usi on of i rrel evant
and unnecessar y cl auses whi ch are l i abl e t o creep i n i f t he f i xt ure i s
based upon a compl et ed chart erpart y dr awn up on a pr evi ou s occasi on.
But not hi ng shoul d be del et ed, i nsert ed or al t ered wi t hout t he
agreement of t he owner s br oker. I t i s al so advi sabl e t o i ncl ude t he t ext
of al l cl auses agreed upon, not merel y t o ment i on t hem. For exampl e, i f
prot ect i ve cl auses ar e i ncl uded eg t he Bot h t o Bl ame Col l i si on Cl ause
i t i s not real l y good enough t o st at e t hat i t i s deemed t o be i ncl uded.
I t shoul d act ual l y be at t ached f or al l t o read i f requi red.
There are school s of t hought on what shoul d happen next .
I deal l y, bef ore any person si gns a chart erpart y, i t shoul d be checked by

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al l concerned so as t o conf i rm t hei r agreement wi t h t he cont ent s. I t i s
al so pol i t e t o f ol l ow t hi s course of act i on. However, where t he part i es
are spread across t he gl obe, t hi s i s i mpract i cabl e and t i me- consumi ng.
Of course, a f i xt ure has been made verbal l y or i n a seri es of t el ex
messages or cabl es, and t he chart erpart y s exi st ence or ot herwi se does
not al t er t hat agreement . But a chart erpart y s pri me f unct i on i s t o
f act ual l y record an agreement i n an easi l y read document , so as t o
avoi d l at er mi sunderst andi ngs or poor memor y. Thus i t s ear l y
product i on i s i ndeed desi rabl e.
For pract i cabl e pur pose, t heref ore, i t i s best t hat t he chart er
broker prompt l y prepares t he document and ei t her submi t s same t o hi s
pri nci pal , or si gns on hi s pr i nci pal s behal f under aut hori t y so t o do,
bef ore di spat chi ng t he hal f -si gned ori gi nal t o t he owner s broker,
ret ai ni ng worki ng copi es f or hi s own and hi s pr i nci pal s use. Any errors
whi ch t he owner s broker di scovers upon checki ng t he chart erpart y
shoul d be di scussed wi t h t he chart erer s broker and, i f necessar y,
rect i f i ed. Once cont ent t hat t he document bef ore hi m f act ual l y
represent s al l t hat has been agreed, t he owner s br oker shoul d si mi l ar l y
arrange f or hi s pri nci pal t o si gn or shoul d hi msel f si gn under
appropr i at e aut hor i t y.
I t i s t hen a mat t er of court esy t he chart erer s broker havi ng
drawn up t he ori gi nal document f or the owner s broker t o provi de
what ever copi es are requi red by t he vari ous part i es t o t he cont ract , t he
ori gi nal chart erpart y usual l y bei ng ret ai ned by t he owner. But this
procedure is by no means sacrosanct, and can be varied at the whim of the
parties concerned, the above formula being suggested merely from the point of
view of convenience and practicality.
Si gni ng Charterparti es Care should be taken by the brokers when and if
signing on behalf of their principals to show the means of that authority, eg : -
By t el ex aut hori t y f rom

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MEGABULK UK CORPORATI ON, Monr ovi a
For and on behal f of
ABACUS CHARTERI NG LI MI TED, London
(as agent s or brokers onl y)
John Smi t h, Di rect or .
I t i s i mport ant t o i ncl ude t he wordi ng: - . . as agent s (or
brokers) onl y , t o i l l ust rat e cl earl y t hat t he rol e of Abacus i s not
t hat of pri nci pal .
Thus, wi t h such a qual i f i ed si gnat ure, a br oker wi l l not be hel d
personal l y l i abl e f or t he perf ormance of t he cont ract unl ess t here
i s a cl ause or worki ng i n t he chart erpart y cl ear l y showi ng t hat t he
broker i s i n f act a pri nci pal . Addenda and si de l et t ers shoul d be
t reat ed i n t he same f ashi on as chart er part i es, bei ng si gned by
bot h part i es, or t hei r brokers, i n t he manner descr i bed above.
Addi ti onal Ori gi nal s Occasi onal l y, perhaps i n agreement s where
document ar y credi t s are i nvol ved, i t may become necessar y t o produce
t wo or more ori gi nal chart erpart i es . I n such cases, each document
shoul d bear i t s pr oper t i t l e eg Fi rst Or i gi nal , or Second Ori gi nal .
The Voyage Charterpart y Thi s document overs t he l argest proport i on
of any f i xt ures arranged on t he chart eri ng market , despi t e t he t rend i n
recent years f or chart erers t o t ake more vessel s on t r i p t i me chart er
t erms t han was once t he case. Whi l st t he f ol l owi ng l i st of cal uses i s by
no means exhaust i ve, i t provi des some i dea of t he normal cl auses
requi red i n a voyage chart erpart y f or dry- cargo vessel s : -
Li st of Voyage Charterpart y Cl auses
1. Preambl e 17. Overt i me
2. Cargo descr i pt i on / quant i t y 18. Shi f t i ng/ Seawort hy Tri m

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3. Loadi ng pl aces 19. Cargo Separat i on & Tal l yi ng
4. Loadi ng orders / rot at i on 20. Dues and Taxes
5. Di schargi ng Pl aces 21. Port s Agent s
6. Di scharge orders/ rot at i on 22. Bi l l s of Ladi ng
7. Laydays and Cancel l i ng 23. Li ght eni ng
8. Frei ght 24. General Average
9. Cost of Loadi ng/ Di schargi ng 25. St ri kes
10. Not i ce of Resadi ness/ Ti me 26. Except i ons
Count s
11. Loadi ng/ Di schargi ng rat es 27. Commi ssi ons
12. Except ed Peri ods 28. Prot ect i on Cl auses
13. Demurrage/ Despat ch 29. Li en
14. Not i ces 30. I ce
15. Shi p s Gear 31. Si gnat ure
16. Grab Di scharge/ St evedore Damage

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El ements of a Voyage Charterpart y: We wi l l now exami ne t he i t ems on
t he above l i st i n t he cont ext of an act ual pri nt ed chart er part y f orm, wi t h
ref erence t o t he t ext of t he MULTI FORM Mul t i -pur pose Chart erpart y
1982 as revi sed i n 1986, whi ch document you wi l l f i nd reproduced i n
Appendi x 4. 2 t o t hi s Lesson, wi t h occasi onal ref erences t o t he
AMWELSH chart erpart y i n Appendi x 4. 3. You will probably find the best
way of understanding the following references is to first read the relevant text
in the MLTIFORM charterparty and then the written commentary bel ow.
Preambl e: Thi s can be ext ensi ve i n some chart erpart i es. I n t he
MULTI FORM much of what may be f ound i n pr eambl es of cer t ai n f orms
i s cont ai ned i n cl ause 1. There are t wo i mport ant aspect s of t he bri ef
MULTI FORM preambl e, however t he pl ace and dat e of t he
chart erpart y.
Pl ace: Thi s can be i mport ant as, i n t he absence of a cl ause t o t he
cont rar y, t he pl ace where a cont ract i s deemed t o have been made may
govern t he l aw whi ch i s t o be appl i ed t o t hat cont ract i n t he event of a
di sput e. Thus, i f t he pl ace i s London, Engl i sh Law may ver y l i kel y
prevai l . The pl ace can be def i ned as where the contract is made, usually
the domicile of the charters broker, not necessarily the abode of one or other of
the principals. For certainty that a dispute can be heard under particular
jurisdiction, it is strongly advisable that a contract should i ncl ude an
excl usi ve j uri sdi ct i on cl ause , i n ot her words, t he chart erpart y shoul d
st at e, f or exampl e, t hat Engl i sh Law i s t o appl y .
Date: Equal l y i mport ant , t he dat e t o be shown i s t hat by whi ch f i xt ure
negot i at i ons are concl uded, wi t h al l subj ect s l i f t ed i n ot her words,
when al l negot i at i ng f ormal i t i es are compl et e.
Names and Domi ci l es of contracti ng parti es: (Cl ause 1) The names
of t he shi powner (or di sponent owner) and chart erer, and t hei r
domi ci l es i . e. t hei r f ul l st yl es .

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1. Name and bri ef descri pti on of vessel : (Cl ause 1) The MULTI FORM
al l ows f or a more compl et e vessel descri pt i on i n t he mai n, pr i nt ed part
of t he f orm t han many (eg. Compare wi t h t he AMWELSH), ot hers
ut i l i zi ng an addi t i onal , r i der cl ause, t o provi de conci se det ai l s rel evant
t o t he t rade/ cargo envi saged. The posi t i on of t he vessel at t he t i me t he
cont ract i s negot i at ed i s al so i mport ant (see l i ne 4) as t hi s governs i t s
l i kel y readi ness t o l oad (see l i ne 5). These l i nes are of t en t reat ed ver y
l i ght heart edl y i n cont emporar y negot i at i ons and you wi l l f requent l y
encount er t he si mpl e wor d t radi ng af t er t he pr i nt ed wor d now as i n
l i ne 4. The court s, however, at t ach consi derabl e i mport ance t o t he
accuracy of i nf ormat i on about except ed readi ness t o l oad and any
subst ant i al error i n t he st at ed posi t i on of t he vessel can be consi dered
mi srepresent at i on. Thi s coul d, t her ef ore, be t reat ed as a breach of
condi t i on ent i t l i ng t he chart erer t o resci nd t he cont ract . I n t he absence
of any more speci f i c st i pul at i on, t he shi p i s obl i ged t o proceed t o t he
l oadi ng port wi t h r easonabl e despat ch . I t woul d not , f or exampl e, be
ri ght f or a shi powner who had f i xed hi s shi p wi t h l aydays and cancel i ng
1/ 20 Jul y st at i ng now t radi ng and expect ed ready t o l oad 3
r d
Jul y t o
sl i p i n an addi t i onal short voyage and t ur n up on t he 17
t h
Jul y i nst ead of
around t he 3
r d
. The t i me span bet ween l aydays and cancel i ng i s t o
cover t he owner agai nst unf oreseen del ays and i f t he owner has been
reckl ess or del i berat el y mi sl eadi ng i n t he expect ed readi ness of hi s
shi p, t he chart er er woul d be ent i t l ed t o cl ai m damages f or any l oss
at t ri but abl e t o t he undue del ay. The chart erer woul d not , of course, be
permi t t ed t o resci nd t he chart er unl ess t he resul t of t he breach was
such as t o f rust rat e t he ent i re obj ect of t he cont ract .
Condi ti on of vessel : (Cl ause 2). I t i s usual f or a shi powner (or
di sponent owner) t o conf i rm t hat a vessel i s i n a sui t abl e condi t i on
saf el y and pr oper l y t o undert ake t he cont ract ual voyage (l i ne 24).
2 Cargo descri pti on and quanti t y: (Cl ause 2). Commodi t y and nat ure
of goods t o be carri ed (eg i n bul k or bagged); st owage f actor (eg about
55 cubi c f eet per t onne); and ei t her mi ni mum / maxi mum quant i t y or

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cargo si ze margi ns and i n whose opt i on (eg 12, 000 t onnes, 5% mor e or
l ess i n owner s opt i on).
3. Loadi ng Pl aces: (Cl ause 2) Names of l oadi ng pl ace(s) and/ or range
(eg Bordeaux / Hamburg range); ment i on of number of saf e
bert hs/ anchorages chart erers ent i t l ed t o use at each pl ace; whet her
vessel t o remai n al ways af l oat or saf el y aground ; maxi mum/ mi ni mum
avai l abl e draf t s.
4. Loadi ng port orders/ rotati on : (l i nes 31 t o 34). Rot at i on can be ver y
i mport ant , si nce ext r a st eami ng can be i nvol ved, addi ng t o an Owner s
expenses, whereas i t mi ght be essent i al f or a chart erer t o negot i at e
l oadi ng i n a part i cul ar rot at i on so t hat shi p avai l abi l i t y f i t s i n wi t h cargo
avai l abi l i t y.
5 & 6 Di schargi ng pl aces and port orders/ rotati on: (Cl ause 3). The
comment s under 3 and 4 above appl y.
7Laydays and Cancel l i ng: (Cl ause 4). The spread of dat es dur i ng
whi ch a vessel i s t o present her sel f at the f i rst (or sol e) l oadi ng port .
Thi s spread shoul d be ent ered i n a cont ract , as wel l as condi t i ons under
whi ch t he cont ract can be cancel l ed i n t he event t hat t he vessel i s
unabl e t o meet t hose dat es.
8. Frei ght: (Cl ause 5). The amount and currency of f rei ght , t o whom,
where and when payabl e. The r i sk of vessel and/ or car go l oss on
passage i n r el at i on t o f rei ght shoul d be speci f i ed i . e. whet her f rei ght
i s deemed earned as cargo i s l oaded ( as i n t he MULTI FORM) or upon
del i ver y (eg. As i n t he CORE 7).
9. Cost of Loadi ng / Di schargi ng: ( Cl ause 6) whi ch of t he part i es t o
t he cont ract i s t o appoi nt and pay f or cargo handl i ng at each port . (See
al so Cl ause 6 of t he AMWELSH).

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10. Noti ce of Readi ness / Ti me Count i ng: (Cl ause 7). An i mport ant
cl ause i n t he cal cul at i on of Layt i me see Lesson Si x).

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11. Loadi ng / Di schargi ng Rates: (Cl ause 8). The speed at whi ch
cargo-handl i ng act i vi t i es are t o be perf ormed.
12. Except ed Peri ods : ( Cl ause 8) Peri ods when car go-handl i ng
normal l y does not t ake pl ace and t heref ore, wi l l not count i n t he
comput at i on of l ayt i me unl ess work i s act ual l y carri ed out duri ng such
t i mes when onl y t i me act ual l y used shal l count . You wi l l , l at er on,
encount er chart ers where t he l oadi ng takes pl ace at hi ghl y aut omat ed
t ermi nal s (eg i ron ore) where t her e are no except ed peri ods and t he
abbrevi at ed SHI NC (Sundays and hol i days i ncl uded) wi l l appear i n t he
negot i at i ons.
13. Demurrage / Despatch : (Cl ause 9). Dai l y amount of l i qui dat ed
damages (demurrage) payabl e by a chart erer i n t he event a vessel i s
det ai ned i n port beyond t he maxi mum permi t t ed l ayt i me, as wel l as any
st i pul at i ons t o di spat ch (at usual l y hal f t he rat e of demurrage) see
Lesson Si x.
14 Noti ces: (Cl ause 10). A shi powner/ mast er may be requi r ed t o gi ve
comprehensi ve not i ces of a vessel s expect ed arr i val at t he f i rst (or
sol e) l oadi ng port , f ai l i ng whi ch t he shi powner may f ace a penal t y i n t he
f orm of ext ra l ayt i me al l owed a chart erer.
15 Shi p s Gear: (Cl ause 12). A normal cl ause i n dr y cargo shi ppi ng,
speci f yi ng t hat a vessel s gear wi l l be mai nt ai ned t o a hi gh st andard
and speci f yi ng what happens i n t he event of gear breakdown resul t i ng
i n ext ra expense.
16. Grab di scharge/ Stevedore damage : Cl auses 14 & 15). Owners
normal l y conf i rm t hat a vessel i s sui t abl e f or grab di scharge and
f ormal i t i es need t o be set out i n t he event t hat a vessel suf f ers damage
duri ng t he cargo-handl i ng processes. Frequent l y, however, mast ers are
requi red t o not i f y chart erers or st evedores upon occurrenc e of

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damage, even t hough t hi s may not be di scovered unt i l overst owed
cargo i s unl oaded at port s of di scharge. Thus i t i s reasonabl e t hat t he
word occurrence be repl aced by di scovery .
17. Overti me. (Cl ause 17) who i s t o pay f or overt i me.
18. Shi fti ng / Seaworthy tri m: (Cl auses 18 & 19). Who i s t o pay
shi f t i ng cost s (i f any) bet ween bert hs, al so whet her t i me so used i s t o
count as l ayt i me. The vessel i s t o be l ef t i n saf e seawort hy condi t i on
bet ween port s. I t i s i mport ant t o add i n a cl ause of t hi s nat ur e t hat i t i s
up t o t he Mast er t o deci de whet her a vessel i s i n saf e seawort hy t r i m or
not . Si l ence on t hi s poi nt may l ead t o event ual di sput e.
19. Cargo Separati ons and Tal l yi ng: (Cl auses 13 & 16). Where a
vessel i s t o carr y vari ous parcel s of cargo, i t may not be possi bl e f or al l
separat i ons bet ween t he i ndi vi dual parcel s t o be nat ure i . e.
separat ed by bul kheads and/ or, i n t he case of t weendeckers, by
t weendecks. The part i es may need t o agree bet ween t hemsel ves on
how parcel s l oaded i n t he same compart ment are t o be separat ed eg
by pol yet hyl ene sheet i ng or by t arpaul i ns and on who i s t o suppl y and
pay f or t hi s f aci l i t y. The t al l yi ng (checki ng) of cargo as i t i s l oaded or
di scharged i s f requent l y an expensi ve operat i on and, i f not carri ed out
consci ent i ousl y, subst ant i al cargo cl ai ms can ar i se f or al l eged short
del i ver y bad condi t i on, et c. I t i s essent i al t hat some provi si on as t o who
i s responsi bl e at l east f or payment of t al l y cl erks be ent ered i n a
chart erpart y coveri ng t he l oadi ng of bagged or si mi l ar cargo.
20. Dues and Taxes: (Clause 20). This clause specifies which party to the
contract is responsible for taxes which may be levied against the vessel and/or
her cargo and/or the freight.
21. Port Agents: ( Cl ause 21). I n any chart erpart y i t i s advi sabl e t hat
ref erence be made as t o whi ch of t he part i es i s responsi bl e f or t he

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sel ect i on of an agent . I t i s i mport ant t o remember t hat t he agent
remai ns t he ser vant of t he shi powner, and t he shi powner remai ns
responsi bl e f or payi ng t he port cost s and t he agency f ee. Nevert hel ess,
t he appoi nt ment of an ef f i ci ent agent i s al so i mport ant t o a charact er,
who wi l l need t o f eel secure i n t he knowl edge t hat proper l i ai son i s
bei ng mai nt ai ned bet ween t he agent and, say, a cargo shi pper.
Consequent l y i t i s of t en t he case t hat chart erers speci f i cal l y negot i at e
t hat t hey have t he ri ght t o nomi nat e t he port agent s t hat wi l l be
appoi nt ed by t he shi powner
22. Bi l l s of Ladi ng: (Cl auses 22 & 4). The f ul l i mport of t hese
provi si ons wi l l be bet t er underst ood af t er readi ng Les son Ei ght . For t he
present i t i s i mport ant t o make sure t hat si mi l ar provi si ons shoul d be
cont ai ned i n al l voyage chart erpart i es.
23. Li ghteni ng: (Cl ause 23). Where cargo l i ght eni ng i s necessar y, a
comprehensi ve cl ause coveri ng al l f act s of t hi s somet i mes compl ex
operat i on shoul d be negot i at ed. The MULTI FORM and AMWELSH
cl auses bet ween t hem cover sever al of these f act s but not nearl y al l of
t hem. (You mi ght l i ke t o t hi nk about what el se i s necessar y t o ment i on
bef ore reachi ng t he end of t hi s l esson).
24. General Average: (Cl ause 26). Al l cl auses speci f yi ng where
General Average ( i f any) i s t o be adj ust ed (eg i n London ) and/ or pai d,
i rrespect i ve of t he port s of cal l i nvol ved and t he l aws r el at i ng t o GA
t hreat eg as per York/ Ant werp Rul es 1974 . Earl i er c hart erpart i es
may r ef er i n t hei r pri nt ed t ext t o York/ Ant werp Rul es 1950, whi ch shoul d
be amended dur i ng negot i at i on t o r ef l ect t he l at est Rul es. I t i s
somet i mes negot i at ed al so t hat where a cargo i nvol ves voyages t o/f rom
t he Uni t ed St at es or Uni t ed St at es pr i nci pal s, t he New Jason Cl ause be
i ncorporat ed i nt o t he cont ract , deal i ng wi t h General Aver age Law and
pract i ce f or adj ust ment s made i n t he Uni t ed St at s (see Cl ause 22 of t he
AMWELSH).

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25. Stri kes (Cl ause 27). Bot h part i es t o a chart erpart y have ri sks and
l i abi l i t i es i n t he event of a st ri ke. Var i ous cl auses exi st , some i n f ar
great er det ai l t han i n ot hers. The MULTI FORM r epeat s t he St r i ke
Cl ause f rom t he GENCON chart erpart y, not or i ous f or i t s conf usi ng
l anguage and ver y much i n owner s f avour. Most st r i ke cl auses are i n
f act bi ased i n f avour of charerers, pl aci ng t he ri sk of st ri kes on owners
eg compare the sweepi ng provi si ons of the AMWELSH Clause 4.
26. Exceptions: (Caluse 28). The rights of contacting parties to cancel the
charterparty in case of events making its performance virtually impossible
eg Force Majeure or Acts of God.
27. Commi ssi on: ( Cl ause 31). Speci f i es t he amount and t o whom
commi ssi ons and brokerages are payabl e, usual l y addi ng t hat
commi ssi ons/ brokerages are payabl e on f rei ght , deadf rei ght and
demurrage.
28. Prot ecti ng Cl auses : ( Cl auses 32 & 33). A set of cl auses commonl y
i ncl uded i n t he pri nt ed f rom of a chart erpart y or as addi t i onal cl auses.
The New Jason al r eady ment i oned i s one such cl ause t hat i s not
i ncl uded i n t he MULTI FORM. However, ot hers have t hei r rol es t o pl ay,
whi ch are : -
(i ) P & I Bunkeri ng Cl ause : Set s out owners ri ght s t o devi at e f or
bunkers duri ng t he cont ract ual voyage.
(i i ) Cl ause Paramount : i ncorpor at es a set of rul es i nt o t he cont ract
(and i nt o bi l l s of l adi ng i ssued under t he cont ract ), whi ch govern t he
ri ght s and responsi bi l i t i es of t he carri er. Appropri at e amendment shoul d
be made t o t he ol der f orms t o ensure t hat t he l at est rul es appl y, t he
MULTI FORM updat i ng t he l ong est abl i shed Hague Rul es, t o i ncorporat e
t he ague/ Vi sby Rul es of 1968. Ot her chart erpart i es i nvol vi ng voyages
t o/ f rom Ameri ca and/ or Canada shoul d ut i l i ze ei t her t he USA or t he
Canadi an Cl auses Paramount (see t he AMWELSH, Cl ause 22).

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(i i i ) Both to Bl ame Col l i si on: Covers an owner s r i ght s i n respect of
Ameri can Law i n case of col l i si on at sea.
29 Li en and Cesser: (Cl ause 24). Most chart erpart i es cont ai n a cesser
and l i en cl ause and t he MULTI FORM and AMWELSH (Cl ause 26) are no
except i ons.
30. I ce: (Cl ause 33). Dependi ng on t he t rade i nvol ved, i t may not be
necessar y f or an i ce cl ause t o be i ncl uded i n a chart erpart y, but wher e
one i s requi red, great care shoul d be t aken over i t s wordi ng.
The AMWELSH i s si l ent on t hi s aspect of t radi ng, whi l st t he
MULTI FORM uses t he BI MCO-recommended GENCON I CE CLAUSE,
whi ch i s wi del y, r eproduced i n ot her chart erpart i es f orms, al t hough
some omi t t he ref erence t o spr i ng (sub- 9 cl ause d). The object of an ice
clause should be to prevent a shipowner and his master being left with no alternative
but to attempt to proceed to a contractual destination irrespective of ice conditions,
and to avoid damage that may be caused to ship and cargo as a result.
31. War Ri sks : (Cl ause 33). War ri sks cl auses shoul d be exami ned i n
det ai l as some are unf ai r t o shi powners, ot hers t o chart erers and/ or
pat ent l y unsui t abl e f or t he purpose i nt ended. For exampl e, t he Chamber
of Shi ppi ng War Ri sk Cl auses 1 and 2 are some f i f t y years ol d, out of
dat e, and si l ent on several i mport ant i ssues, one bei ng cancel l at i on
ri ght s i n t he case of an out break of war bef ore or af t er a vessel s
voyage t o her l oadi ng port , or af t er arri val . Yet st i l l t he Chamber of
Shi ppi ng Cl auses are wi del y ut i l i zed see, f or exampl e, t he AMWELSH
Cl ause 24.
A War Ri sk Cl ause shoul d pr ovi de a shi powner wi t h t he r i ght t o
ref use t o al l ow hi s vessel and her crew t o ent er or t o remai n i n an area
whi ch has become dangerous due t o war l i ke act i vi t y. To accompl i sh t hi s
obj ect i ve, MULTI FORM uses t he VOYWAR 1950 Cl ause, i t sel f f ort y

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years ol d and al t hough bet t er sui t ed t o current needs, bi ased i n owner s
f avour and st rongl y recommended by BI MCO f or i ncl usi on i n al l voyage
chart erpart i es.
32. Si gnature No chart erpart y i s compl et e wi t hout t he si gnat ures of or
on behal f of t he part i es concerned.
Voyage Charterparti es for Speci fi c Trades A qui ck gl ance down t he
l i st of chart erpart i es i n Appendi x 4 : 1 wi l l show var i ous voyage
chart erpart i es under t he headi ngs, grai n, coal , f ert i l i zers, et c. As wel l
as cont ai ni ng basi c cl auses as det ai l ed i n t he above el ement s sect i on,
each of t hese t rade chart erpart i es has speci f i c cl auses t hat are of
part i cul ar i mport f or t he commodi t y i nvol ved.
Grai n: Appendi x 4. 7 cont ai ns t he i mport ant NORGRAI N char t erpart y, as
revi sed i n 1989. St udent s shoul d l ook part i cul ar l y at t he f ol l owi ng
cl auses t hat ref er speci f i cal l y t o grai n car ri age rel at ed probl ems: -
Cl ause 12 Sel f -t ri mmi ng / Wi ng t anks
14 Cargo separat i ons
15 Securi ng of Cargo / Bag bl eedi ng
16 Cargo f umi gat i on
18 (e) Cargo compart ment i n i nspect i on.

I t i s usual i n grai n t radi ng t hat f ul l f rei ght (or at l east a
subst ant i al percent age) i s pai d bef ore rel ease of t he bi l l (s) of l adi ng by
t he owners/ mast er t o t he shi ppers. The responsi bi l i t y of payi ng t he cost
of l oadi ng can var y, bei ng negot i abl e as ei t her f or owner s account and
ref erred t o as gross l oad or f or chart erer s (shi pper s) account ei t her
ref erred t o as f ree l oad (f ree of expense t o t he vessel ) or net t t erms .
The NORGRAI N cl auses 10 & 11 l eave i t t o t he part i es t o deci de and t o

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record t he resul t of t hei r negot i at i ons.
Coal : The AMWELSH i n Appendi x 4: 3 i s now t he wor l d s maj or coal
chart erpart y deai ng not onl y wi t h cargoes of coal f rom Ameri ca (as t he
name i mpl i es) but wi t h coal cargoes f rom el sewher e eg Aust ral i a. The
l at est edi t i on was revi sed i n 1979 f rom t he ori gi nal versi on whi ch, as
t he f ul l name t el l s us, was an adapt at i on of t he Wel sh Coal Chart er
1896 and much of t he wordi ng i s over a cent ur y ol d. Here l oadi ng cost s
are di vi ded. Chart er ers pay wharf age dues, l eavi ng owner s t o pay not
onl y port charges on t he vessel , i ncl dui gn pi l ot ages, agency f ees and
consul ages , but al so l oadi ng, dumpi ng and t ri mmi ng cost s (see Cl ause
6). Dumpi ng i s speci f i c t o t he pract i ce i n Ameri ca of dumpi ng coal f rom
rai l way wagons at t he l oadi ng port . Thus t hi s expense must be i ncl uded
i n any voyage est i mat es conduct ed by t he shi powners. Cl ause 4 shoul d
be read part i cul ar l y caref ul l y, especi al l y t he ref erence ( i n l i nes 32 & 33)
t o causes beyond chart erers cont rol . Thi s cl ause was t est ed under
Engl i sh Law dur i ng t he 1980 s i n t he case of t he MOZART and i t was
hel d t hat t i me i nt er rupt i ng l oadi ng because of breakdowns of shore
machi ner y beyond Chart erers cont rol i . e. not operat ed by Chart erers
wi l l not count as l ayt i me. Thus t he ri sk of breakdown of sore
equi pment i s nearl y al ways at Owners r i sk.
Ore: Appendi x 4. 8 cont ai ns t he OREVOY 1980 chart er part y. There ar e
var i ous ore chart ers and we coul d have sel ect ed t he l ong-est abl i shed
MEDI TERRANEAN ORE t he C ORE 7 c/ p but deci ded agai nst t hi s
because of t he ol d-f ashi oned l anguage empl oyed and t he ref erences t o
obsol et e port s and currency whi ch, i n any case, are nowadays wi del y
del et ed, so much so t hat t he C ORE 7 i s l i t t l e more t han a wi del y
del et ed mai n f orm wi t h var i ous i ndi vi dual l y desi gned ri der s at t ached.
However, some ore chart ers ( i ncl udi ng t he C ORE 7) have t he same
penal i zi ng provi si ons as cont ai ned i n Cl ause 4 of t he AMWELSH coal
chart erpart y (see above) al so, f or rel at i vel y short durat i on deepsea
voyages, i t i s of t en t he case t hat f rei ght i s pai d onl y af t er del i ver y of
t he cargo at t he di scharge port . Ore i s usual l y l odaded i n wet t ened

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condi t i on, and wei ght l oss dur i ng t he voyage as moi st ure evapor at es
and drai ns may be consi derabl e. Consequent l y, al t hough t he OREVOY
i s not ver y cl ear on t hi s poi nt , i t i s normal l y t he case t hat c hart erers
negot i at e t he ri ght t o pay f rei ght on ei t her (1) t he bi l l of l adi ng quant i t y
est abl i shed at t he l oadi ng port , (2) on t he out -t urn wei ght ascert ai ned at
t he port of di scharge, or (3) basi s l ess hal f of one percent of t he bi l l of
l adi ng wei ght , i n l i eu of wei ghi ng , f requent l y t he l at t er.
Ferti l i sers: There are var i ous f ert i l i zer chart erpart y f orms. The one
sel ect ed here i n Appendi x 4: 9 i s t he AFRI CANPHOS 1950, wi del y
ut i l i zed i n t he maj or t rade i nvol ved around t he export of bul k phosphat e
rock f rom West Af ri ca (eg Kpeme) ri ght round t o Nort h Af ri ca (eg Sf ax).
A peculiarity of this trade is that loading costs are frequently for the
shipowners account (as per Clause 7) and loaded at a scale rate
established by the cargo quantity (see the scale inserted at the side of the
charterparty). This is described as Scale Gross Load and costs are
currently around US$ 2.00 per tonne loaded plus a percentage addition for
value added tax. Occassionally the agreement may also allow for gross
discharge. There i s tradi t i onal t urn t i me appl i cabl e at t he l oadi ng post ,
as expressed i n Cl ause 4 of t he char t erpart y, and somet i mes t hi s
appl i es al so at t he di schargi ng port (se Cl ause 18).
Other Commodi ti es: Ot her commodi t i es have speci al i zed cl ause i n
t hei r chart erpar t i es eg t i mber and t hose st udent s l i kel y t o be
engaged i n t hose t rades shoul d f ami l i ar i ze t hemsel ves wi t h any
pecul i ari t i es i nvol ved. Fact ors speci f i c t o var i ous t rades wi l l be f ound i n
CARGOES as commodi t i es are encount ered upon readi ng t he book.
However, st udent s are advi sed t o t ake seri ousl y t he suggest i on of
st art i ng t hei r own chart erpart y l i brar y addi ng t o t hi s as and when t hey
come across new f orms, whi ch shoul d be read t hrough bot h f or t he sake
of i nt erest and t o gai n f urt her knowl edge.

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Sel f Assessment Questi ons
1. Who pays f or t he cost of l oadi ng when gross t erms appl y?
2. What chart erpart y f orm woul d you expect t o use f or a cargo of
coal f orm Aust ral i a? Auscoal
3. Name f our bodi es act i ve i n draf t i ng chart erpart y f orms.
BI MCO/ ASBA/ FOWOSBA/ NYPE/ I CC.
4. What ef f ect does an I ce Cl ause have?
The Ti me Charter Part As we have seen f rom Lesson Three,
t i mechart er i ng ca be sub-di vi ded bet ween peri od t i mechart er s perhaps
i nvol vi ng sever al years and t ri p t i mechart ers, f or one or several t ri ps.
There are no chart erpart y f orms desi gned pur el y f or t ri p chart ers, an
empl oyment t echni que t hat has become part i cul arl y popul ar dur i ng
recent years, t ri p chart ers bei ng negot i at ed on st andar d t i mechart er
f orms and adapt ed sl i ght l y where appropri at e. Al t hough consi derabl y
f ewer i n number t han t he wi de choi ce avai l abl e f or voyage chart eri ng,
t here i s an adequat e number of dry-car go t i mechart er f orms f or use i n
t he i ndust r y, al t hough by f ar t he l argest number of deep-sea dry- cargo
t ri ps and per i ods are f i xed on t he basi s of t he New York Produce
Exchange Chart erpart y, f i rst drawn up as l ong ago as 1913. I t has been
updat ed si nce, most not abl y i n 1981, when i t was renamed ASBATI ME.
Nonet hel ess, by t hat t i me t he 1946 ver si on had become wi del y used
and, t o t he basi c pr i nt ed t ext , many char t erers had added over t he year s
numerous si de- cl auses. I t t ranspi red t hat f ew chart erers wer e prepared
t o abandon t hei r NYPE 1946 + si de cl auses chart erpart y and so, despi t e
t he avai l abi l i t y i n t he ASBATI ME of a neat er, more up t o dat e
chart erpart y i ncorporat i ng many of t he previ ous NYPE cl auses, and
st andard ri der addi t i ons, t he market remai ns wedded t o t he NYPE 1946
c/ p. Consequent l y, al t hough f or conveni ence we wi l l exami ne t he
el ement s of a t i me chart erpart y based on t he ASBATI ME ( Appendi x 4 :

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4), st udent s wi l l al so f i nd t he NYPE f orm encl osed i n t he appendi ces
(Appendi x 4: 5), si nce i t i s essent i al t hat shi pbrokers i nt endi ng t o work i n
t he deep-sea si de of t he dry-cargo i ndust ry, have a worki ng knowl edge
of t hat document i n part i cul ar.

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Whi l st t he f ol l owi ng l i st i s by no means exhaust i ve, i t provi des
some i dea of t he normal cl auses requi red i n a voyage chart erpart y f or
dry-cargo vessel s : -
Li st of Ti me Chart erpart y Cl auses
1. Preambl e 17. Logbooks
2. Vessel Descr i pt i on 18. Spercargo
3. Durat i on of Peri od/
Descr i pt i on of Tri p(s) 19. Pol l ut i on
4. Tradi ng i nt ent i on/ l i mi t s 20 Sal vage
5. Cargo i nt ent i on/ excl usi ons 21. Layi ng up
6. Vessel Condi t i on 22. Arbi t rat i on
7. Owners responsi bi l i t i es 23. Li en
8. Chart erers responsi bi l i t i es 24. Assi gnment
9. Del i ver y and Redel i very 25. Except i ons
10. Bunkers 26. Requi si t i oni ng
11. Hi re 27. Bi l l s of Ladi ng
12. Of f -hi re 28. St evedori ng Damage
13. Vessel Perf ormance 29. Commi ssi ons
14. Vessel Mai nt enance 30. Prot ect i ve Cl auses
15. Cargo Cl ai ms 31. Si gnat ure
16. Mast er/ Of f i cers

1. Preambl e: Cont rar y t o t he MULTI FORM and t he AMWELSH, t he
preambl e of t he ASBATI ME i s l engt hy, t aki ng up most of t he f i rst page
of t he chart erpart y, and cover i ng a wi de range of subj ect s wi t hi n i t s
t ext , not l east t he pl ace where t he cont ract i s made, t he dat e of t he
chart erpart y and t he names and domi ci l es of t he cont ract i ng part i es.
2. Vessel Descri pti on: (Preambl e l i nes 5/ 23). Dependi ng upon t he
compl exi t y of t he i nt ended t rade, t he descri pt i on of t he vessel may be
more or l ess as f or voyage chart erpart i es, wi t h t he i mport ant addi t i on of
speeds and bunker consumpt i ons. For t he sake of cl ar i t y, i t i s al so
advi sabl e t o i ncl ude cl ari f i cat i on of t he t erm good weat her condi t i ons

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(i n l i ne 19), usual l y wi t h ref erence t o weat her and sea condi t i ons (eg
Beauf ort Wi nd Scal e and, perhaps Dougl as Sea St at e see Lesson
Ni ne) agai nst whi ch f act ors a vessel s perf ormance shoul d be
measured. Not f orget t i ng t he vessel s posi t i on and readi ness (l i ne 23)
whi ch i s as i mport ant t o a t i me chart erer as t o a voyage chart erer.
3. Durati on of Peri od/ Descri pti on of Tri p( s): (Preambl e l i nes
27/ 30). The durat i on of a peri od t i me chart er shoul d be ent ered,
t oget her wi t h a mar gi n ei t her si de of t he f ormal per i od eg 15 days
more or l ess, at chart erers opt i on . The part i es can agree an exact
redel i ver y dat e, but i n pract i ce t hi s i s di f f i cul t t o compl y wi t h and, i n t he
event of l egal di sput es, most court s woul d i mpl y a reasonabl e margi n.
For t ri p-chart ers desi gned f or speci f i c voyages, i t i s common pl ace t o
i nsert an approxi mat i on of t he voyage durat i on eg 45 days
al t hough t hi s i s normal l y qual i f i ed by t he addi t i on of t he words al l goi ng
wel l or about or wi t hout guarant ee . (Here a word of warni ng f or
shi powners and t hei r brokers. Legal l y about wi l l be gi ven a r easonabl e
i mpl i cat i on, An act ual durat i on of 50 days , f or exampl e, coul d be
i nt erpr et ed as about 45 days . However, wi t hout guarant ee means
exact l y means. I n ef f ect redel i ver y af t er onl y 10 days i s l egal l y
sat i sf act or y).
4. Tradi ng I ntenti ons/ Li mi ts: (Preambl e l i nes 57/ 62) Cl ause 6. The
areas of t he worl d i n whi ch t he vessel i s t o b empl oyed shoul d be
ent ered eg worl dwi de, but al ways wi t hi n I nst i t ut e Warrant y Li mi t s
(see Lesson Ni ne) as wel l as l i st i ng t hose count r i es and part s of t he
worl d speci f i cal l y excl uded f rom t he permi ssi bl e t radi ng area. Where
t here i s i nsuf f i ci ent space t o t ype i n t he f ul l agreed dat a, i t may be
necessar y t o i ncl ude same i n a ri der cl ause, usi ng bl ank l i nes i n t hi s
part of t he chart erpart y t o r ef er t he reader t o t he rel evant r i der cl ause.
Thi s al so becomes a l ogi cal poi nt i n some chart erpart i es t o i ncl ude
l i mi t at i on t o t he ef f ect t hat a vessel must t rade al ways bet ween saf e
bert hs and port s , usual l y al ways af l oat .

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5. Cargo I ntenti on/ excl usi ons: (Preambl e l i nes 45/ 56) Cl ause 12).
I ncl ude det ai l s of cargoes whi ch can and t hose whi ch cannot be carri ed
(see ref erence t o cargo excl usi ons i n Lesson Two). Tri p t i me chart ers
of t en speci f y t he act ual cargo t o be carri ed al t hough, i f t hi s i s onl y an
i nt ent i on , a cargo excl usi ons cl ause must st i l l be i ncl uded.
6. Vessel Condi ti on: ( Preambl e l i nes 8/ 9 and l i nes 41/ 454). Just as
f or voyage chart erpart i es, an undert aki ng by t he vessel s owner s t hat
t he vessel i s i n good condi t i on.
7. Owner s Responsi bi l i ti es: (Cl ause 1) Li st s what an owner i s t o
provi de.
8. Charterer s responsi bi l i ti es: (Cl ause 2) Li st s what a chart erer i s
t o provi de
9. Del i very and redel i very: (Preambl e l i nes 34/ 41, Cl auses 28 and
34). Pl aces of del i ver y/ r edel i ver y, l aydays/ cancel i ng, not i ces t o be
gi ven by owners pri or t o del i ver y and by chart erer pr i or t o redel i ver y.
10. Bunkers: (Cl ause 3). I t i s common pract i ce f or t i me chart er ers t o
t ake over and pay t he owner f or bunkers remai ni ng on boar d a vessel
upon del i ver y on t o t i me chart er, and f or owners t o act si mi l ar l y upon
del i ver y, t he quant i t i es of f uel , di esel and/ or gas oi l , and t he pri ces per
t onne of each, bei ng negot i at ed when f i xi ng. I t i s of t en t he case t hat
about t he same quant i t i es and pr i ces prevai l at bot h ends of t he
t i mechart er, al t hough occasi onal l y one si de or t he ot her benef i t s by
shrewd negot i at i on, and obt ai ns ei t her i nexpensi ve bunkers or sel l s at a
good prof i t wi t h some t ri p chart ers of short durat i on, however, t hi s
syst em of t aki ng over and payi ng f or bunkers remai ni ng on board may
prove unnecessari l y cumbersome, and i t may be arranged t hat
chart erers suppl y suf f i ci ent bunkers f or the t ri p at t hei r own expense, or
t hat t hey pay an owner f or onl y t he est i mat ed quant i t y of bunkers
requi red f or t he t ri p out of t he t ot al remai ni ng on board. Bal ances i n one

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si de s f avour or t he ot her ar e set t l ed upon compl et i on of t he t i me
chart er i n t he f i nanci al reconci l i at i on.
The grade and qual i t y of bunkers suppl i ed t o a vessel has
devel oped dur i ng t he 1980 s i nt o a subj ect of cons i derabl e i mport ance.
The wordi ng of t he pri nt ed ASBATI EM does not ref l ect t hi s i mport ance,
however, rest r i ct i ng i t sel f t o j ust a bri ef ref erence i n t he pr eambl e, l i nes
15/ 18. Al most cert ai nl y an addi t i onal r i der cl ause wi l l be requi red, whi ch
cont ai ns a f ul l speci f i cat i on of t he qual i t y of bunkers t hat must be
suppl i ed t o a t i me chart ered vessel .
11. Hi re: (Cl auses 4, 5 and 29). Amount , when, were and t o whom hi re
i s payabl e, and arrangement s f or ot her payment s, l ess deduct i ons f or
i t ems such as port expenses and cash f or mast er. Agreement f or
procedure i n case of l at e payment of hi r e. (The subj ect of t i me chart er
hi re i s deal t wi t h at l engt h i n Lesson Fi ve).
12. Off-Hi re: (Cl ause 15). Provi si ons l eadi ng t o of f -hi re si t uat i ons eg
poor perf ormance; st ri ke of crew; dr ydocki ng; et c. and appropr i at e
deduct i ons f rom hi re payment s. (See al so Lesson Fi ve).
13. Vessel Performance: There i s no especi al st i pul at i on about vessel
perf ormance i n t he ASBATI ME whi ch, i n common wi t h most dry-cargo
cart ers penal i zes t hrough i t s of f hi re provi si ons (see Cl ause 15) f or
poor perf ormance but , i n cont rast t o t anker t i me chart erpart i es, does
not reward dr y-cargo owners i n t he event t hat t hei r vessel perf ormance
exceeds t he cont ract ual speed and/ or consumes l ess bunkers t han
speci f i ed. There i s a val i d case f or dry-cargo t i mechart erer s t o copy
t anker t radi t i ons and t o ent er i n t he chart erpart y a range of speeds and
consumpt i ons, say f rom 8 knot s up t o 15 knot s, i n bot h l aden and
bal l ast condi t i ons. I deal l y a mast er shoul d be gi ven speci f i c i nst ruct i ons
at t he commencement of each voyage l eg as t o a chart erer s
perf ormance requi rement s, and f ai l ur e t o perf orm as per chart er
commi t ment s shoul d be penal i zed whereas ext ra perf ormance shoul d be

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rewarded.
14. Vessel Mai ntenance: (Cl auses 20 & 21). The ASBATI ME rest ri ct s
i t s comment s t o drydocki ng and t o shi p s gear. Yet t here mi ght wel l be
addi t i onal ri der cl auses dependi ng on t he compl exi t y of t he shi p t ype
and/ or t rade i nvol ved eg a ref er or a l ogger. For t ri p chart ers i t i s
cust omar y t o del et e t he drydocki ng cl ause and repl ace i t by a si mpl e
st at ement such as no dr ydocki ng duri ng t hi s t i me chart er, except i n
cases of emergency .
15. Cargo Cl ai ms : For t hei r mut ual benef i t , i t i s i mport ant t hat t i me
chart erers and owners of t i me char t ered vessel s reach an
underst andi ng on how cargo cl ai ms (i f any) wi l l be handl ed, whi ch of
t he t wo i s t o handl e t hem, and under what aut hori t y. Cl ause 30 of t he
ASBATI ME set s out a ver y bri ef di vi si on of responsi bi l i t y but many t i me
chart erpart i es draf t a ri der cl ause i ncor porat i ng i nt o t he chart erpart y t he
det ai l ed NEW YORK PRODUCE EXCHANGE I NTER-CLUB
AGREEMENT. The l at est revi si on bei ng dat ed 1984. The pr ovi si ons of
t hi s document wi l l be consi dered i n reasonabl e det ai l i n Lesson Ei ght
and t he Agreement i t sel f wi l l be f ound under Appendi x 8 : 1 t o t hat
Lesson.
16. Master/Officers: (Clauses 8 & 9). The duties of a ships Master are
defined and it is spelt out that although a Master is owners legal servant he
must act under the orders of the charterers as f ar as the vessels employment
is concerned. It is frequently the case that a rider clause lists the duties
expected of a time chartered ships officers and crew, whereas Clause 9 i s a
uni versal cl ause gi vi ng t he chart er ers ri ght s shoul d t hey f eel t hat t he
Mast er and/ or hi s of f i cers are not car ryi ng out t hei r responsi bi l i t i es
t owards t he chart erers i n a reasonabl e manner.
17. Logbooks: (Cl ause 11). Anot her prot ect i on cl ause f or chart erer s
i nt erest s. I n f act , i t i s f requent l y t he case t hat chart erers add a c l ause,
or wordi ng t o t hi s cl ause, t hat t hey have t he r i ght t o check a vessel s

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perf ormance by ref erence t o a speci al i zed weat her -rout i ng company
eg Ocean rout es and i n t he event t hat t he l ogbooks and t he
i ndependent report s di sagree, t he i ndependent report s t ake procedure
over t he l ogbooks. Thi s i s i mport ant i n respect of of f -hi re cl ai ms and
vessel s perf ormance.
18. Supercargo/ Vi ctual l i ng: (Cl ause 10). Spel l s out chart erer s ri ght
t o appoi nt a super cargo and t he cost s of exerci si ng t hi s ri ght wi t h
regard t o meal s and accommodat i on. A r i ght not exerci sed ver y
f requent l y, but an i nval uabl e means not onl y of wat chi ng over a t i me
chart ered shi p s per f ormance, but of provi di ng t rai ni ng t o a chart erer s
personnel .
The second part of t he cl ause det ai l s wi t h meal s whi ch are t o be
provi ded by t he owners, and t he cost of these meal s.
19. Pol l uti on: (Cl ause 38). Many st at es are becomi ng ext remel y
consci ous of pol l ut i on of t hei r wat er ways and coast l i nes and merchant
shi p owners must ensure t hat t hei r vessel s compl y wi t h a host a
i nt ernat i onal and nat i onal l egi sl at i on i n connect i on wi t h t hi s subj ect . Not
onl y does t hi s af f ect t ankers. The cost of cl eani ng up and f i nes l evi ed
f ol l owi ng pol l ut i on can be consi derabl e, even i f caused by, say, a dr y -
cargo shi p s rupt ured bunker t anks. Cont ract s shoul d t heref ore speci f y
t he ri ght s and responsi bi l i t i es of t he part i es, as wel l as l i st i ng t he
cert i f i cat es t hat t he cont ract ed vessel i s expect ed t o carr y.
P & I Cl ubs pr ovi de i nsurance cover f or ent ered vessel s agai nst
oi l spi l l ages and resul t i ng f i nes and cl ean-up expenses. Cert ai n st at es,
however, may i nsi st t hat owners of al l vessel s cal l i ng at t hei r port s (dr y -
cargo as wel l as t anker shi ps) pr ovi de evi dence of f i nanci al
responsi bi l i t y f or pol l ut i on l i abi l i t y i n case of oi l spi l l age such
evi dence bei ng usual l y i n t he f orm of a cert i f i cat e of f i nanci al
responsi bi l i t y. Pot ent i al amount s demanded as i mmense sums of capi t al
agai nst rel at i vel y smal l r i sks of pol l ut i on. As a resul t , P & I Cl ubs do not

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encour age st at es t o i nsi st on t hei r own, i ndi vi dual demands f or secur i t y,
i nst ead provi di ng dry-cargo owners wi t h j ust t he Uni t ed St at es Federal
Wat er Pol l ut i on Cont rol Act Cert i f i cat e. Furt her P & I Cl ub assi st ance
wi t h cert i f i cat i on t o compl y wi t h any requi rement s of i ndi vi dual
government s i s not possi bl e. Consequent l y, owners shoul d not agree
t i me chart erpart y cl auses t hat provi de f or same.
20. Sal vage. (Cl ause 19). I t seems f ai r t hat expenses and rewards i n
cases of sal vage shoul d be shar ed, and t hi s i s normal pract i ce.

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21. Layi ng- up: (Cl ause 37). Unl i ke t anker t i me chart erpart i es i t i s onl y
rarel y t hat dr y-cargo owners and t i me chart erers consi der t he ri sks of a
vessel l ayi ng-up t hrough l ack of empl oyment . For a t ri p chart er t hi s i s,
of course, not necessar y, but f or l engt hy peri od empl oyment , t hi s
at t i t ude shoul d be caref ul l y reconsi der ed. What most dry-cargo t i me
chart erpart i es do i ncl ude, however, i s r ef erence t o what happens i f a
vessel i s det ai ned i n port f or peri ods i n excess of 30 days.
22. Arbi trati on: ( Cl ause 17). An essent i al part of any cont ract . The
ASBATI ME speci f i es New York, si nce t he chart erpart y i s draf t ed and
publ i shed by a body resi dent i n New York. Frequent l y, however, t hi s
cl ause i s ei t her del et ed and r epl aced by a r i der arbi t rat i on cl ause
speci f yi ng some ot her venue, or t he r ef erence t o New York i n t he
Cl ause wordi ng i s repl aced by, say, London .
23. Lien: (Clause 18). Just as an element of voyage charters, see above,
each partys right of lien must be considered and stipulated.
24. Assi gnment: ( Preambl e l i nes 31/ 33). Def i nes a chart erer s ri ght t o
sub-l et t he vessel t o ot her chart erers.
25. Exceptions: (Clause 16). Similar to the voyage charter clause.
26. Requi si ti oni ng: (Cl ause 33). Arrangement s i n t he event a vessel
be requi si t i oned by t he government of her f l ag st at e.
27. Bi l l s of Ladi ng: (Cl ause 8). Speci f i es t he manner i n whi ch bi l l s of
l adi ng are t o be dr awn up, t he si gni ng of same, and prot ect i on f or an
owner i n case of paper i nconsi st enci es.
28. Stevedore Damage : (Cl ause 35). Provi si ons f or not i f i cat i on of
st evedor e damages and repai rs.

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29. Commi ssi ons: (Cl auses 26 & 27). Speci f i es amount and t o whom
commi ssi ons and br okerages are payabl e.
30. Protecti ve Cl auses: You wi l l recogni se most of t he prot ect i ve
cl auses f rom t he above comment s under t he el emt ns of a voyage
chart erpart y, i ncl udi ng, Cl auses Par amount ; New Bot h t o Bl ame
Col l i si on; and t he New Jason. I t i s i mport ant , however, t hat onl y War
Cl auses desi gned f or t i me chart erpar t i es are used not voyage
cl auses. I n case of a maj or war bet ween t he so-cal l ed super -powers ,
or i nvol vi ng nat i ons connect ed i n some way wi t h t he chart erpart y, t he
cont ract may become nul l and voi d. Thus i s i t common pract i ce t o
i ncorporat e a cl ause t o t hi s ef f ect , l i st i ng t he nat i ons i nvol ved and
spel l i ng out t he r i ght s and r emedi es of the part i es i n t he event of such
war-l i ke act i vi t i es.
There i s al so prot ect i on f or an owner (see t he l ast paragraph of Cl ause
16) f or t he vessel t o have vari ous l i bet i es . As i n t he voyage
chart erpart y count er part , t he obj ect of a t i me chart er i ce cl ause shoul d
be t o prevent a Mast er bei ng l ef t wi t h no al t ernat i ve but t o pr oceed t o a
cont ract ual dest i nat i on i rrespect i ve of i ce condi t i ons. Cl ause 24
achi eves t hi s t o a cert ai n degree.
31. Si gnature: Not t o be f orgot t en
The Bareboat Charterpart y Bar eboat chart eri ng, or chart eri ng by
demi se as l awyers l ove t o cal l i t , i s t he cont ract i ng f or t he l ease of a
vessel , whereby t he owner chart ers away t he shi p t o anot her part y who,
i n t urn, assumes more t he rol e of owner t han chart erer, t he vessel
comi ng under t he compl et e cont rol of the bareboat chart erer, who has
t o suppl y ever yt hi ng i ncl udi ng Mast er, of f i cer and cr ew. The t rue owner
assi gns t o t he bareboat chart er er al l r esponsi bi l i t y f or operat i ng t he
vessel , and t hus ent i t l ement t o any prof i t s ( or l osses! ) t he shi p may
make, i n ret urn f or an agreed and regul ar payment of hi re. Nat ural l y,
such a met hod of peri od empl oyment i s desi gned f or years rat her t han

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f or mont hs, and bareboat i ng ser ves t he admi rabl e purpose of al l owi ng
persons who ar e not experi enced i n shi ppi ng t o i nvest i n a shi p wi t hout
t he responsi bi l i t y of organi zi ng i t s day t o day af f ai rs, at t he same t i me
permi t t i ng t hose wi t h exper i ence and an ent repreneuri al spi r i t t o
assume t he r ol e of an owner wi t hout t he necessi t y of rai si ng f i nanc e t o
purchase a vessel .
BI MCO desi gned t wo bareboat chart erpart i es i n t he 1970 s t o
meet i ncreased demand f or sui t abl y wor ded cont ract f orms; one
i nt ended f or t he bareboat i ng of exi st i ng vessel s ( wi t h or wi t hout
mort gages) t he BARECON A t he ot her f or newbui l di ngs f i nanced by
a mort gage t he BARECON B. Recent l y ref l ect i ng changes i n bareboat
pract i ce wi t h part i cul ar regard t o f l aggi ng out and t he regi st rat i on of
mort gages under of f -shore shi p regi st r i es, a BI MCO document ary sub-
commi t t ee desi gned a new bareboat chart erpart y, i ncorporat i ng t he
updat ed BARECON A and BARECON B provi si ons i nt o one f orm t he
BARECON 89 t oget her wi t h opt i onal sect i ons.
Al t hough a syst em of vessel empl oyment of whi ch i t i s i mport ant
t o have a general knowl edge, i t i s not essent i al i n a Course of t hi s
nat ure f or st udent s t o have as det ai l ed an under st andi ng as f or voyage
and t i me chart er i ng. Consequent l y, t he BARECON 89 chart erpart y t ext
i s i ncl uded under Appendi x 4. 6 t o t hi s l esson, and whi l st i t i s
recommended t hat t he largely self-explanatory clauses be studied, there is
not the need for analysis of the elements of a bareboat charterparty in the
same way as for voyage and time charterparties described above. However,
at this stage the students attention is drawn in particular to Clauses 6, 7 8
and 9 of the BARECON 89 in preparation for tackling the following self
assessment quest i ons.
Sel f Assessment Questi ons
1. What are t he essent i al di f f erences bet ween del i ver y and redel i ver y
sur veys f or Ti me Chart ers and Bareboat Chart ers?

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2. What was t he previ ous name f or t he ASBATI ME chart er part y?
3. To whom i s t he shi p s Mast er responsi bl e under a Ti me Chart er?
4. What name do l awyers use t o descr i be bareboat chart eri ng?).
Customary Termi nol ogy and Abbevi ati ons Commerci al shi ppi ng i s
awash wi t h t erms and abbr evi at i ons. On occasi ons, t he speed of
negot i at i ons i s such t hat much l abor i ous ef f ort can be saved by ut i l i zi ng
such a syst em but onl y i f bot h si des have t he same under st andi ng of
t he t erm of abbrevi at i on used. Some t er ms have al r eady been used and
expl ai ned i n t he Lesson t o dat e. Ot her s t hat are usef ul l y remembered
are : -
APS: Ari val Pi l ot Stati on: Si gni f i es a l ocat i on, on arri val at whi ch a
vessel wi l l del i ver on t o a t i me chart er. Of advant age t o a shi powner
when compared wi t h TI P, whi ch see.
BB: Bel ow Bri dges: I ndi cat es agreement f or a vessel t o proceed t o
t hat sect i on of a port or a ri ver/ canal t hat i s bel ow br i dges i n ot her
words bel ow t he pl ace(s) where hei ght rest ri ct i ons woul d prevent a
vessel navi gat i ng beneat h cert ai n overhead obst ruct i ons.
eg: Vessel t o di scharge at one saf e bert h Ri ver Thames, bel ow
bri dges .
Bal l ast Bonus : A Lumpsum amount pai d t o a shi powner, usual l y as a
reward (a bonus) f or posi t i oni ng hi s vessel at a cert ai n pl ace as a
prerequi si t e f or her del i ver y on t o t i me chart er eg. f or a shi p ex-
Medi t erranean Sea, del i ver y Uni t ed St at es Gul f f or a t i me chart er t ri p
t o t he Far Est at US$5, 000 dai l y, pl us a bal l ast bonus of US$100, 000 .
Occasi onal l y pai d as a reward f or accept i ng redel i ver y f rom t i me chart er
i n an unf avourabl e posi t i on.

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A Bal l ast Bonus may be net t (i . e. f ree of address commi ssi ons and
brokerages) or gross (i . e. subj ect t o deduct i on of brokerage and
address commi ssi on).
.
BBB: Before Breaki ng Bul k : Frei ght not t o be pai d unt i l af t er arri val at
t he di scharge port but bef ore commencement of unl oadi ng i . e. :
bef ore breaki ng bul k. (See Chapt er Si x).
BWAD Bracki sh Water Arri val Draft : Ref ers t o ei t her avai l abl e wat er
at a port or, more usual l y, t o a shi p s maxi mum draf t on arri val at a port
on t he basis of brackish water a mixture of saltwater and freshwater, such
as would be experienced in an esturial port eg : berths alongside the River
Cycle
C&F Cost and Frei ght Goods are t o be sol d on t he basi s t hat t he
sel l er arranges t hei r seabor ne t ransport at i on and del i ver t o t he buyer.
CD Customary Despatch: See CQD
Chart Dat um: Water l evel cal cul at ed on t he l owest t i de t hat can
concei vabl y occur, and used as a basi s f or i s known as t he Lowest
Ast ronomi c Ti de (LAT), and presupposes t hat , at t he ver y worst , t here
woul d al ways be t hat dept h of avai l abl e wat er at t hat part i cul ar spot .
CHOPOT Chart erer s Opti on: May r ef er, f or exampl e number of port s
eg up t o t hree port s Tai wan, i n chart erer s opt i on . Or perhaps rel at i ve
t o a cargo si ze mar gi n eg : 10, 000 t onnes, 5 per cent more or l ess
chopt . (See MOLCO).
CI F Cost, I nsurance and Frei ght : As f or C & F, except t he sel l er wi l l
al so i nsure t he goods.

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COA Contract of Af ffrei ghtment : See Lesson Three.
CQP Customary Quick Despatch: The vessel is to be loaded or discharged
as quickly as is customary and possible.
CVS Consecuti ve Voyages : A ser i es of Consecut i ve voyages, usual l y
l aden f rom Port A to Port B, ret urni ng i n bal l ast condi t i on, and so on
unt i l compl et i on of f i nal cargo di scharge.

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DFD Demurrage/ Free Despatch: An expressi on conf i rmi ng t hat a
shi powner may be ent i t l ed t o demurrage f or port del ay t o hi s vessel , but
t hat no di spat ch i s appl i cabl e i n case l ayt i me i s saved eg : $2000
Demurrage/ Free Despat ch . Common i n short -sea and ot her t rades
where t urn-r ound i n port i s speedy; f or exampl e, ro-ro vessel s.
DHD Demurrage/ Hal f Despatch: ore f requent l y encount ered t han DFD
i n deep-sea t rades, where di spat ch earned i s agreed t o be at hal f t he
dai l y rat e of demurrage.
DOP Droppi ng Out ward Pi l ot : Si gni f i es a poi nt of del i very ont o or
redel i ver y of f t i me chart er, f ol l owi ng a vessel s sai l i ng f rom a port .
DWAT Deadweight All Told : The total deadweight of a vessel at any time,
or estimated against a particular draft. Includes cargo, bunker s, constant
weights, et c.
DWCC Deadwei ght Cargo Capaci t y: An est i mat e of t he act ual cargo
i nt ake agai nst a part i cul ar draf t , al l owi ng f or bunkers, const ant wei ght s,
et c.
EI U Even i f Used: Si gni f i es t hat t i me spent on cargo worki ng i n
except ed per i ods eg : duri ng a hol i day wi l l not count as l ayt i me,
even i f used.
ETA Esti mated or Expected Ti me of Arri val
ETC Esti mated or Expected Ti me of Departure
ETS Esti mated or Expected Ti me of Sai l i ng
FAC Fast As Can: Anot her l ayt i me t erm, under whi ch t he shi p

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concerned i s t o l oad or di scharge i t sel f (eg: f or a sel f -di scharger ) as
f ast as i t can manage.
FAS Free Al ongsi de or Free Al ongi sde Shi p: Goods t o be brought
al ongsi de t he carr yi ng vessel at t he por t of l oadi ng, f ree of expense t o
t he carri er.
FCL Free Contai ner Load
FI O Free I n and Out : Cargo t o be l oaded and di scharged f ree of
expense t o t he carr i er.
FI OS Free I n, Out and Stowed: Car go t o be l oaded, st owed and
di scharged f ree of expense t o t he carr i er f or bul k commodi t i es.
FI OST Free I n, Out, Stowed and Tri mmed: Cert ai n Commodi t i es
requi re bot h st owi ng and t ri mmi ng e g scrap i n bul k. Thi s t erm
ensures t hat none of t he l oadi ng, di schargi ng st owi ng or t ri mmi ng
expenses wi l l be f or t he account of t he carri er. For si mi l ar t erms f or
some goods, t rader s must be even more expl i ci t . For exampl e, wi t h
mot or cars, equi val ent t erms woul d be used so as t o read: - f ree i n, out ,
l ashed, secured and unl ashed .
FI OST Free I n, Out and Spout Tri mmed. Free-runni ng cargo eg. :
bul k grai ns t o be l oaded, spout -t ri mmed and di scharged, f ree of
expense t o t he carr i er.
FHEX Fri days and Hol i days Excepted: Layt i me wi l l not court duri ng
Fri days and Hol i days.
FHI NCFri days and Hol i days Excepted : Layt i me wi l l not court dur i ng
Fri days and Hol i days.
FHI NC Fridays and Holidays Included: Opposite to FHEX. Laytime counts

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during Fridays and Holidays, which are to be considered as working days.
FOB Free on Board: Cargo t o be del i ver ed on board f ree of cost t o
ei t her t he buyer or carri er.
FOQ Free on Quay: Cargo t o be del i ver ed on t he quay, f ree of expense
t o t he buyer or t o t he carri er.
FOW Free on Wharf : Si mi l ar t o FOQ or Free Open Water Ref ers t o t he
earl i est possi bl e resumpt i on of t rade t o an i ce-bound port or area eg :
t o l oad FOW! Churchi l l , Hudson Bay.
FP Free of Prati que: See Lesson Si x
FWD Fresh Wat er Arri val Draft : See BWAD. Rel evant t o t radi ng i n
f reshwat er ar eas, such as prevai l s i n t he Panama Canal .
Gross Terms: Under whi ch t he carri er has t o arrange and pay f or
cargo-handl i ng, al t hough l ayt i me wi l l pr obabl y appl y. The opposi t e t o
Net Terms.
HAT Hi ghest Astronomi c Ti de: The opposi t e t o Lowest Ast ronomi c
Ti de See Chart Dat um.
HWOST Hi gh Water on Ordi nary Spri ng Ti des: The opposi t e t o Low
Wat e on Ordi anr y Spri ng Ti des whi ch see.
I WL I nsti tute Warrant y Li mi ts: Geographi cal l i mi t at i ons t o permi t t ed
t radi ng areas, drawn up and i mposed by under wr i t ers, and commonl y
appl i ed t hr oughout t he mari t i me wor l d. Owners wi shi ng t hei r shi p t o
proceed out si de t hese l i mi t s (e g : t o t he Great Lakes at any t i me of t he
year ; or t o t he Nort hern Bal t i c Sea i n Wi nt er) must usual l y obt ai n
permi ssi on f rom t hei r under wri t er s t o hol d covered t hei r vessel agai nst
payment of an addi t i onal premi um.

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LAT Lowest Astronomi c Ti de: See Chart Dat um
L/ C Letter of Credi t : See Lesson Three or Laydays/ Cancel l i ng : A
spread of dat es eg: Laydays 1
st
Sept ember/ Cancel l i ng 15
t h

Sept ember bet ween whi ch dat es a vessel hi s t o pr esent f or l oadi ng.
Too earl y and she wi l l probabl y have t o wai t . Too l at e and she ri sks
bei ng cancel l ed by t he chart erers.
LCL Less than Ful l Contai ner Load
Li ner Gross Terms (Has Lay Ti me)
TermsThe responsi bi l i t y and cost of l oadi ng, carr yi ng and di schargi ng
cargo i s t hat of t he carri er, f rom t he moment t he goods are pl aced
al ongsi de t he carr yi ng vessel i n readi ness f or l oadi ng, unt i l di scharged
al ongsi de at t hei r dest i nt at i on. Ti me spent cargo-handl i ng i s al so at t he
carri er s ri sk.
LO/ LO Li ft on/ Li ft off : A t erm descr i bi ng t he met hod of l oadi ng and
di schargi ng cargo by shi p or sore gear.
LT Long Ton: A t on of 2240 pounds, equi val ent t o 1. 016 met r i c t ones.
EWOST Low Water on Ordi nary Spri ng Ti des : A measure of wat er
dept h at t he l ow mat t er mark on Ordi nar y (i e. : not except i onal ) Spri ng
t i des see Chart Dat um and MLWS.
MHWS Mean Hi gh Water Spri ng
MLWN Mean Low Water Spri ng : Average dept h of wat er avai l abl e at
t he t i mes of l ow and of hi gh t i des duri ng peri ods of Spri ng t i des. Some
chart s are cal cul at ed agai nst t hese averages rat her t han based on

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chart dat um.
MHWN Mean Hi gh Water Neaps
MLWN Mean Low Water Neaps Average dept h of wat er avai l abl e at t he
t i mes of l ow and hi gh t i des duri ng peri od of Neap Ti des.

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Mi n/ Max Mi ni mum/ Maxi mum: Ref ers t o a f i xed cargo si ze e. g 10, 000
t onnes mi n/ max .
MOLMore or l ess : Ref ers t o a cargo si ze opt i on say, 10, 000 t onnes,
5 per cent more or l ess usual l y cl ar i f yi ng whose opt i on t o sel ect t he
f i nal cargo si ze
MOLCO More or Less Charterer s Opti on,
MOLCO More or Less Owner s Opti on
MT Metri c Tonne : A t onne of 2, 204 pounds or 1, 000 ki l ograms,
equi val ent t o 0. 9842 l ong t ons.
NAABSA Not Al ways Afl oat But Saf el y Aground: Most owners wi l l
agree onl y t hat t hei r (especi al l y deep- sea vessel s) proceed onl y t o
port s where t here i s suf f i ci ent wat er t o remai n al ways af l oat , so as t o
avoi d t he ri sk of hul l damage. There are areas and port s, however,
where wat er dept h i s rest ri ct ed but , t he bot t om bei ng sof t mud, i t i s
cust omar y f or shi ps t o saf el y l i e on t he bot t om at cert ai n st at es of t he
t i de. Ri ver Pl at e. I n such a case, owners wi l l probabl y agree t o proceed
NAABSA.
Neap Ti des The opposi t e t o Spri ng Ti des ( whi ch see) . Neap Ti des occur
when t i dal range i s at i t s l owest i n ot her words duri ng peri ods of
rel at i vel y l ow hi gh t i des, and of rel at i vel y hi gh l ow t i des. A vessel t hat
i s prevent ed f rom bert hi ng of f rom sai l i ng wi t h a f ul l cargo or, i n deed,
i s t rapped i n a ber t h by t he onset of neap t i des, i s sai d t o have been
neaped .

Nett Terms Opposi t e t o Gross Terms. Cargo-handl i ng i s t he
responsi bi l i t y and f or t he account of t he chart erer or t he cargo sel l er.
NOR Noti ce of Readi ness : See Lesson Si x.

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PPT Prompt: I ndi cat es t hat a cargo or a shi p i s avai l abl e prompt l y.
ROB Remai ni ng on Board: Ref ers t o cargo, bunkers or f reshwat er
remai ni ng on boad a si p at any part i cul ar t i me.
RO/ RO Rol l On/ Rol Off : A t erm i ndi cat i ng t hat cargo i s t o be dri ven on
at t he l oadi ng port and dr i ven of f upon di scharge eg : a car carri er.
Al so used t o descri be a t ype of vessel speci al i zi ng i n such t rades (See
Lesson One)
SA Safe Anchorage
SB Safe Bert h
SHEX Sundays and Hol i days Excepted : Means t hat l ayt i me wi l l not
count dur i ng Sundays or Hol i days.
SHI NC Sundays and Hol i days I ncl uded: Opposi t e t o SHEX. Layt i me
count s dur i ng Sundays and Hol i days, whi ch are consi dered t o be normal
worki ng days.
Sous Pal an Under hook cargo wi l l be brought al ongsi de t he carr yi ng
vessel i . e. : under her hooks f ree of expense t o t he car go buyer or
t he carri er.

SRSpot The hei ght of a t i de var i es ( bei ng i nf l uenced by t he phases of
t he moon). Approxi mat el y t wi ce a mont h, t i dal l evel s at t ai n t hei r hi ghest
hi gh wat er and l owest l ow wat er marks, bei ng t ermed Spri ng i des. The
di f f erence bet ween hi gh and l ow wat er i s cal l ed t he t i dal range and t hi s
range i s t heref ore at i t s great est duri ng spri ng t i de peri ods. Because of
great er avai l abl e r af t s dur i ng spr i ng t i de per i ods, when shi ps can ent er
and l eave around t he hi gh wat er t i me more deepl y l aden t han ot her wi se,
some port s experi ence a f ar great er vol ume of t raf f i c t han normal , bei ng

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t ermed Spr i ng Ti de Port s. An exampl e i s Gool e, on t he Ri ver Ouse, i n
Nort h-East ern Engl and (See Neap Ti des) .

Stem Refers to the readiness of cargo and is vessel eg : subject stem (i.e.
subject to the cargo availability on the required dates of shipment being
conf i rmed).
SWLSaf e Worki ng Load: Ref ers t o l i f t i ng capaci t i es of cranes or
derri cks.
SWAD Sal t Water Arri val Draft : As f or bracki sh Wat er (whi ch see),
except t hat t he prevai l i ng wat er i s sal i ne.
T/ C Ti me Charter
TI P Taki ng I nward Pi l ot: Si gni f i es a l ocat i on on arri val at whi ch (but
onl y upon t aki ng abroad t he pi l ot a shi p del i vers on t o her t i me chart er.
Of advant age t o a t i me char t erer when compared wi t h APS ( whi ch see)
as, i n t he event of a suspensi on of t he pi l ot age ser vi ce, or of l at e
boardi ng by a pi l ot , t he ri sk and expense of del ay i s t hat of t he
shi powner.
WI BON Whether I n Berth Or Not : See Lesson Si x
WP Wei ght or Measure : The met hod on whi ch l i ner car go may be
charged.
WP Weather Permi tti ng : See Lesson Si x
WW Weather Worki ng : See Lesson Si x

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WW Ready When and Where Ready: Ref ers t o a ready posi t i on where
a vessel wi l l be handed over t o buyers or wi l l be del i ver ed on
t o/ redel i vered of f t i me chart er.

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APPENDI X 4: 1
DRY CARGO CHARTERPARTI ES OF MAJOR I MPORTANCE

1. Voyage Forms General Purpose

Title Date Codename PUBLISHER
Uniform General As revised 1922
1966 layout)
GENCON BIMCO
Uniform General
(Box Type)
As revised 1922
(1974 layout 1982
(Revised 1986).
GENCON

MULTIFORM
BIMCO

FONASBA
Grain
Approved Baltimore Berth
Grain C/P Steamer
North American Grain
1913
(adapted 1971)
1973
BALTIMORE
FORM C
NORGRAIN

ASBA
Grain Voyage (amended 1998)
1966
(revised 1974)

GRAINVOY

Continent Grain 1957
(amended 1974)
SYNACOMEX Syndicate
National
Commerce
Extericurdes
Cereales
Australian Wheat 1983 AUSTWHEAT Australian
Wheat Board
Australian Barley 1975
(revised 1980)
AUSBAR Australian
Barley Board
River Plate 1914 CENTROCON UK Chamber of
Shipping
Fertilizer
Fertilizers Charter
1942
(amended 1950)

FERTICON
UK Chamber
of Shipping
North American Fertiliser 1978 FERTIVOY Canpotex
shipping
Services

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Vancouver
Phosphate C/P 1950 AFRICANPHOS
Coal :
South African Anthracite
1974 SAFANCHART
No.2
S.African
Anthracite
Producers
Assn.
Johannesburg
Americanised Welsh Coal 1953
(amended 1979)
AMWELSH ASBA
Australian Coal Charter AUSCOAL
Ore :
Mediterranean Iron Ore
Iron Ore

C (ORE) 7
NIPPONORE

The Japan Shg
Exchange Inc.
Standard Ore 1980 OREVOY BIMCO
Sugar
Sugar C/P

1969
(revised 1977)

-

Bulk Sugar Charter USA 1962
(revised 1968)

-

Cuban Sugar
Australia / Japan Bulk
Raw Sugar
1973
1975
CUBASUGAR
-

Fiji Sugar 1977 -
Mauritius bulk Suga - MSS Form
Timber
Baltic Wood

1964

NUBALTWOOD
UK Chamber
of Shipping The
Japan Shg
Exchange Inc.
2. Period Forms
Timecharter
Uniform Time Charter

1939
(amended 1950)
BALTIME BIMCO
Uniform Time charter 1968 LINERTIME BIMCO
Uniform Time charter
(Box type)
1968
(1974 layout)
-
New York Produce
Exchange T/C
1913
(amended 1946)
NYPE ASBA
New York Produce
Exchange T/C
1981 ASBATIME ASBA
Bareboat :
Standard Bareboat Charter

1989

BARECON

BIMCO

Cargoes You shoul d by t hi s st age have read Chapt er s 5 and 6 of
CARGOES Agri cul t ur al Pr oduct s and Ti mber. Consequent l y you shoul d
be i n a posi t i on t o t ackl e t he f ol l owi ng Sel f Assessment Quest i on: -

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1. What process woul d be of pri me i mport ance i n t he t reat ment of
copra bef ore shi pment ?
2. What are t he maj or bul k raw sugar export i ng areas of t he I ndi an
Ocean?
3. What shi pboard equi pment i s essent i al f or t he carri age of cof f ee?
4. What f i t t i ngs shoul d a l ogger have?
5. What i s t he st owage f act or of woodchi ps?
Test Questi ons
1. Li st t he el ement s you consi der shoul d be i ncl uded i n a l i ght eni ng
cl ause f or a voyage chart erpart y, t hen draf t a sui t abl e cl ause t o cover
t he shi powner s i nt erest s i n t he event of SKUA A, a handy-si zed
bul kcarri er, bei ng or dered t o t he Bay of Bengal , where she wi l l have t o
l i ght en bef ore reachi ng her di schargi ng bert h i n Chi t t agong.
2. Assume t hat i t i s your responsi bi l i t y t o gi ve i nst ruct i ons t o t he Mast er
of a shi p whi ch has j ust been chart ered. You wi l l arrange f or a copy of
t he chart erpart y t o awai t hi m on ar ri val at l oadi ng port . What
i nf ormat i on do you consi der you must gi ve hi m by radi o bef ore he get s
t here?
(NB : To mai nt ai n schedul e of f i ni shi ng CARGOES more or l ess
si mul t aneousl y wi t h t he compl et i on of t hi s Course, you shoul d by now
have r ead Chapt er 5 Agri cul t ural Product s and Chapt er 6
Ti mber)


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CHAPTER- 5
FI NANCI AL ELEMENTS OF CHARTER PARTI ES
I ntroducti on The whol e purpose of shi powners arrangi ng t o carry
goods i n t hei r vessel (s) i s t o ear suf f i ci ent i ncome t o operat e t hei r
ent erpr i ses successf ul l y and, hopef ul l y, t o make a prof i t . Chart erers, on
t he ot her hand, ar e anxi ous t o move t hei r cargoes at t he l owest
possi bl e uni t pr i ce commensurat e al ways wi t h saf e del i ver y. I t f ol l ows,
t heref ore, t hat cl ose at t ent i on must be made i n al l shi ppi ng cont ract s,
not onl y t o t he amount of i ncome i nvol ved and t o i t s cal cul at i on, but
al so t o t he met hods and t i mes of payment , and t o t he vari ous ri sks of
t he part i es i nvol ved.
For voyage chart er i ng, i ncome wi l l resul t f rom f rei ght s, deadf reght s and
f rom t he cal cul at 8i on of l ayt i me, whi l st f or t i me chart eri ng; i ncome wi l l
resul t f rom payment of hi re. I n each case, however, t here are var i ous
addi t i ons and deduct i ons one needs t o t ake i nt o consi derat i on t o
achi eve an accurat e cal cul at i on of i ncome and, i n t hi s Lesson; we wi l l
be exami ni ng t hese aspect s i n some det ai l .
Voyage Charteri ng
Currency : I n most cases, f rei ght s are pai d i n Uni t ed St at es dol l ars
currency of i nt ernat i onal shi ppi ng but t hi s i s not al ways t he case,
part i cul arl y f or shor t -sea and coast al shi ppi ng where l ocal currenci es
appl i cabl e t o t he t rade are f requent l y used.
Ri sk of l oss of Frei ght : Usual l y t he occasi on on whi ch f rei ght i s
deemed t o be earned i s speci f i ed i n t he cont ract of carri age, ot her wi se
i t i s l egal l y const rued as a rewar d payabl e upon arri val of t he goods at
t hei r dest i nat i on, r eady t o be del i ver ed i n merchant abl e condi t i on .
Frei ght woul d t hen be payabl e concurrent wi t h del i ver y of t he goods at
t he di scharge port (s), and a consi gnee woul d not normal l y be ent i t l ed t o

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t ake del i ver y of t he goods unt i l t he f rei ght had been t endered. I t f ol l ows
t hat , unl ess ot her wi se speci f i cal l y agreed, t he ri sk of l osi ng t he f rei ght
bef ore saf e del i ver y of t he cargo f al l s upon t he carr i er or shi powner.
The part y at ri sk shoul d t heref ore prudent l y seek cover agai nst pot ent i al
l oss of cargo (and t heref ore of f rei ght ent i t l ement ) f rom t he i nsurance
market , where f rei ght i nsurance i s nor mal l y avai l abl e at a modest
premi um, adj ust ed by t he ri sks i nvol ved such as age of shi p, durat i on of
voyage, et c. Frequent l y, however, shi powners negot i at e t hat f rei ght
deemed earned upon l oadi ng , i n whi ch case t he ri sk of l osi ng t he
cargo and bei ng l i abl e t o pay f rei ght (even wi t hout recei vi ng t he goods)
becomes t hat of t he chart erer, who i s l ef t t o make appropr i at e
i nsurance arrangement s i nst ead of t he shi powner.
Thi s ri sk of l oss of f rei ght i s i ndependent of when f rei ght i s
physi cal l y pai d. Thus, even i f f rei ght i s pai d i n accor dance wi t h a
chart erpart y t erm st at i ng t hat f rei ght t o be pai d wi t hi n seven days af t er
si gni ng and rel easi ng bi l l s of l adi ng , i n t he event of a t ot al l oss of shi p
and cargo, say f i f t een days i nt o t he voyage, f rei ght mi ght have t o be
ret urned t o chart erer s i f t he ri sk of l oss was deemed t o be t he carri ers.
As a resul t of t hi s, i n t he ri ght pl ace. I t i s usual f or f rei ght and hi r es t o
be pai d by means of a t ransf er of f unds f rom t he chart erer s bank t o t he
owner s. Even t hi s can t ake t i me and so i t i s i mport ant f or the chart er
part y t o st at e where as wel l as when t he f unds have t o be credi t ed t o
t he shi powner s bank account . Many chart erpart i es l eave i t t o t he
cont ract i ng part i es t o i ncorporat e t he ar rangement s t hey requi re, eg :
t he AMWELSH Cl ause 2 (gv), but ot hers demand more speci f i c
i nf ormat i on, eg t he OREVOY Box 29.
When Frei ght payabl e : Voyage f rei ght may be payabl e i n advance
eg f ul l y pr epai d or upon reachi ng i t s dest i nat i on eg upon ri ght and
t rue del i ver y . I t may al so be pai d at some t i me duri ng a vessel s
voyage eg wi t hi n seven banki ng days of si gni ng and rel easi ng bi l l s of
l adi ng , or at t he dest i nat i on but pri or t o di scharge eg bef ore
breaki ng bul k (abbrevi at ed as bbb i n negot i at i ons).

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Voyage f rei ght i s al so f requent l y pai d i n st ages. I t i s commonpl ace
f or a maj ori t y of t he f rei ght say 90% t o be pai d duri ng a voyage, wi t h
t he bal ance wi t hi n a set peri od af t er di scharge has been compl et ed,
t oget her wi t h adj ust ment f or demurrage or di spat ch owed by one part y
or t he ot her. For exampl e : Ni net y percent of f rei ght t o be pai d wi t hi n
f i ve banki ng days of si gni ng and rel easi ng bi l l s of l adi ng marked
f rei ght payabl e as per char t erpart y bal ance t o be pai d wi t hi n one
mont h of compl et i on of di scharge, dul y adj ust ed f or l ayt i me used duri ng
l oadi ng and di schar gi ng operat i ons . (Wi t h ref erence t o Layt i me i n t he
above paragraph, st udent s shoul d not e t hat t hi s i mport ant subj ect wi l l
be exami ned i n det ai l i n Lesson Si x).
How Frei ght i s cal cul ated: Frei ght s are pai d usual l y agai nst t he
quant i t y of cargo l oaded of t en on a t onnage basi s, but occasi onal l y i n
accordance wi t h cargo vol ume or shi p capaci t y. Thus f rei ght f or a bul k
cargo eg coal wi l l ver y l i kel y be pai d at a rat e of US$ per l ong t on
or per met ri c t onne (see AMWELSH, l i nes 15/ 16). I t i s i mport at ,
however, t o speci f y how t he cargo quant i t y i s t o be est abl i shed. Of t en
t hi s wi l l be achi eved by shore measur ement , f rom whi c h a bi l l of
l adi ng wei ght i s obt ai ned, and on whi ch f rei ght i s based. Somet i mes,
t hough, shore i nst rument s are suspect perhaps non-exi st ent and
cargo/ bi l l of l adi ng t onnage i nt aken wei ght i s cal cul at ed by means
of shi p s dr af t survey . I n some t rades t here may be a di screpancy
bet ween shore cargo f i gures and cargo i nt aken quant i t y est i mat i on as
assessed by shi p s draf t survey. Provi ded such di scr epancy i s of
rel at i vel y mi nor proport i ons, t he pr obl em may not be seri ous but , gi ven
t he hi gh val ue of cert ai n commodi t i es, a subst ant i al di f f erence bet ween
t hese t wo set s of f i gures cal l s f or i mmedi at e and cl oser i nvest i gat i on.
On some occasi ons, f rei ght i s t o be assessed on cargo out t urn
quant i t y at t he port (s) of di scharge and agai n, t hi s quant i t y may be
cal cul at ed by means of shore gauges or by shi p s draf t survey. Where
draf t sur veys are i nvol ed, of t en a chart erpart y wi l l i ncl ude a cl ause
speci f yi ng t hat t he surveyor wi l l be i ndependent and al so t hat t he shi p s

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of f i cers are t o provi de ever y assi st ance t o t he surveyor t o t he ext ent of
provi di ng shi p s pl ans and ref rai ni ng f rom pumpi ng wat er or bunkers
duri ng t he sur vey i t sel f . I n cert ai n t rades eg f or i ron or e where
cargo i s l i abl e t o suf f er f rom wei ght l oss (due pr i nci pal i t y t o t he
evapor at i on of moi st ure) dur i ng t ransi t , i t i s common t o gi ve chart erers
t he opt i on t o abi de by l oaded f i gures on whi ch t o base f rei ght
cal cul at i ons, or t o wei gh t he cargo upon i t s di scharge. S a f urt her
al t ernat i ve, a chart erer may negot i at e t he ri ght t o deduct f r om f rei ght a
percent age of f t he bi l l of l adi ng wei ght obt ai ned at t he l oadi ng port
say 0. 5% - i n l i eu of wei ghi ng cargo upon di scharge. I n most t rades
t hi s i s now an opt i on whi ch i s r arel y exerci sed but t he cl ause sur vi ves
and so t he 0. 5% becomes j ust anot her pi cki ng .
Cargo Si ze Occasi onal l y a shi powner undert akes t o carr y an exact
cargo si ze eg 40, 000 t onnes mi ni mum / maxi mum coal i n bul k,
st owi ng around 47 cubi c f eet per t onne but of t en a margi n i s
negot i at ed t o enabl e a mast er t o maxi mi ze hi s shi p s l i f t i ng (whi ch wi l l
var y dependi ng upon t he quant i t y of bunkers she has on board) eg
40, 000 t onnes coal i n bul k, 5% more or l ess i n owner s opt i ons . I t may
be t hat t hi s margi n i s at Chart erer s opt i on al t hough such an
arrangement precl udes t he cert ai nt y t hat t he vessel s mast er can
maxi mi ze hi s cargo l i f t i ng, and means t hat t he owner must est i mat e on
t he mi ni mum cargo quant i t y when cal cul at i ng t he vi abi l i t y of such a
prospect i ve f ut ure. Where a shi powner cont ract s t o l oad or a chart erer
t o provi de about a cert ai n quant i t y eg about 10, 000 met ri c t ones
bagged f i shmeal t he word about i s const rued t o mean wi t hi n, say, a
reasonabl e margi n of (say) 5%; i n ot her words, bet ween 9, 500 and
10, 500 t onnes.
However where t he word about i s repl aced by wi t hout guarant ee
i t means j ust t hat . There i s no guarant ee and t he cargo can l egal l y be
of any si ze. Occasi onal l y a st at ed margi n i s agreed eg. 30/ 32, 000
t onnes . Here i t i s underst ood t hat t he cargo t o be l oaded and/ or
suppl i ed wi l l be bet ween 30, 000 and 32, 000 t onnes of cargo and, t o

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make mat t es absol ut el y cl ear, t he words mi ni mum/ maxi mum or si mi l ar
mi ght be added eg wi t hi n 30/ 32, 000 t onnes mi n/ max whi l st t he
addi t i onal phrase i n owners/ shi ppers opt i on def i nes whose ri ght i t i s
t o deci de upon t he exact cargo quant i t y wi t hi n t he agreed l i mi t at i ons.
Al t ernati ve means of Cal cul ati ng Frei ght On ot her occasi ons,
however, t he l i kel y l oaded commodi t y may be di f f i cul t t o cal cul at e i n
advance. I n such event s, t here are al t er nat i ves open t o t he negot i at i ng
part i es: -
1. The onus can be shi f t ed f rom t he shi powner t o t he chart erer and
f rei ght pai d on a l umpsum basi s . Here i t i s up t o t he chart erer t o see
t hat t he maxi mum cargo i s l oaded i n hi s own i nt erest consi st ent
al ways wi t h t he vessel s maxi mum permi t t ed draf t and her saf et y. There
i s, of course, no f i nanci al advant age t o t he shi powner f rom maxi mi ssi ng
cargo i nt ake i n t hi s case.
2. Where t he cargo consi st s of awkward shapes and si zes eg general
cargo or where i t i s uncert ai n j ust what can be f i t t ed i nt o a shi p s
var i ous shaped cargo compart ment s f or a uni f orm st yl e commodi t y
eg packaged l umber al t ernat i ve i s f or f rei ght t o be cal cul at ed on
ei t her t he avai l abl e cubi c capaci t y of the shi p s cargo compart ment s,
or on t he cubi c quant i t y of cargo l oaded .
Deadfrei ght Shoul d a chart erer/ shi pper f ai l t o provi de a f ul l cargo i n
accordance wi t h t hat descri bed i n t he cont ract of carri age, a shi powner
can cl ai m deadf rei ght whi ch i s a f orm of damages bei ng comput ed on
t he basi s of l oss of f rei ght , l ess any expenses whi ch woul d have been
i ncurred i n ear ni ng i t eg st evedores cost s and l ess any advant age
t aken by t he owner f rom t he deadwei ght unexpect edl y avai l abl e eg
ext ra bunkers. Deadf rei ght i s added t o f rei ght earned and, l i kewi se, i s
usual l y l i abl e t o appr opri at e commi ssi ons and brokerages.
Frei ght Taxes The aut hor i t i es of some (pri nci pal l y devel opi ng) nat i ons

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l wevy t axes upon f rei ght deemed earned on out bound cargoes (and a
f ew on i nbound cargoes as wel l ). I t i s t he reci pi ent of t he f r ei ght who i s
l i abl e t o pay t hi s t ax, not t he part y payi ng same, and t heref ore t hi s
charge i s f requent l y l evi ed agai nst t he shi powner, bei ng usual l y added
t o port di sbursement s i ncurred by t he vessel concer ned, and t hus
col l ect ed vi a t he of f i ces of t he port agent .
Consequent l y, appr opri at e al l owance f or f rei ght t ax must be made
i n voyage est i mat es and subsequent l y i n f rei ght rat es negot i at ed by
shi powners. Furt her more, ment i on of any f rei ght t axes shoul d be made
i n chart erpart i es and cont ract s, cl earl y speci f yi ng whi ch of t he
cont ract i ng part i es i s ul t i mat el y responsi bl e f or payment of such
charges, as, even t hough i n t he f i rst i nst ance t he reci pi ent of f rei ght i s
l i abl e f or payment of t axes, i t may be negot i at ed t hat a shi pper or
chart erer i s ul t i mat el y r esponsi bl e and must i n due course rei mburse a
carri er f or expendi t ure so i ncurred.
Some government s whi ch i mpose t axes on f rei ght negot i at e
bi l at eral agreement s wi t h ot her government s under whi ch shi ps
regi st ered i n cert ai n nat i ons are exempt or part i al l y exempt f rom such
charges, and i t behoves al l concer ned i n negot i at i ng ocean voyages t o
check caref ul l y f i rst whet her f rei ght t axes are l i kel y t o be l evi es and,
secondl y, whi ch nat i on s shi ps, i f any, ar e exempt . Thi s can be cl ar i f i ed
vi a t he good of f i cers of an agent i n t he port (s) i nvol ved or perhaps more
si mpl y i n BI MCO s Frei ght Tax bookl et , al t hough, bei ng an annual
publ i cat i on, t hi s may be sl i ght l y out -of -dat e f or t he part i cul ar case
under revi ew.
I t i s essent i al t o cl ar i f y t he exact ci rcumst ances under whi ch
vessel s wi l l be exempt f rom f rei ght t ax. I t may be t hat Greek f l ag shi ps,
f or exampl e, ar e exempt under one part i cul ar nat i on s r egul at i ons,
provi di ng onl y t hat t he f rei ght benef i ci ary resi des i n Greece. Thus a
Greek f l ag shi p owned ost ensi bl y by a Li beri an corpor at i on (even
t hough t he shares i n t hat corporat i on are hel d by Greek nat i onal s)

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woul d not qual i f y f or exempt i on; wher eas i f t he vessel was t i me
chart ered t o a Greek resi dent , i ndi vi dual or corpor at i on f or t he voyage
i n quest i on, as di sponent owner t hat resi dent or corporat i on mi ght ver y
wel l qual i f y f or exempt i on.
Bi l l s of Ladi ng: These document s wi l l be exami ned i n Lesson Ei ght .
However, ment i on shoul d be made of t he cl ausi ng of bi l l s of l adi ng i n
rel at i on t o f rei ght s. Somet i mes l et t ers of credi t bet ween t he sel l er and
buyer of a cargo st i pul at e t hat bills of lading are to be claused freight
prepaid, and a buyer is then entitled to assume that freight has indeed been
paid when the bills eventually come into his possession. It can, in fact, be
tantamount to fraud to reach an alternative agreement between seller and
shipowner/carrier and mark bills of lading freight prepaid where none, or
only partial freight has been pai d.
Not onl y t hat , i f a shi powner rel eases bi l l s marked f rei ght
prepai d bef ore recei vi ng any or al l f rei ght , t hat shi powner i s i n ef f ect
admi t t i ng recei pt of al l f rei ght and may f i nd ext reme di f f i cul t y i n
obt ai ni ng any bal ance, whi l st bei ng obl i ged t o del i ver t he car go i n f ul l t o
t he recei ver/ hol der of t he bi l l s. There can be no obj ect i on t o causi ng of
bi l l s such as f rei ght payabl e as per char t erpart y , and i t i s surel y bet t er
f or a shi powner or hi s port agent t o ret ai n bi l l s of l adi ng marked f rei ght
prepai d unt i l t he f rei ght i s act ual l y recei ved.
Al t hough, as we have seen f rom Lesson Four, most voyage
chart erpart i es gi ve a shi powner/ carri er a l i en on t he cargo f or non-
payment of f rei ght and deadf rei ght (see cl ause 24 of t he MULTI FORM),
t hi s wi l l not appl y i f t he shi powner has r el eased f rei ght prepai d bi l l s of
l adi ng. Somet i mes chart erers of f er t o i ssue a Let t er of i ndemni t y ,
i ndemni f yi ng shi powners f or i ssui ng f rei ght prepai d bi l l s wi t hout
physi cal recei pt of t he f rei ght . Dependi ng on t hei r t rust of t he chart erer,
some shi powners accept such a l et t er, but wi se ones demand t hat i t i s
count ersi gned by a f i rst cl ass bank.

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Commi ssi ons and Brokerages A shi pbroker s i ncome f rom voyage
chart eri ng i s based on a percent age of t he gross f rei ght payabl e t o a
shi powner, and t hi s i ncome i s payabl e by t hat shi powner t o al l t he
brokers i nvol ved i n t he f i xt ure. I n addi t i on, each shi pbroker may be
ent i t l ed t o an equi val ent , percent age of t he gross amount of any
deadf rei ght al t hough, si nce deadf rei ght i s, i n f act payment by a
chart erer of damages f or f ai l i ng t o pr oduce an ent i re, cont ract ed cargo
and not st r i ct l y a f rei ght ent i t l ement by t he shi powner, a shi pbroker s
ri ght t o recei ve i ncome based on deadf rei ght must be speci f i cal l y
recorded i n a chart erpart y. I t i s al so nor mal pract i ce f or shi pbrokers t o
be ent i t l ed t o r eceve i ncome i n t he f orm of a percent age of any
demurrage t hat mi ght accrue af t er t he cal cul at i on of l ayt i me, al t hough
t hi s t oo has speci f i cal l y t o be recorded.
A shi pbroker s i ncome i s usual l y t ermed brokerage t o di st i ngui sh
i t f rom commi ssi on or addr ess commi ssi on used t o descr i be a
chart erer s negot i at ed ent i t l ement t o a di scount on freight payment,
ostensibly to cover expenses incurred as a result of employing tonnage to
carry the goods. In fact the practice of deducting address commission from
freight, deadfreight and/or demurrage, is one peculiar to the dry cargo trades
and is rarely, if ever, encountered in the wet or tanker t rades.
I n deep-sea market s, brokerage normal l y amount s t o 1. 25% of
gross f rei ght , deadf rei ght and demurrage, and i s payabl e by a
shi powner f rom sums recei ved t o each broker i nvol ved i n a t ransact i on,
al t hough i t f requent l y occurs t hat a chart erer wi l l deduct an appropr i at e
amount f rom f rei ght payment t o t he shi powner and undert ake t o pay t he
brokerage di rect t o hi s own and/ or t o ot her brokers i nvol ved. Thus, f or
t he i nvol vement of t wo brokers, 2. 5% brokerage i s payabl e, 3. 75% f or
t hree and so on. Thi s var i es, however , and a broker regul ar l y and
excl usi vel y empl oyed by a part i cul ar shi powner or chart erer may agree
t o a brokerage of , says, onl y 1%. Al t ernat i vel y, i f t hat broker undert akes
t o handl e al l t he post -f i xt ur e work on behal f of that owner or charterer, his
brokerage may be increased to, say, 2%, to cover the costs of the extra time

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and expenses involved. Furthermore, a broker involved in transactions of
relatively small value says a short-sea broker may be entitled to a higher
basic brokerage than 1.25% - say one third of 5% or 2%.
Address commi ssi on al so var i es i n amount . A f ew chart erers do
not appl y i t at al l whi l st a f urt her f ew negot i at e as much 5%. Thus t he
t ot al commi ssi on (i . e. address commi ssi on pl us br okerages) due on dr y -
cargo busi ness may var y f rom as l i t t l e as 1. 25% t o as much as 7. 50%
perhaps even ore. The norm f or deep sea dr y-cargo busi ness i s around
3. 75/ 5%, al t hough f or cert ai n t rades eg sugar busi ness i t i s
t radi t i onal l y hi gher at 6. 25%, and ot her t radi t i onal l y l ess eg. The
Worl d Food Programme, of t he Uni t ed Nat i ons at 1. 25%. What ever t he
amount of t ot al commi ssi on, however, i t i s a mat t er f or assessment i n
t he appropr i at e f rei ght rat e, j ust as f or any ot her f act or eg port t i me.
Shi powners must obvi ousl y t ake t he t ot al amount i nt o consi derat i on
when negot i at i ng f rei ght l evel s, as i t i s on net i ncome t hat ret urns and
prof i t s/ l osses are cal cul at ed.
Al t hough i n cert ai n cases t hese brokerages may seem gener ous, i t
shoul d be remembered t hat a broker s i ncome ver y much f ol l ows t he
f l uct uat i ons of t he f rei ght market i n whi ch he or she i s i nvol ved. The
l ower t he f rei ght rat es, t he harder i t i s necessar y t o st ri ve t o f i x
busi ness and t he l ower t he r et urn i f successf ul , based as br okerage i s
on depr essed f rei ght rat e l evel s. Furt her more, a broker recei ves i ncome
onl y i f successf ul . Al l t hose f ai l ur es and near mi sses, even t hough
cost l y i n t erms of t i me and expenses, count f or not hi ng unl ess a
conf i rmed f i xt ure resul t s.
Nevert hel ess, a broker may be abl e t o gai n some prot ect i on i n
t he case of non-perf ormance of conf i rmed busi ness, as i s pr ovi ded, f or
exampl e, i n t he GENCON chart er part y, whi ch st at es I n case of non-
execut i on at l east 1/ 3
r d
of t he brokerage on t he est i mat ed amount of
f rei ght and dead-f rei ght t o be pai d by t he Owners t o t he Brokers as
i ndemni t y f or t he l at t er s expenses and work. I n case of more voyages

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t he amount of i ndemni t y t o be mut ual l y agreed . Few pri nt ed
chart erpart i es are so generous, however, and i t behoves brokers t o
endeavour t o persuade pr i nci pal s t o cover t hem agai nst t he f i nanci al
expenses and t i me i nvol ved i n t he case of cancel l at i on of a negot i at ed
f i xt ure.
I t shoul d al so be not ed t hat a broker wi l l have great di f f i cul t y i n
perusui ng a cl ai m agai nst a shi powner, f or exampl e, f or non- payment of
brokerage. The broker i s not a part y t o t he cont ract bet ween chart erer
and shi powner and i f brokerage i s due but unpai d, t he broker must
obt ai n t he support on one part y t o cl ai m agai nst t he ot her. Hel p mi ght
be at hand t hr ough under wr i t ers of Prof essi onal i ndemni t y i nsurance
schemes (see Lesson Ten) or t hrough t he of f i ces of bodi es such as t he
Bal t i c Exchange or BI MCO, t he def aul t i ng shi powners per haps bei ng
shamed i nt o payi ng t hei r dues i f f aced wi t h adverse publ i ci t y r esul t i ng
f rom non-payment . I t can, however, become a t ri cky si t uat i on f or t he
broker(s) concerned.
Some shi powners are bet t er t han ot hers at payi ng broker age,
set t l i ng sums as and when t hey become due eg payi ng 90% of
brokerage once 90% f rei ght has been recei ved. Ot hers ar e ext remel y
t ardy, onl y payi ng t he f i rst and onl y sum of brokerage mont hs af t er
compl et i on of t he voyage(s) concer ned and, of course, ev en l onger af t er
t he f i xt ur e was conf i rmed. Al so, i n some cases chart erers negot i at e t hat
t he f ul l , 100% of address commi ssi on and, per haps, brokerage, i s
deduct i bl e f rom any advance f rei ght pai d t o a shi powner. I t i s al so
i mport ant f or brokers t o ent er t hei r ent i t l ement t o brokerage i nt o t he
chart erpart y si gned by bot h pri nci pal s because t han at l east a
mi screant shi powner cannot deny bei ng aware of brokerage due.
Sel f Assessment Questi ons
1. How can chart er ers prot ect t hemsel ves agai nst t he r i sk of l oss of
f rei ght duri ng a voyage i f f rei ght i s deemed earned by a shi powner upon

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l oadi ng of t he cargo?
2. As a br oker, what means woul d you empl oy t o encour age prompt
payment of your br okerage af t er f i xi ng a vessel ?
Ti me Chartereri ng Much of what has been wr i t t en above under t he
headi ng Voyage Chart eri ng appl i es al so t o Ti me Chart eri ng. There
are nat ural l y, however, subst ant i al di f f erences i n t he cal cul at i on of
f rei ght appl i cabl e t o voyage chart eri ng, and hi res appl i cabl e t o t i me
chart eri ng.
How Hi re i s cal cul at ed: Ti me chart er hi re i s commonl y cal cul at ed and
descr i bed i n dr y-car go chart erpart i es as a dai l y rat e eg US$ 8, 000
dai l y. To t hi s i s appl i ed a pro-rat a adj ust ment f or part of a day. Thus a
vessel on hi re f or 10 days 12 hours i n ot her words f or 10. 5 days
woul d be ent i t l ed t o gross hi re of US$ 84, 000.
Thus f or hi re pai d semi -mont hl y (i . e. 15 days i n advance f or a
t hi rt y day cal endar mont h) gross hi re woul d amount t o US$ 120, 000
(US$ 8, 000 x 15), or US$ 240, 000 f or t he f ul l cal endar mont h. An
al t ernat i ve but l ess ut i l i zed met hod of cal cul at i ng hi re i s t o base same
on a vessel s deadwei ght t onnage per cal endar mont h. Thus f or a
40, 000 t onne summer deadwei ght bul kcarri er, t he equi val ent
t i mechart er rat e t o US$ 8, 000 dai l y can be cal cul at ed as f ol l ows: -
US$ 240, 000 40, 000 sdwt = US$ 6. 00 per sdwt t onne.
However, t he durat i on of a cal endar mont h vari es mont h by
mont h. One mont h i t wi l l i ndeed consi st of 30 days, anot her of 31 or
event 28 days. Consequent l y, i t i s nor mal t o use as a f act or i n such
cal cul at i ons, t he average number of days i n a cal endar mont h al l owi ng,
of course, f or t he l eap year. An average cal endar mont h wi l l t heref ore
be f ound t o exi st of 30. 4375 days, and t hi s wi l l gi ve a sl i ght l y di f f erent
dai l y val ue t o our bul kcarri er:

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40, 000 t onnes sdwt x US$ 6. 00 per t onne 30. 4375 = US$ 7. 885. 01
dai l y.
The ASBATI ME char t erpart y (f or exampl e) al l ows f or ei t her met hod of
hi re cal cul at i on i n cl ause 4.
When Hi re i s payabl e: I n near l y ever y case, i t i s agreed t hat hi re i s
payabl e i n advance i . e. mont hl y, or semi -mont hl y, or ever y f i f t een days
i n advance. The ASBATI ME, cl ause 5 sel ect s semi -mont hl y i n advance
but , i n t he i nt er est s of easy account i ng, conveni ence and cert ai nt y, i t i s
common pract i ce t o pay hi re ever f i f t een days i n advance, whi ch
cont i nues t o al l ow f or subsequent equal payment s i rrespect i ve of
whet her a cal endar mont h compri ses 28, 29, 30 or 31 days. For t he
peri od l eadi ng up t o redel i ver y, when t here wi l l probabl y not be an
ent i re semi mont hl y peri od out st andi ng, chart erers ar e normal l y
rel uct ant t o pay hi r e i n excess of t hat whi ch i s est i mat ed t o be due.
Nevert hel ess, t he ASBATI ME, i n common wi t h most ot her t i me chart ers,
st i pul at es t hat hi re shal l be pai d f or t he bal ance day by day as i t
becomes due, i f so requi red by owners .

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When Hi re i s payabl e : Just as f or voyage chart eri ng and t he payment
of f rei ght , t i me chart er hi r e has t o be t ransf erred i n good t i me f rom t he
bankers of a chart er er t o t he bank account of a shi powner. I f t hi s hi re
does not arri ve i n t i me, t hen t echni cal l y t he chart erer i s i n br each of t he
cont ract and one woul d consi der, perhaps, t hat t he shi powner has a
case f or wi t hdrawi ng hi s vessel f rom t he chart erer s empl oy.
I n f act , i t i s not as si mpl e as t hat because, i n a l egal sense, t he
shi powner has t o show t hat t he chart erer consi st ent l y pai d l at e and had
been consi st ent l y warned t hat t he owner was cont empl at i ng wi t hdrawal .
One has t o real i ze t hat f or ever y def aul t i ng chart erer who mi sbehaves
because of st ri ngent f i nanci al probl ems, t here may, at cert ai n, st ages of
t he f rei ght market , be a shi powner who i s anxi ous t o f i nd any excuse t o
wi t hdraw hi s shi p f rom a t i mechart er commi t ment at a l ow rat e of hi re t o
t ake advant age i f possi bl e of hi gher f rei ght and hi re l evel s el sewher e.
The obj ect of a wel l -draf t ed t i me chart erpart y shoul d be t o as f ar
as possi bl e remove any t empt at i on f or pot ent i al mi screant s t o
mi sbehave. Whi l st hi re i s t o be pai d and recei ved by t he shi powner s
bank i n advance at agreed i nt er val s, and t he t i me chart erpart y shoul d
cl earl y st at e t hi s, so i t has t o be real i zed t hat i nevi t abl y banks wi l l
occassi onal y acci dent al l y del ay t ransf ers of moneys or mi sr out e same.
Thus i t i s t ypi cal t o i nsert a si de cl ause requi ri ng owners t o gi ve some
not i ce of any i nt ent i on t o wi t hdraw t hei r vessel , t hereby provi di ng an
opport uni t y f or t i me chart erers t o make amends or t o remedy any
banki ng error eg a peri od of grace . I n f act t he ASBATI ME i ncl udes a
sui t abl e opt i oned cl ause i n cl ause 29 of that chart erpart y.
Bal l ast Bonuses: Where some shi ps del i ver on t o t i mechart er some
di st ance f rom t hei r ori gi nal posi t i on, t hei r owners may negot i at e a
posi t i oni ng bonus t o cover t i me and expenses (eg bunker cost s or canal
t ol l s) i ncurred bet ween depart ure f rom t he ori gi nal posi t i on t o t he
vessel s del i ver y under t he new empl oyment . (Ver y occasi onal l y, i f a
t i me chart erer redel i ver s a vessel i n a poor posi t i on rel at i ve t o f ol l owi ng

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empl oyment opport uni t i es, i t may be possi bl e f or an owner t o negot i at e
a redel i ver y posi t i oni ng bonus, al t hough t hi s i s not ver y common). Such a
lumpsum payment, however, whether applicable to delivery on to or redelivery
off timecharter, is termed a ballast bonus and a delivery ballast bonus is
usually payable in full together with the first hire due under a new timecharter.
Payments in respect of hire are usually subject, of course, to a discount
for address commissions and/or brokerages (just as for freight), but not so in
respect of bunkers or canal tolls. Consequently, with ballast bonuses
containing elements of both hire and voyage expense reimbursement, the
question arises as t o whet her such bonuses shoul d be pai d gross (i . e.
l i abl e t o deduct i on f or commi ssi on/ br okerage) or net t of such
deduct i ons. I n pract i ce i t al l depends on t he negot i at i ng st rengt h of
each part y and t he st at e of t he f rei ght market . I n some cases bal l ast
bonuses wi l l be net t and i n ot hers t hey wi l l be gross. I t i s not unusual ,
even, f or bal l at bonuses t o bet net t of address commi ssi on but gross of
brokerage.
Bunkers: As we have seen i n Lesson Four, when a vessel del i vers on
t i mechart er, t he chart erers wi l l normal l y t ake over t he bunkers
remai ni ng on board t he vessel at t hat t i me, and r ei mburse t he
shi powner accordi ngl y. Payment i s usual l y made wi t h t he f i rst hi re
payment . On redel i ver y, t he reverse process t akes pl ace, wi t h
chart erers est i mat i ng t he quant i t y of bunkers remai ni ng on boar d on
redel i ver y and deduct i ng t he equi val ent monet ary val ue f rom t he f i nal
(or penul t i mat e i n t he case of l arge quant i t y of bunkers) hi res payment .
Adj ust ment s i n bot h cases are abl e t o be made upon recei pt of del i ver y
and del i ver y and redel i ver y sur vey report s.
Del i very and Redel i very : When a vessel del i vers on t o t i me chart er,
not onl y does t he t i me chart er cl ock st art t o t i ck, but i t set s i n mot i on
al so t he payment of t he f i rst hi re and any addi t i onal sums such as f or
bunkers remai ni ng on board at t he t i me, and bal l ast bonus. I t i s
t heref ore essent i al t hat copi es of t he sur vey report s si gned and

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wi t nessed by t he mast er and port agent s and, i f avai l abl e, by a
chart erer s repr esent at i ve such as a supercargo, be di st r i but ed t o al l
concerned. I n t hi s way t he account s procedures can avoi d bei ng
unnecessar i l y compl i cat ed.
I t i s al so vi t al t o speci f y whet her del i ver y and redel i ver y t i mes wi l l
be recogni zed as bei ng as per l ocal t i mes or as per some conveni ent
st andard t i me, such as Greenwhi ch Mean Ti me (GMT). If t he
chart erpart y i s si l ent on t hi s aspect , Engl i sh l aw wi l l assume t hat act ual
el apsed t i me wi l l appl y t o t he t i mechart er peri od, i . e. as i f a st op-
wat ch was st art ed on t he bri dge of t he shi p upon del i ver y onl y t o st op
upon r edel i ver y ( and, of course, f or any of f -hi res). I f l ocal t i me i s
speci f i ed, however, one part y or t he ot her mi ght benef i t by gai ni ng
t i me by appl i cat i on of t i me zone changes. You can work i t out f or
yoursel f wi t h an at l as showi ng t i me zones and can cal cul at e whet her a
shi p movi ng east / west or west / east i s t o t he advant age of a
t i mechart erer basi s l ocal t i me . Wi t h GMT or equi val ent , t here i s no
advant age t o ei t her part y and t hi s, t heref ore, i s t o be r ecommended.
Addi ti ons to Hi re: Qui t e apart f rom bal l ast bonuses, t here may be
ot her addi t i ons t o hi re payment s made f rom t i me t o t i me. I n Lesson
Four, under t he sect i on deal i ng wi t h el ement s of t i me chart erpart i es,
st udent s wi l l recal l , f or exampl e, t he cl ause concerni ng (1) supercargo
accommodat i on, provi si on of empl oyees meal s. I n addi t i on t here may be
cl ai ms f rom t he owner f or radi o message expense r ei mbursement , f or
communi cat i ons necessar y on behal f of t i mechart erers, as wel l as f or
grat ui t i es expended on chart er ers behal f t o cert ai n empl oyees at port s
of cal l . Fi nal l y a t i me chart er i nvar i abl y i nsi st s upon t he vessel bei ng
redel i vered i n l i ke good order and condi t i on as when she was t aken
over by t he chart erer. Thi s woul d, t heref ore, mean t hat t he t i mechart er
woul d be requi r ed t o empl y l abour t o cl ean t he shi p s hol ds and she
woul d remai n on hi r e al l t he t i me t hi s was t aki ng pl ace. Hol d-cl eani ng
can, however, be qui t e easi l y done by t he shi p s cr ew on t he bal l ast
passage t o t he next l oadi ng port and qui t e of t en t he chart erer i s abl e t o

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negot i at e t he ri ght t o redel i ver t he shi p wi t hout t hat f i nal cl eani ng. The
qui d prop quo f or t hi s concessi on i s usual l y a l umpsum i n l i eu of
cl eani ng payabl e wi t h t he bal ance of out st andi ng hi re. Al l t hese need t o
be cost ed, vouchers suppl i ed and cl ai ms made.

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Deducti ons from Hi re: As we have al ready seen, us f or f rei ght , hi re i s
subj ect t o deduct i ons f or:
1) Addr ess Commi ssi on and/ or brokerage. However, hi re i s al so subj ect
t o ot her deduct i ons: -
2) Port di sbursements. Qui t e of t en the owner of a t i me chart ered
vessel wi l l avoi d appoi nt i ng a port agent t o at t end on t hei r behal f ,
rel yi ng i nst ead on t he t i me chart erers port agent and rei mbursi ng any
expenses t he t i me chart erer and/ or t he port agent may i ncur, (eg cash
t o vessel s mast er, chandl er y bi l l s, cr ew l eavi ng or j oi ni ng et c. ) by
means of a rout i ne deduct i on f rom hi r e. Most t i me charterparties give
charterers a reward for carrying out this service of payment of a percentage
based on the amount involved. In the ASBATIME LINES 128/132, this
reward amounts to 2.50% commission on any such advances.
3) Domestic bunkers. Bearing in mind that ASBATIME although intended
and marketed as a replacement of the NEW YORK PRODUCE EXCHANGE
TIME CHARTER 1946, is rarely used, and is used here only for ease of
i l l ust rat i ng t he el ement s of a t i mechart er and part i cul ar cl auses, i t i s
i mport ant t o draw st udent s at t ent i on t o an omi ssi on i n regard t o
domest i c bunkers. Ref erence t o t he wi del y ut i l i zed NYPE 46 f orm, l i ne
20, wi l l r eveal t hat f uel used f or coki ng, condensi ng wat er, or f or
grat es and st oves t o be agreed as f or quant i t y, and t he cost of
repl acement same, t o be al l owed by owners .
No ment i on of t hi s domest i c f uel arrangement i s cont ai ned i n t he
ASBATI ME. Nevert hel ess, and despi t e despi t e t he ol d-f ashi oned
l anguage i nt roduced ori gi nal l y when st eam-power ed vessel s were t he
norm, i t has been l egal l y uphel d under Engl i sh l aw duri ng t he 1980 s
t hat t he spi ri t of t hi s cl ause appl i es i n pr i nci pl e al so t o modern di esel -
engi ned shi ps. Consequent l y, provi di ng agreement can be reached as
t o quant i t y (usual l y by a pre-cal cul at i on duri ng f i xi ng negot i at i ons) and
no mat t er what chart erpart y f orm i s bei ng used, char t erers can

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negot i at e ent i t l ement t o an al l owance f or a vessel s domest i c f uel
consupt i on f or heat i ng, l i ght i ng, cooki ng, et c. and t hi s i s usual l y
deduct ed i n t he f orm of a l umpsum payment f rom hi re.
4) Off Hi re: Cl ause 15 of t he ASBATI ME provi des a val uabl e summary
of t he many reasons why a chart erer wi l l be ent i t l ed t o pl ace a t i me
chart ered shi p of f -hi re . Whi l st a t i me chart erer vessel wi l l r emai n on-
hi re whi l st f ul l y at t he servi ce of chart erers i nevi t abl y, even f or t he best
run vessel , a t i me wi l l come when t hat shi p wi l l be pl aced of f -hi re .
Such occasi on may occur t hrough mechani cal break-down ei t her of a
shi p s mot i ve power or cargo gear, or i t may be t hat t he vessel has t o
devi at e f rom her course t o l and a si ck seaman. An of f -hi re cl ause
normal l y covers such event ual i t i es f ul l y and t her e shoul d be no reason
f or any di f f erences of opi ni on. However , much t he same as when a
vessel del i vers on t i mechart er at sea i nst ead of at a conveni ent and
easi l y i dent i f i abl e pl ace such as droppi ng out ward pi l ot El be No. 1 i t
may be ver y di f f i cul t t o est abl i sh t he exact l i mi t s of of f -hi re and,
consequent l y, t he equi val ent amount of hi re.
One si t uat i on whi ch can be consi dered under t he same headi ng
as of f -hi re i s t hat of poor perf ormance when t he chart erer cl ai ms t hat
t he vessel has f ai l ed t o perf orm i n t erms of speed of f uel consumpt i on
as provi ded f or i n t he chart erpart y. Most moder n shi ps are abl e t o
provi de a r ange of combi nat i ons of speed and f uel , al l owi ng chart erers
t o sel ect whi chever combi nat i on i s most sui t abl e f or t hei r pur pose. They
may f or exampl e have a t i ght schedul e t o meet i n whi ch case t hey wi l l
want t he hi ghest speed even t hough t hi s means hi gher f uel cost s.
Conversel y t i me may not be so i mport ant and economi cal use of
bunkers i s pref erabl e. However, whi chever speed range i s sel ect ed t he
chart erpart y wi l l speci f y t hat such a speed and consumpt i on i s onl y
achi evabl e i n f ai r weat her condi t i ons. I n a di sput e over speed and
consumpt i on t he owner wi l l cl ai m t he weat her was at f aul t whi l st t he
chart erer wi l l argue ot her wi se and demand f i nanci al compensat i on f or
t he al l eged poor perf ormance.

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As we have seen i n Lesson Four, i t i s usual f or a vessel s l og
books t o be made avai l abl e t o a t i me chart erer and i t may wel l be t hat i t
i s al so agreed t hat i n such di sput es, ref erence wi l l be made t o an
out si de body such as Oceanr out es, t o assess whet her a vessel
perf ormed poorl y or not and, i f so, t he f i nanci al ext ent of t he poor
perf ormance.
Wi t h t anker chart eri ng, i t i s of t en t he case t hat t he owner of a
t anker exceedi ng t he st i pul at ed t i mechart er perf ormance, i s rewarded
by payment of ext ra hi re ref l ect i ng t he f i nanci al ext ent of t he bet t er
perf ormance. Onl y rarel y i s t hi s t he case wi t h dr y-cargo chart eri ng,
al t hough t here i s no reason why dr y-cargo shi ps shoul d not be si mi l ar l y
assessed. I n f act , al t hough i t woul d creat e an addi t i onal workl oad f or
t hose ent rust ed wi t h perf ormi ng t he cal cul at i ons, wi t h t he ai d of
comput er t echnol ogy t hi s i s no l onger t he chore i t once was, and t here
i s l ess reason f or shi powners t o mi descr i be t hei r vessel s dur i ng
negot i at i ons l eadi ng t o a f i xt ure, i f t hey are t o be rewarded any way f or
enhanced perf ormance i n accordance wi t h t he t i mechart er val ue of t hei r
vessel . Consequent l y, t here i s ever y reason t o borrow one of t he
t anker i ndust r y s good i deas.
Li nes 190 t o 195 of t he ASBATI ME ref er t o di versi ons f rom a
vessel s s pl anned course, and i t i s necessar y f or t hose i nvol ved i n t hi s
area of shi ppi ng t o f ami l i ari ze t hemsel ves wi t h si mpl e devi at i on
cal cul at i ons used t o assess t he cost i ngs of of f -hi re i nci dent s. I n t he
f ol l owi ng exampl e, l et us assume t hat our vessel i s devi at i ng t o l and a
si ck seaman (t he cost of whi ch, i nci dent al l y, shoul d be covered under
t he t erms of an owner s P & I i nsurance cover) or, perhaps, i s
proceedi ng t o a dr y-dock f or rout i ne repai rs. Let us al so assume t hat
bot h i nci dent s are cl earl y of f -hi re and t he onl y pr obl em i s f or t he part i es
t o cal cul at e t he t i me spent of f -hi re and t he quant i t y and cost of excess
bunkers consumed.

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Exampl e One

The devi at i on i s normal l y cal cul at ed by t he Mast er and sent
di rect l y t o bot h hi s owners and chart erers or t o chart er ers vi a hi s
owner s and wi l l cover ext ra t i me and bunkers used. From t he act ual
t i me used t o devi at e f rom Poi nt A t o Port / Drydock and t o ret urn t o poi nt
B (i ncl udi ng al l t i me spent i n Port / Dr ydock) must be deduct ed t he
est i mat ed t i me t hat woul d have been t aken i f st eami ng as per
t i mechart erer s i nst ruct i ons f rom Poi nt A t o Poi nt B di rect . The
di f f erence i s of f -hi re. These f i gures can be checked by t i mechart erers,
even i f t hey empl oy no-one wi t h sea goi ng exper i ence, by dext rous use
of mari ne di st ance t abl es whi ch, al t hough possi bl y not ent i rel y
accurat e, wi l l gi ve a cl ose approxi mat i on. Fuel and di esel oi l
consumpt i on can be checked by appl yi ng C/ P bunker f i gures t o t he
speeds used i n t he devi at i on cal cul at i ons, compared wi t h di st ances
i nvol ved.


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Thus, usi ng t he exampl e, and assumi ng t hat t he di st ance bet ween
each poi nt i s 312 naut i cal mi l es and t hat a t he shi p spent 5 days i n port
bot h dr ydocki ng and repai r i ng al ongsi de t he shi pyar d f aci l i t i es, and
gi ven t hat t he chart er er s i nst ruct i ons were f or t he shi p t o proceed at 13
knot s on a consumpt i on (as per chart erpart y) of 20 t onnes f uel oi l dai l y
at sea we can est i mat e:
(Shi p s speed 13 knot s (13 x 24 hours) = 312 NMPD
Devi at i on: - Poi nt A t o Port : 312 nm = 1 day
Port t o Poi nt B: 312 nm. = 1 day
Port t o Poi nt B: 312 nm = 5 days

Tot al Devi at i on = 7 days

Less Poi nt A t o Poi nt B : 312 nm. = 1 day

Of f Hi re = 6 days

Bunker Consumpt i on:

F/ O Poi nt A t o Port : 20 t onnes
Port t o Poi nt B : 20

40
Less Poi nt A t o Poi nt B : 20

20 t onnes F/ o

D/ O. : say 1 t onne D/ O per day (as per c/ p_
Of f Hi re 6 days t hus - 6 t onnes D/ O.

The above exampl e i s obvi ousl y ver y si mpl e but t he pri nci pl e i s exact l y
t he same f or more compl i cat ed cal cul at i ons.


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Exampl e Two

A vessel en rout e f rom Cape of Good Hope t o Fremant l e devi at es t o
Durban t o col l ect urgent l y needed spare part s. To cal cul at e
approxi mat e of f -hi re and ext ra bunker consumpt i on:


Di st ance accordi ng BP Di st ance Tabl e: -

i ) Cape of Good Hope/ Fremant l e 4, 670 NM.
i i ) Cape of Good Hope / Durban 755 4, 996
Durban/ Fremant l e 4, 241 4, 996
-------------------------
Devi at i on 4, 241 326 NM.
-------------------------

Assuming vessels speed and consumption as per Example One:

326 / 312 = 1.045 days off -hire
1.045 x 20 tonnes F/O = 20.09 tonne F/C
+ 1.045 tonnes D/O.

Self Assessment Question

List the reasons you can identify for a vessel to be placed off -hire.

Test Questions

The bulkcarrier ALBATROS has performed a voyage charter followed by a
timecharter. You have now received the final papers for both employments and
are in a position to draw up final statements for each using the following data,
and producing the balance due :-


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1. VOYAGE

Loading Agaba
Discharging Montoir
Cargo: 21,475 tonnes bulk phosphaste
Freight: US$ 21.00 per mt.
Address Commission: 2.00%
Brokerage: 2.50%
90% Freight paid in advance
Total Despatch at Agaba: $ 9,500.00
Total Demurrage at Montoir: $ 12,250.00

2. TIMECHARTER

Delivery dop Monitor 15
t h
March 0600 hours GMT Redelvery dop
Madras 30
t h
May 1800 hours GMT Bunkers on delivery : 465 tonnes f/o
and 53 d/o Bunkes on redelivery : 450 tonnes f/o and 47 d/o.

Bunker prices both ends: US$ 105 per mt. F/o. US$ 165 per mt. d/o.
Hire: US$ 8,000 daily
Address Commission 2.5%
Brokerage 3.75%

Domestic Consumption: 0.25 tonnes d/o daily at t/c price.

Owners port disbursements (at 2.5%):

Hamburg US$ 4,250
Rotterdam 5,000
Suez Canal 2,500
Bombay 3,750

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Madras 1,500

Radio Messages:

March US$ 525
April 750
May 225

Meals and Gratuities

Meals Gratuities

Hamburg US$ 1000 US$ 20
Rotterdam 50 225
Suez Canal 25 900
Bombay 550 250
Madras 525 225

Hire Payments :

15
t h
March US$ 112,500.00
30
t h
March 112,500.00
14
t h
April 112,500.00
29
t h
April 112,500.00
14
t h
May 20,000.00

Payment for Bunkers on Delivery: US $ 58,620.00



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CHAPTER-6

LAYTIME


Laytime is the time permitted in a contract for loading and/or
discharging a voyage chartered ship. If this permitted time is exceeded, the
owner or operator of the ship will be entitled to damages. These damages
are normally agreed to be liquidated that is to say that a daily sum (or
pro-rata for part of a day) will be negotiated in the form of demurrage,
payable for each day or part day of delay. If a vessel finishes before the
allowed time or laytime has been used, a charterer may be entitled to
a reward in the form of payment of despatch money usually payable at
half the caily rate of demurrage. Laytime calculating is not an activity to be
undertaken lightly. There may be considerable sums of money at stake,
which will have a noticeable effect on a ships profitability, or on a
charterers income.
The calculation of laytime can be divided into Seven Stages:-
1. Read the relevant clauses in the governing CONTRACT.
2. Obtain the STATEMENT of FACTS.
3. Determine how much laytime is available i.e. its DURATION
4. Establish the COMMENCEMENT of laytime.
5. Allow for INTERRUPTIONS to laytime
6. Establish when laytime will cease i.e. ESSATON, and,

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7. Calculate how much DESPATCH or DEMURRAGE is payable.
1.Contract : The relevant charterparty or the sales contract should specify
laytime terms, so that by referring to the contract in relation to the details
supplied by the statement of facts form, a time sheet can be drawn up
which shows whether the allowed laytime has been exceeded or is not fully
used. The interpretation of many of these clauses and their true
significance is almost an art in itself, and careful wording needs to be
employed in the drafting of laytime clauses, guided by knowledge of
specialized case law on the subj ect.
2Statement of Facts: One of the prime functions of a port agent is to
produce a written record of events occurring during a vessels port visit
known as a port operations log. Thus are recorded a ships arrival date
and time. When berthed or shifted to another berth; worked cargo,
bunkered and departed; the time notice of readinesses was tendered and
accepted; weather conditions; and whatever else is relevant.
No matter the reason for a vessels visit to port, whether it is for
drydocking or repairing; bunkering; cargo-working; whether or voyage or
timecharter; a port agent should produce a Statement of Facts form to be
forwarded to his principal upon the vessels departure. Many port agent use
their own in-house designed form for this purpose, but a standard document
which can be used at any port, worldwi se, is available from BIMCO, and can
be used if the agent or his principal so wishes (see Appendix 6 : 1). It will be
from this that a Time Sheet (such as in the form of Appendix 6 : 2) will
eventually be drawn up.
It is good practice for principals to br ief a port agent fully about
operational and chartering matters before a vessels arrival in port. If
possible the port agent should be sent a copy of the charterparty / sales
contract for perusal and guidance. In this way the agent should be aware of
information ultimately needed to be incorporated into the statement of facts
form.

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To avoid unnecessary dispute, interested parties to a vessels visit
to port eg the ships Master, port agents, shipper/receiver should sign
the completed statement of fact s form. There should rarely be any obj ection
to signing that if it sets out to be simply what its name implies a statement
of facts. It is in the laytime interpretation of those facts. It is in the laytime
interpretation of those facts that disputes are likely to arise, not in the
recording of events. If, however, one or other of the parties has an
obj ection to the contents of a statement of facts form, it should be signed
under protest, a statement being added, clarifying the reason(s) for the
obj ection.
3. Duration: Duration of laytime can be sub-divided into three categories : -
Definite
Calculable
Indefinite
Definite Laytime: The simplest of the categories, specifies how many
days/hours are allowed, whether for loading or for discharging, or for both
activities, the latter sometimes being known as for all purposes. Terms
might be : Cargo to be loaded within 5 weather working days of 24
consecutive hours, or 7 working days of 24 consecutive hours, weather
permitting, for all purposes.
Calculable Laytime : In these cases periods of definite laytime as described
above can only be established once a calculation has first been carried out,
based on factors contained in the contract and in the statement of facts
form. Calculable laytime can be sub-divided into two further sub-sections :-
Tonnage Calculations: Tonnage calculations are the most common types
of calculable laytime. A contract will state that a vessel is to load and/or

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discharge at a set rate of tons/tones per day/hour. Thus, for a ship loading
40,000 metric tones of cargo, minimum/maximum, at a rate of 10,000
tonnes daily, there wil l be 4 days of laytime available to her charterers.
However, it might be that the ships Master has a margin within which
to load eg 40,000 tonnes/5% more or l ess. Thus, if the ship
eventually loaded 41,258 tonnes of cargo, available laytime can be
assessed as follows :
41,258 tonnes / 10,000 tonnes daily = 4,1258 days.
4, 1258 days equates to 4 days 3 hours 1 minute in the following
manner :-
4.1258 D H M
- 4,0000 4 00 000

0.1258
- 0.1250 - 03 00

0.0008
0.0007 - 00 01
4 03 01

A table giving the decimal parts of a day to help in calculations of this
kind will be found in Appendix 6 : 3.
Hatch Calculations: Are more complicated than Tonnage Calculations, but
occasionally need to be performed. Nonetheless, there are well -established
procedures to assist. Let us assume that general cargo vessel HERON is
discharging bagged wheat flour on the basis of: -
i) A discharge rate of 175 tonnes per hatch daily.

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ii) Total cargo of 7,000 tonnes,
iii) 1,575 tonnes cargo in the largest cargo compartment, and
iv) Vessel has five (5) hatches.
Per Hatch dai l y
The vessel i s t o be di scharged at 175 t onnes per hat ch dai l y.
Thus 5 (hat ches) x 175 t onnes = 875 t onnes dai l y,
Thus 7, 000 t onnes cargo / 875 = 8 days permi t t ed l ayt i me.
Per Workabl e Hatch dai l y Where t he t erms workabl e , worki ng or
avai l abl e hat ch dai l y are i nt roduced, compl i cat i ons set i n. To be
workabl e under Engl i sh Law, a hat ch must be capabl e of bei ng
worked t hat i s t o say, t here must be space beneat h t hat hat ch at t he
l oadi ng port , and t here must be cargo under t he hat ch at di scharge
port . Taki ng t he above exampl e of t he HERON , as each hat ch i s
empt i ed, t he di scharge rat e woul d reduce by mul t i pl es of 175 t onnes
dai l y, unt i l al l hol ds become empt y one by one. Thi s i s, however, a
cumbersome and somet i mes compl i cat ed met hod of cal cul at i on, and
Engl i sh l aw procedure l ays down a si mpl er al t er nat i ve whi ch i s f ol l owed
i n such cases. Fi rst i t i s necessar y t o est abl i sh t he l argest uni t of
cargo i n t he vessel . Ref erence t o t he st owage pl an shows t hat 1, 575
t onnes cont ai ned i n No. 3 hol d and t weendeck beneat h No. 3 hat ch
const i t ut es t he l argest uni t . Thus, 1, 575 t onnes / 175 dai l y = 9 days
l ayt i me over al l .
However, where t he l argest uni t of cargo i s served by t wo or more
hat ches, t he uni t t onnage must be sub-di vi ded. Assumi ng t wo hat ches
ser ved No. 3 hol d and t weendeck, f or exampl e, 1, 575 t onnes woul d f i rst
be di vi ded by 2 bef ore appl yi ng t he f act or of 175 t onnes dai l y. I n t hat

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case, t he l argest i ndi vi si bl e cargo uni t woul d become t he 1500 t onnes
cont ai ned i n No. 2 hol d and t weendeck, and t he l ayt i me durat i on
cal cul at i on woul d t hen be: -
1, 500 t onnes / 175 dai l y 8. 771428 days l ayt i me.
(8. 571428 days can be convert ed t o days, hours and mi nut es by usi ng
t he t abl e i n Appendi x 6 : 3).

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I ndefi ni te Layti me: Occasi onal l y, an owner or operat or wi l l agree f or
hi s shi p t o be l oaded or di scharged as per cust om of t he port (COP);
cust omar y despat ch (CD) ; cust omar y qui ck despat ch (CQD), or f ast
as can (FAC) t erms.
The common f actor wi t h t hese t erms i s t hat al l pr ovi de a shi pper
or recei ver wi t h an i ndef i ni t e peri od duri ng whi ch t o per f orm cargo
operat i ons, al t hough t hey must act reasonabl y . I t i s unr easonabl e , f or
exampl e, f or cargo not t o be avai l abl e upon a vessel s arri val wi t hi n
agreed l aydays, and i n such a case, t he owner or operat or of t he shi p
woul d normal l y become ent i t l ed t o rei mbursement by damages f or
det ent i on . But ri sk of bad weat her, port congest i on, and suchl i ke are al l
f or t he shi powner/ operat or t o bear.
Fast as can appl i es normal l y t o sel f -l oadi ng/ di schargi ng vessel s
(see Lesson One) and st i pul at es t hat t he cargo wi l l be l oaded and/ or
di scharged as f ast as t he vessel can , of t en addi ng a f urt her st i pul at i on
t hat chart er ers or shi ppers/ recei vers must be abl e t o del i ver or t ake-
away cargo at a par t i cul ar dai l y t onnage rat e.
Deadfrei ght : Where onl y part of a cont ract ed cargo can be suppl i ed
and, consequent l y, where deadf rei ght becomes payabl e t o a
shi powner/ operat or as a resul t , under Engl i sh l aw l ayt i me i s nonet hel ess
appl i ed onl y on t he port i on of cargo act ual l y l oaded. Thus : -
i ) Cont ract ed cargo: - 10, 000 t onnes mi n/ max.
i i ) Loadi ng rat e : - 2, 000 t onnes dai l y
i i i ) Cargo suppl i ed : - 7, 000 t onnes
i v) Deadf rei ght : - 3, 000 t onnes (10, 000 7, 000)

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v) Layt i me: 7, 000 2, 000 = 3. 5 days.
However, al so under Engl i sh Law, a shi powner/ operat or cl ai mi ng
deadf rei ght must ret urn t o t he chart er er any benef i t recei ved. Thus t wo
l ayt i me cal cul at i ons shoul d be carr i ed out , one based on act ual cargo
l oaded/ di scharged and t he ot her on t he hypot het i cal cargo t hat shoul d
have been l oaded/ di scharged. Any di f f erence i n t he owners f avour
shoul d be credi t ed t o t he chart erer i n ret urn f or payment of deadf rei ght .
Ameri can l aw i s more st rai ght f orwar d i n cases of deadf rei ght ,
cal cul at i ng deadf rei ght on what has been l oaded, pl us t onnage
equi val ent t o t he deadf rei ght pai d by chart erers.
Commencement : For l ayt i me t o have commenced , a vessel must
have arri ved at t he pl ace where cargo operat i ons are t o be perf ormed
(1) arri val : must be physi cal l y abl e t o undergo cargo operat i ons (2)
readi ness ; and have deal t wi t h (3) cont ract ual commi t ment s.
Arri val : Layt i me i s a subj ect whi ch l ends i t sel f t o di sput e, and t he
def i ni t i on of whet her or not a shi p has arri ved i n a l ayt i me sense may
somet i mes be ext remel y l egal l y compl i cat ed, t here bei ng much Engl i sh
l aw on t he subj ect . Si mpl y, t o have arr i ved at a port , a vessel must
have reached ei t her t he l oadi ng/ di schargi ng pl ace or, shoul d t hat pl ace
be busy, normal wai t i ng pl ace. Furt hermore, a shi p s Mast er or agent
must have t endered Not i ce of Readi ness, i n accordance wi t h t he
cont ract requi rement s (eg wi t hi n of f i ce hours, Mondays t o Fri days ).
Not i ce of Readi ness can be gi ven or al l y, but usual l y a wri t t en
f orm i s used, an exampl e of whi ch can be found in Appendix 6:4. It is an
important function of a port agent to assist a ships Master in tendering notice of
a ships arrival, and also to ensure that shippers/receivers officially accept the
vessels notice of readiness, accomplished usually be signing and timing
acceptance on the notice from, although shippers/receivers or charterers

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nominated port agents, will accept subject to charterparty terms and
condi t i ons .

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Readi ness : A shi p must be physi cal l y capabl e of perf ormi ng cargo-
operat i ons eg at a l oadi ng port , hol ds must be cl eaned and prepared
f or recei vi ng cargo and, i f t he cont ract so speci f i es, hol ds must be
i nspect ed and decl ared sui t abl e by an appropr i at e aut hori t y bef ore
not i ce of readi ness wi l l be accept ed.
Contractual Commi tments: Cont ract s usual l y st at e t hat bef ore l ayt i me
commences, a vessel must , (a) have been ent ered at t he l ocal cust om
house and (b) be i n f ree prat i que (gi ven t he go ahead t o proceed by
t he port heal t h aut hori t y).
Congesti on: I n case cargo bert hs are occupi ed upon a vessel s arr i val ,
cont ract s usual l y speci f y t hat not i ces of readi ness can be t endered f rom
a normal wai t i ng pl ace , whet her i n bert h, or not (WI BON); whet he r i n
f ree prat i que, or not (WI FPON); and whet her cust om s cl eared or not
(WCCON). I t i s nor mal t hat t i me spent i n event ual shi f t i ng f rom t he
wai t i ng pl ace t o t he f i rst cargo bert h wi l l not count as l ayt i me.
Turn Ti me: Thi s occurs at cert ai n port s where shi ps wai t t hei r t ur n t o
l oad/ di scharge. When wai t i ng t urn, l ayt i me wi l l not usual l y count .
Somet i mes t urn t i me i s l i mi t ed say t o 48 hours l ayt i me
commenci ng once t hi s peri od has el apsed, or ear l i er i f cargo operat i ons
begi n wi t hi n t hat per i od. Where no t ur n t i me l i mi t i s speci f i ed, t he r i sk
of excessi ve del ay i s t hat f or a shi powner. When market s are i n t hei r
f avour, some chart erers at t empt t o i mpose t urn t i me condi t i ons i nt o a
chart erpart y, even t hough t here i s no such cust om f or same at t he port s
i nvol ved eg 36 hours t urn t i me bot h ends .
Commencement : Once a vessel has arri ved at a port , compl i ed wi t h al l
f ormal i t i es and cont ract ual commi t ment s, and t ender ed not i ce of
readi ness, l ayt i me wi l l commence i n accordance wi t h t he cont ract t er ms
eg at 0700 hours next worki ng day , or 12 hours f ol l owi ng t enderi ng
and accept i ng not i ce of readi ness . I t i s i mport ant t o remember t hat t he
commencement of t i me count i ng and t he commencement of act ual

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l oadi ng or di schargi ng can, under cer t ai n ci rcumst ances, be qui t e
di f f erent . Take, f or exampl e, a chart er part y wi t h 36 hours t urn t i me
even i f used al so Sundays and Hol i days except ed even i f used and
Not i ce of Readi ness t o be gi ven dur i ng normal of f i ce hours. Such a shi p
coul d arr i ve at , say, 6 p. m. on a Fri day, work t he ent i r e weekend and
t i me woul d not commence t o count unt i l 36 hours af t er 8 a.m. Monday.
Such a shi p woul d have been worki ng f or over f our days bef ore t i me
even commences t o count . Vi t al , t her ef ore, t o ensure al so t hat Not i ce of
Readi ness i s handed i n at t he earl i est permi ssi bl e moment . Never t hi nk
t hat as work has al ready st art ed a not i ce of readi ness i s not needed.
Sel f Assessment Questi ons
1. What are t he seven st ages t o be t aken i nt o consi derat i on when
cal cul at i ng l ayt i me?
2. What i s t he di f f erence bet ween a St at ement of Fact s and a Ti me
Sheet ?
3. What i s Free Prat i que ?
4. What i s t he ef f ect on l ayt i me cal cul at i ons when deadf rei ght i s
i nvol ved?
I nterrupti ons: Once l ayt i me has commenced, unl ess a vessel s cargo-
handl i ng equi pment breaks down, i t wi l l cont i nue unhi ndered unt i l t he
compl et i on of cargo oper at i ons or unt i l l ayt i me expi res or demurrage
commences. Nevert hel ess, cont ract s f requent l y i ncl ude express cl auses
i nt errupt i ng l ayt i me i n t he event of Weekends and hol i days , Shi f t i ng
bet ween bert hs, St ri kes, Bad Weat her and Br eakdowns
Weekends and hol i days: I f t hese are t o i nt errupt l ayt i me, t he cont ract
can be sai d t o be on SHEX t erms (Sundays and Hol i days Except ed), or

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on FHEX t erms (Fri days and Hol i days Except ed) i f i n Mosl em count ri es,
Shoul d weekends and hol i days count as l ayt i me, t he cont r act can be
sai d t o be based on SHI NC (Sundays and Hol i days I ncl usi ve) FHI NC
i n Mosl em count ri es. Normal l y a chart erpart y wi l l speci f y t he act ual t i me
bef ore a hol i day or a week end t hat l ayt i me i s t o be suspended eg
f rom 1800 hours on t he day precedi ng a hol i day . I f no such t i me i s
speci f i ed, l at i me i s usual l y suspended f rom mi dni ght on t he day
precedi ng a hol i day. A chart er part y wi l l normal l y speci f y t he act ual t i me
of resumpt i on of l ayt i me f ol l owi ng a hol i day or weekend eg 0700
hours Monday. I f no such t i me i s speci f i ed, l ayt i me wi l l usual l y
recommence at 0001 hours on t he day f ol l owi ng a hol i day or weekend.
I f cargo work i s per f ormed duri ng an except ed peri od, l ayt i me wi l l not
normal l y count , unl ess t he cont ract al l ows i t t o eg t i me not t o count
duri ng weekends, unl ess used . Al t ernat i vel y, a cont ract may
emphasi se t hat t i me used duri ng weekends i s not t o count , even i f
used . Occassi onal l y, agreement i s reached t hat act ual t i me used
duri ng weekends i s t o count as l ayt i me , or even hal f t i me act ual l y used
t o count , I t may al so be agreed t hat t he peri od bet ween not i ce of
readi ness bei ng t endered and t he commencement of l ayt i me may count
as l ayt i me i f act ual l y used .
Shi fti ng between berths: I t i s common pract i ce f or cont ract wordi ng t o
permi t l oadi ng / di schargi ng at more t han one bert h or anchorage at
each port . Consequent l y, t i me spent shi f t i ng bet ween
bert hs/ anchorages i s normal l y t aken t o be f or owners account .
However, shoul d t he agreed number of bert hs/ anchorages be exceeded,
i t becomes reasonabl e t hat t he shi f t i ng t i me i nvol ved shoul d count as
l ayt i me, and t hat t he expenses i nvol ved eg t owage and pi l ot age
shoul d al so be f or t he account of t he chart erers.
Stri kes: There i s nearl y al ways an expr ess cl ause i n a cont ract t o t he
ef f ect t hat del ays due t o shore st ri kes ar e not t o count as l ayt i me.
Bad Weather: Cl auses i n a shi ppi ng cont ract ref erri ng t o bad weat her

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i nt errupt i ons of l ayt i me at one t i me coul d be di vi ded i nt o t wo t ypes
weat her days and days, weat her permi t t i ng . For many years i t had
been accept ed t hat t he f ormer expressi on f avour ed chart er ers and t he
l at t er f avoured shi powner s. I n case of weat her worki ng days , l ayt i me
does not count dur i ng peri od of bad weat her t hat i nt errupt l oadi ng or
di schargi ng, nor (and t hi s i s t he i mport ant f act or) does l ayt i me count
when bad weat her occurs dur i ng a worki ng day even i f , had t he weat her
been f i ne, no at t empt woul d have been made t o work. Weat her worki ng
day descr i bes a t ype of worki ng day. I t does not mat t er whet her t he
vessel was act ual l y worki ng or not . I t f ol l ows, t heref ore, t hat even i f a
shi p i s not act ual l y on t he l oadi ng (or di schargi ng) bert h, f or exampl e
because i t i s occupi ed by anot her shi p, i f t i me has s t art ed t o run and
bad weat her occurs dur i ng a worki ng day, t hat t i me wi l l not count
agai nst chart erers as l ayt i me.
Take not e of t he word worki ng day ( we wi l l be st udyi ng t hi s a
l i t t l e more deepl y l at er i n t he l esson). A worki ng day not onl y ref ers t o a
day when work normal l y t akes pl ace, i t i s al so t hat part of t he day when
work i s normal l y done i n t he port i n quest i on. I f , t heref ore, t he wor d
worki ng i s not qual i f i ed i n any way, t he bad weat her woul d have t o
occur dur i ng t he port worki ng part of t he day f or i t t o be deduct ed f rom
t he l ayt i me. Conversel y, where t he chart erpart y reads wor ki ng day of
24 consecut i ve hour s ( whi ch i s now more normal ), t hen bad weat her
occurri ng at any t i me (once l ayt i me had st art ed t o run) woul d be
deduct i bl e even i f t he chart erer had no i nt ent i on of worki ng duri ng such
a peri od.
I n cases of days, weat her permi t t i ng i t was underst ood unt i l
recent l y, t hat onl y worki ng t i me act ual l y i nt errupt ed by bad weat her
woul d f ai l t o count as l ayt i me. Al l t hi s, however, was bef ore t he case of
t he VORRAS i n 1982. That vessel was a t anker and t he j udges of t he
Engl i sh Court of Appeal had t o det ermi ne t he meani ng of the t erm 72
runni ng hours, weat her permi t t i ng, Sundays and hol i days i ncl uded . ,
where t he vessel was kept f rom a l oadi ng bert h f or some days owi ng t o

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bad weat her. They hel d t hat bad weat her at t he t i me was such as t o
prevent t he l oadi ng of a vessel of t he VORRAS t ype and as such,
l ayt i me shoul d not count . I n ot her words, t hat deci si on on a t anker has
ef f ect i vel y eroded t he l ong-hel d and sacr ed di st i nct i on i n t he dry-cargo
market bet ween weat her worki ng and weat her permi t t i ng .
Frequent l y i n moder n chart erpart i es one wi l l st i l l encount er ei t her
t he t erms weat her worki ng or weat her i s permi t t i ng , al t hough under
Engl i sh l aw, at l east , t here i s ef f ect i vel y now no di f f erence. However,
bot h wi l l probabl y r ef er i n t he same cl ause t o days of 24 consecut i ve
hours , a si mi l ar expressi on t o t he runni ng hours used i n t he case of
t he VORRAS . The word consecut i ve i s, i n f act , ext remel y i mport ant ,
havi ng evol ved over ver y many years i n order t o avoi d cost l y di sput es.
Where t he t erm days of 24 consecut i ve hours i s i ncorporat ed
i nt o a chart er part y s l ayt i me provi si ons and t hi s i s t he t er m used i n
al most al l modern dry-cargo chart er part i es i t i n ef f ect means t hat a
l ayt i me day wi l l run cont i nuousl y f or 24 hours each day, unl ess
speci f i cal l y i nt errupt ed by some chart erpart y f act or such as a weekend
or hol i day, bad weat her, or a st ri ke. I t i s of no consequence whet her t h e
worki ng day of a port i s of l ess t han 24 hours. The par t i es t o t he
cont ract have agreed, i n ef f ect , t o i gnore port worki ng days and t o
def i ne a l ayt i me day as runni ng cont i nuousl y f or 24 hours, except f or
any speci f i ed i nt errupt i ons. Once t he st udent of dry-cargo l ayt i me can
underst and t hi s poi nt , t he ef f ect of i nt errupt i ons on l ayt i me shoul d
ceases t o be a myst ery. Where the words 24 consecutive hours do not
appear, as occasionally happens by intent, although perhaps more often by
mistake, variations in todays practices may arise. The t erm weat her
worki ng day on i t s own wi t hout qual i f i cat i on i s i ndeed af f ect ed by t he
number of hours act ual l y worked i n a port . Shoul d bad weat her occur
out si de worki ng per i ods i n t he normal , non- worki ng and ot her wi se i dl e
t i me, l ayt i me wi l l not be af f ect ed. However, i f bad weat her occurs i n
normal worki ng t i me, even i f t he vessel was i dl e at t he t i me, l ayt i me wi l l
be i nt errupt ed and t he degree of i nt errupt i on has t o be reached by

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apport i oni ng worki ng t i me i n a por t agai nst a 24 hour day.

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Thus, and assumi ng port l abour works a 12 hour day, f rom 0700
hours unt i l 1900 hours : -
Layti me used

Day 1 : worked 0700/ 1900 = 1. 0 day = 24 hours
Day 2 : worked 0700/ 1900
rai n 2200/ 2400 = 1. 0 day = 24 hours

Day 3 : rai n 0001/ 2400 = 0. 0. day = 0 hours

Day 4 : rai n 0700/ 1900 = 0. 0 day = 0 hours

Day 5 : worked 0700 / 1300
rai n 1300/ 1900 = 0. 5 day = 12 hours

Day 6 : worked 0700 / 1000
rai n 1000 / 1900 = 0. 25 day = 6 hours

Day 7 : rai n 0700 / 1000
worked 1000 / 1900 = 0. 75 day = 18 hours

Si nce t he case of t he VORRAS , t he t erm worki ng days, whet her
permi t t i ng shoul d be t aken t o be t he same as f or t he above exampl e,
and t he t erms weat her worki ng days of 24 hours and worki ng days of
24 hours, weat her permi t t i ng ( i . e. wi t hout t he al l - i mport ant conecut i ve )
must al so be t reat ed i n t he same manner .
Breakdowns: I t i s reasonabl e t hat i f a vessel s gear i s bei ng used and
i t breaks down, l ayt i me shoul d not cont i nue dur i ng t he peri od of
breakdown. I t may be t hat , f or exampl e, one crane out of f our has
broken down and, i n such a case, appor t i onment of t he degree of l oss

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must be carri ed out . I n t hat rel at i vel y si mpl e exampl e, l ayt i me woul d
cont i nue at a rat e of 75% unt i l t he cr ane i s repai r ed.
There are, however, shore breakdowns, and i t may be t hat t he
shi powners have knowi ngl y or unwi t t i ngl y assumed responsi bi l i t y f or
t hese i n t hei r cont ract . Ref er, f or exampl e, t o cl ause 4, l i ne 33, of t he
AMWELSH chart erpart y and t here t he words beyond Chart erers
cont rol ef f ect i vel y mean j ust t hat under Engl i sh l aw. Thus a shor e
crane breakdown t hat i s j udged t o be beyond chart er ers cont rol (i . e.
Chart erers do not own or ot her wi se cont rol t he crane) s uch a break-
down wi l l , t heref ore, i nt errupt l ayt i me. Under Amer i can l aw i t may be
t hat t he al t ernat i ve vi ew woul d be uphel d, i n shi powners f avour,
al t hough t hat i s not compl et el y cert ai n. The AMWELSH i s not a l one
exampl e of t he i ncl usi on of t he words beyond Chart erer s cont rol ,
t here bei ng several wi del y-used f orms cont ai ni ng t hi s expressi on t o
si mi l ar ef f ect .
Cessati on: Gener al l y, dr y-cargo l ayt i me ceases si mul t aneousl y wi t h t he
t ermi nat i on of cargo-operat i ons i . e. as l oadi ng i s compl et ed.
Occasi onal l y, however, speci al cargo work such as t ri mmi ng, l ashi ng or
secur i ng wi l l be necessar y, t he t i me f or whi ch woul d reasonabl y be
added t o l ayt i me. Most chart erpart i es ar e si l ent al so on t he ef f ect on
l ayt i me of t i me t aken f or readi ng draf t s, perhaps an essent i al act i vi t y
bef ore bi l l of l adi ng wei ght can be assessed. Usual l y, Chart erers wi l l
recogni ze t hi s act i vi t y as essent i al and i ncl ude same as l ayt i me,
especi al l y si nce i t normal l y i nvol ves a rel at i vel y short t i me. Ever y now
and t hen, however, a draf t survey i s ser i ousl y i mpeded by, f or exampl e,
bad weat her, and t here mi ght wel l be a di sput e bet ween t he part i es
unl ess t he cont ract speci f i es whet her t i me devot ed t o ascert ai ni ng a
vessel s draf t shoul d count as l ayt i me or not .
Cal cul ati on: Thi s can usef ul l y be sub-di vi ded i nt o t he f ol l owi ng
cat egori es: -

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Damages f or Det ent i on
Demurrage

Despat ch

Averagi ng l ayt i me
But bef ore exami ni ng each of t hese f our cat egori es, i t i s
i mport ant at t hi s st age t o exami ne t i me sheet s . Armed wi t h a st at ement
of f act s and t he rel evant chart erpart y, t he cal cul at or havi ng reached
t hi s sevent h st age can move on t o usi ng a t i me sheet t o compi l e t he
l ayt i me cal cul at i on. A t i me sheet i s a document showi ng l ayt i me
ut i l i zed, t aki ng i nt o account al l t he f act ors ment i oned i n t h i s Lesson,
bef ore arri vi ng at a bal ance of di spat ch money i n f avour of chart erers,
or demurrage money i n f avour of owners/ operat ors. They ar e based on
i nf ormat i on suppl i ed f rom t he st at ement of f act s as i nt erpret ed by t he
rel evant l ayt i me cl auses i n t he gover ni ng cont ract , t hemsel ves
i nt erpr et ed by knowl edge of t he l aw rel at i ng t o l ayt i me. As i n t he case of
st at ement of f act s, BI MCO produce a st andard t i me sheet f orm whi ch i s
avai l abl e f or use wor l dwi de, and t hi s i s reproduced under Appendi x 6. 2.
Damages for Detenti on: I f chart erers f ai l t o abi de by t he pr ovi si ons of
a cont ract and, as a resul t , permi t t ed l ayt i me i s exceeded, shi powners
are normal l y ent i t l ed t o rei mbur sement f or t hei r l oss, i f any. One
met hod of rei mbursement coul d be by cl ai mi ng damages f or det ent i on ,
however t hi s coul d be a l engt hy and cost l y l egal exerci se.
Consequent l y, most part i es t o a shi ppi ng cont ract avoi d t he probl em by
negot i at i ng a dai l y l evel of l i qui dat ed damages i . e. demurrage f or
t he t i me spent i n excess of agreed l ayt i me.
Demurrage: When al l permi t t ed l ayt i me i s used bef ore t he compl et i on
of cargo operat i ons, and t he part i es t o a cont ract have f oreseen t hi s
possi bi l i t y, i t i s usual t hat a gover ni ng cont ract wi l l provi de f or
demurrage t o be pai d t o t he shi powners. The amount of demurrage i s
negot i at ed wi t h t he cont ract and i s usual l y descri bed as $ per day

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or pro rat a f or part of a day. (Ver y occasi onal l y demurrage mi ght be
descr i bed as $ x cent s per t on but i n such a case i t i s vi t al t o est abl i sh
whet her t he t on ref ers t o a summer deadwei ght t onnage of t he shi p
i nvol ved, or per car go t on , or per regi st ered t on , and whet her met ri c
or l ong, gross or net t ). Usual l y address commi ssi ons and brokerages
are deduct i bl e f rom demurrage payment s, j ust as i n t he case of f rei ght
or deadf rei ght but t hi s has t o be cl ear l y st at ed i n t he
commi ssi on/ br okerage cl ause(s).
Demurrage i s i nt ended t o ref l ect t he dai l y r unni ng cost of a
vessel , i ncl udi ng port bunker consumpt i on, and where appl i cabl e, a
reasonabl e prof i t l evel . Shi ppi ng bei ng a f ree market, however, and
exposed t o market f orces and necessi t i es, t here may be occasi ons when
shi powners accept l ow or negot i at e hi gh demurrage rat es. Once l ayt i me
has been f ul l y used, demurrage shoul d normal l y run cont i nuousl y, ni ght
and day, weekend and worki ng per i od, wi t h no i nt errupt i ons unt i l cargo
work i s compl et ed unl ess t he cont ract expr essl y provi des ot her wi se eg
shi f t i ng t i me f rom anchorage t o bert h not t o count as l ayt i me or as t i me
on demurrage . Normal l y, however, l ayt i me i nt err upt i ons such as bad
weat her, weekends and hol i days, wi l l not i nt erf ere wi t h demurrage t i me,
al t hough breakdowns on a vessel af f ect i ng di scharge wi l l i nt errupt
demurrage t i me. Gi ven t hese except i ons, i t can usual l y be sai d t hat t he
wel l -known shi ppi ng expressi on; once on demurrage, al ways on
demurrage means what i t says.
Despatch: I t i s ver y of t en agreed t hat i f a vessel compl et es cargo
operat i ons wi t hi n t he avai l abl e l ayt i me, t he chart erer wi l l be rewarded
by t he payment of di spat ch money, whi ch i s normal l y set at hal f t he
dai l y rat e of demurrage. I t shoul d be borne i n mi nd, however, t hat a ver y
f ew chart erers eg cert ai n Chi nese Chart erers negot i at e t hat dai l y
di spat ch i s t he same as dai l y demur rage, whi l st f or vessel s t hat
normal l y mi ght except a f ast t urn-round i n port eg ro-ro shi ps, car
carri ers, or coast ers i t i s not at al l unusual f or t he cont ract t o speci f y
f ree despat ch i . e. no di spat ch at al l . However, no addr ess

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commi ssi ons or br okerages are payabl e on di spat ch money.Where
di spat ch i s payabl e, i t can be sub- di vi ded as bei ng payabl e on al l t i me
saved, or on worki ng t i me, or l ayt i me saved.
I t i s perhaps easi er t o underst and di spat ch on al l t i mes saved by t he
used of an exampl e.
The HERON compl et es l oadi ng at 1200 hours on a Fr i day, her
chart erpart y bei ng per weat her worki ng day of 24 consecut i ve
hours, Sat urdays, Sundays and Hol i days except ed, even i f used .
Thus l ayt i me woul d be suspended i n normal ci rcumst ances f rom
Fri day 2400 hours t hrough t o Monday 0001 hours. At 1200 hours
on Fr i day t here are 3 days of l ayt i me r emai ni ng and, si nce t he
t erm al l t i me saved means exact l y what i t says, t he cal cul at or of
l ayt i me has t o base f i gures on t he hypot het i cal case t hat i f t he
vessel had not compl et ed l oadi ng on t he Fri day at 1200 hours,
but had remai ned i n port worki ng cargo when woul d l ayt i me have
been f ul l y used?
Despatch would thus be calculated in the following fashion:-
Al l Ti mes Saved l ayti me

Fri day 1200/ 2400 hours 12 hours
Sat urday 0000 / 2400 0 hours
Sunday 0000 / 2400 0 hours
Monday 0000 / 2400 24 hours
Tuesday 0000 / 2400 24 hours
Wednesday 0000 / 1200 12 hours

5 days 3 days
Al l owi ng f or t he weekend t hat has been saved by t he chart erers
due t o t hei r f urni shi ng bef ore t he expi r y of permi t t ed l ayt i me, t hey
have i n ef f ect , saved t he shi powner some 5 days and, under al l

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t i me saved t erms, are t hus ent i t l ed t o 5 days di spat ch.
Usi ng t he same exampl e, on t he basi s of worki ng t i me or
l ayt i me saved , onl y t he 3 remai ni ng days of l ayt i me woul d appl y
as di spat ch, despi t e weekends or hol i days or bad weat her or any
ot her f act or occurri ng once t he shi p had depart ed.
The quest i on remai ns, however, i s worki ng t i me saved t he same
as l ayt i me saved ? Wi t h l ayt i me descri bed as a day of 24
consecut i ve hours i t wi l l be t he same. Ot her wi se, i f one i s
i nvol ved i n apport i oni ng worki ng t i me i n t he manner shown f ewer
t han 5. 4 above, t hen di spat ch shoul d be apport i oned i n t he same
manner.
You wi l l readi l y see t hat despat ch on al l t i me saved f avour s t he
chart erer whi l st l ayt i me saved or worki ng t i me saved i s bet t er
f or t he owner; t he f ai rness of one ver sus t he ot her i s a per pet ual
debat e. The owners nat ural l y say t hat as l ayt i me except s cert ai n
peri ods l i ke Sundays and hol i days, t hen di spat ch shoul d be on
t he same basi s. The chart erer count ers t hi s by argui ng t hat a shi p
i s earni ng al l t he t i me she i s at sea regar dl ess of whi ch day of t he
week i t i s so t hat get t i ng t he shi p t o sea t hat much qui cker shoul d
reward t he chart erer f or every day wi t hout except i on.
One f i nal word about di spat ch. I t shoul d be borne i n mi nd t hat
some market s (eg bul k sugar) are based on l ayt i me f ar i n excess
of t he t i me act ual l y requi red t o perf orm cargo operat i ons. I t i s,
t heref ore, i mport ant f or shi powners t o t ake t hi s i nt o account whe n
negot i at i ng busi ness and t o ref l ect t he saved t i me as a despach
expense i n a voyage est i mat e.
Averagi ng Layti me : Thi s i s an overal l t i t l e whi ch shoul d i n real i t y be
sub-di vi ded i nt o Normal (or non reversi bl e ) l ayt i me, Reversi bl e and
Average

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Normal or Non-reversi bl e Layti me: I f not hi ng i s speci f i cal l y ment i oned
i n t he cont ract , and where l oadi ng and di schargi ng port l ayt i me
al l owances are separeat el y assessed, i t can be t aken t hat l ayt i me i s
normal or non-rever si bl e . The l ayt i me f or l oadi ng ort (s) and f or
di schargi ng port (s) are assessed ent i rel y separat el y and i t i s possi bl e
even t o cal cul at e, cl ai m, negot i at e and set t l e t he l oad port (s)
di spat ch/ demurrage sums bef ore even a vessel has r eached her
di scharge port (s).
Reversi bl e Layti me: Where al l owance f or bot h t he l oadi ng and
di schargi ng port s ar e added and cal cul at ed t oget her. Ei t her t he cont ract
may openl y be on r eversi bl e t erms wi t hout act ual l y st at i ng so eg 7
days, al l purposes , or 16 t ot al days or t here may be an express
cl ause gi vi ng t he chart erers t he r i ght or t he opt i on t o appl y reversi bl e
condi t i ons i f t hey so wi sh i n ot her wor ds, i f t hey cal cul at e i t t o be i n
t hei r f avour t o do so. Thus any l ayt i me saved f rom t he l oadi ng port s
can be carr i ed f or ward and added t o l ayt i me al l owed at t he port (s) of
di scharge.
Average Layti me: Ari ses where separ at e cal cul at i ons are per f ormed f or
t he l oadi ng and f or t he di schargi ng port s, wi t h t he f i nal resul t s f or each
bei ng combi ned i n order t o assess what i s f i nal l y due eg 2 days
demurrage at l oad port woul d be cancel l ed out by 2 days di spat ch at
di scharge port , even t hough t he dai l y val ue of demurrage may be t wi ce
t hat of di spat ch. At f i rst si ght i t may appear t here i s no di f f erence
bet ween t he appl i cat i on of reversi bl e and aver age l ayt i me. I n f act ,
di f f erences can ar i se and, wi t h t he same basi c f act s, i t i s possi bl e t o
reach t hree di f f erent resul t s by appl yi ng each of t he above al t ernat i ves.
Layti me Defi ni ti ons: Appendi x 6: 5 cont ai ns what i s known as The
Layt i me Def i ni t i ons 1980 , i n whi ch l ayt i me t erms have been def i ned by
a group of di st i nugui shed i nt ernat i onal shi ppi ng pract i t i oners. I t may be
f ound usef ul i n everyday l ayt i me cal cul at i ng. One word of warni ng,
however. The def i ni t i ons rel at e t o i nt ernat i onal pract i ce and not

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necessari l y t o a par t i cul ar code of l aw. Thus t here may be sl i ght but
si gni f i cant di f f erences bet ween t he def i ni t i ons appeari ng i n t hi s
document f rom l egal pract i ce i n a part i cul ar count r y eg def i ni t i on 9 i s
di f f erent f rom t he Engl i sh l aw cal cul at i ons.
NB : Anot her word of warni ng : Thi s l esson i s desi gned t o provi de you
wi t h an i nt roduct i on t o t hi s most compl i cat ed of subj ect s. Thi s l esson wi l l
not , however, have made you an expert . That can onl y come wi t h
exper i ence (some bi t t er) and by ext ensi ve readi ng. There are prob abl y
more ari t rat i on and court cases connect ed wi t h t i me count i ng t han any
ot her si ngl e aspect of chart erpart i es. One needs t o keep up t o dat e by
readi ng newspaper and magazi ne art i cl es. For exampl e, i n addi t i on t o
t he (many say per verse) j udgement i n t he case of t he VORRAS ref erred
t o earl i er, an apparent l y si mpl e di sput e r ecent l y went al l t he way t o t he
Engl i sh House of Lords. Thi s concer ned t he KYZI KOS whi ch had been
f i xed wi t h t i me commenci ng t o count wheat her i n port or not , whet her
i n bert h or not , whet her i n f ee prat i que or not and whet her cl eared at
t he Cust oms House or not . She had t o wai t f or t he bert h t o become f ree
so t i me st art ed t o count but when t he bert h became avai l abl e, t he shi p
was unabl e t o move i mmedi at el y because of f og. The chart erers argued
t hat bad weat her i mpedi ng navi gat i on was a shi p s concern so t i me
shoul d not count bet ween cal l i ng t he shi p ont o t he bert h and her act ual l y
get t i ng t here i ncl udi ng t he del ay caused by t he f og. The owners
cont ended t hat had t he chart er ers not been t ardy i n provi di ng a ready
bert h, t he f og woul d not have caused any t roubl e. I n t he event t hei r
Lordshi ps r ul ed i n chart erer s f avour. By no means ever y
commerci al / shi ppi ng person agreed wi t h t hat deci si on.
Sel f Assessment Questi ons
1. What event s can i nt errupt l ayt i me count i ng?
2. Does t i me cont i nue t o count i f shore cranes break down?

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3. What i s (a) demurrage and (b) di spat ch?
4. What i s meant by Reversi bl e Layt i me?

Sel f Assessment Questi ons
At t empt t he f ol l owi ng and check your answers f rom t he t ext of Chapt ers
Ni ne and Ten of CARGOES: -
1. What i s t he di f f erence bet ween cement and cement cl i nker?
2. What i s D. R. I . and what are t he probl ems associ at ed wi t h i t s
carri age?
3. On what condi t i ons woul d a shi powner probabl y i nsi st bef ore
agreei ng t o carr y f erro-si l i con?
Test Questi on
Havi ng compl et ed l esson si x at t empt t he f ol l owi ng and submi t your
answer t o your Cour se Tut or.
Set out a det ai l ed Ti me Sheet and cal cul at e Demurage or Despat ch
f rom t he f ol l owi ng i nf ormat i on cont ai ned i n a St at ement of Fact s.
M. V. OSPERY
Arri ved 0600 Thursday 9 Februar y
NOR t endered 0900 Thursday 9 Februar y
Hol ds passed by
I nspect or 1230 Thursday 9 Februar y

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NOR accept ed 1230 Thursday 9 Februar y
Loadi ng commenced 0700 Fr i day 10 Febr uar y
Loadi ng compl et ed 1515 Wednesday 15 Februar y
Sai l ed 0600 Thursday 16 Februar y

Cargo l oaded 22, 000 met ri c t ons.
C/ P sti pul ates: Layt i me t o commence at 1300 i f not i ce of readi ness
gi ven bef ore Noon, at 0700 next worki ng day i f gi ven af t er Noon : not i ce
t o be gi ven i n or di nary of f i ce hours . Layt i me shal l not commence t o
count bef ore hol ds are passed as cl ean by Shi ppers I nspect or.
Cargo t o be l oaded at t he rat e of 5000 met ri c t ons per weat her worki ng
day of 24 consecut i ve hours . Ti me f rom 1700 Fr i day or t he day
precedi ng a hol i day t o 0800 Monday or next worki ng day not t o count
unl ess used (but onl y act ual t i me used t o count ) unl ess vessel al r eady
on demurrage . Demurrage US $5000 per day and pro rat a / Despat ch at
hal f demurrage rat e on worki ng t i me saved .
Normal port worki ng hours at 0700 1700 Monday t o Fri day. On
Tuesday 14 Febr uary rai n st opped al l work i n t he port f rom 0700 t o
1130. The shi p worked f rom 07. 00 t o noon on Sat urday 11 Februar y, but
ot her wi se was not worked duri ng ot her except ed peri ods. Repai rs t o
vessel s auxi l i ar y engi ne del ayed sai l i ng af t er compl et i on of l oadi ng.
(NB : Appendi x 6: 3 wi l l hel p convert deci mal part s of a day t o hours and
mi nut es, and vi ce versa)
Noti ce of Readi ness
To Messrs ______________________
Not i ce of Readi ness

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Pl ease not e t hat t he shi p ____________________________ nationality :
______________ call sign : __________________ has arrived at
____________ on _______ at _______ hours, and in every respect ready to
commence loading/discharging a cargo of _________________, in
accordance with the terms and condi t i ons of t he Chart er Part y / Booki ng
Not e dat ed __________.
Ti me i s t o count as per t he t erms and condi t i ons of t he above
ment i oned Chart er Part y / Booki ng Not e.
Pl ease conf i rm recei pt of t hi s Not i ce of Readi ness by si gni ng and
ret urni ng t he copy at t ached.
Pl ace : __________ Dat e : _____________ hours.


___________________
Master/ Agent

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Layti me Defi ni ti ons 1980


The f ol l owi ng def i ni t i ons are wi del y accept ed by t he t rade, i n t he
absence of overri di ng condi t i ons t o t he cont rar y. They may be adopt ed
by t he part i es t o a chart er part y i n order t o avoi d di f f erences i n
i nt erpr et at i on. For exampl e, i n t he pr esent st at e of t he l aw, j udgment s
of t he Court do not equat e wi t h t he t r adi t i onal underst andi ng i n t he
market as set down i n Numbers 17 and 18. The agreement of t he
part i es, dur i ng Chart erpart y negot i at i ons, t o adopt t hose t wo def i ni t i ons
of i nt erpret at i on woul d overri de any common l aw j udgment .

Li st of Defi ni ti ons

1. Port 17. Weat her worki ng day of 24
2. Saf eport consecut i ve hours
3. Bert h 18. Weat her permi t t i ng
4. Saf e bert h 19. Except ed
5. Reachabl e on arri val or 20. Unl ess used
al ways accessi bl e 21. To average
6. Layt i me 22. Reversi bl e
7. Cust omar y di spat ch 23. Not i ce of readi ness
8. Per hat ch per day 24. I n wr i t i ng
9. Per working hatch per day or 25. Time lost waiting for berth to
per workable hatch per day count as loading/discharging
10. As f ast as t he vessel can t i me or as l ayt i me
recei ve / del i ver 26. Whet her i n bert h or not
11. Day or bert h no bert h
12. Cl ear day or Cl ear days 27. Demurrage
13. Hol i day 28. On demurrage
14. Working days 29. Despatch money or dispatch
15. Running days or consecutive 30. All time saved
days 31. All working time saved or

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16. Weat her worki ng day al l l ayt i me saved

Defi ni ti ons

1. Port means an area wi t hi n whi ch shi ps are l oaded wi t h and/ or
di scharged of cargo and i ncl udes t he usual pl aces where shi ps
wai t f or t hei r t urn or are ordered or obl i ged t o wai t f or t hei r t urn
no mat t er t he di st ance f rom t hat ar ea. I f t he word Port i s not
used, but t he port i s (or i s t o be) i dent i f i ed by i t s name, t hi s
def i ni t i on shal l st i l l appl y.
2. Safe port means a port whi ch, duri ng t he rel evant peri od of
t i me, t he shi p can reach, ent er, remai n at and depart f rom
wi t hout , i n t he absence of some abnormal occurrence, bei ng
exposed t o danger whi ch cannot be avoi ded by good navi gat i on
and seamanshi p.
3. Berth - means t he speci f i c pl ace where t he shi p i s t o l oad
and/ or di scharge.
4. Safe berth means a bert h whi ch, duri ng t he r el evant peri od
of t i me, t he shi p can reach, remai n at and depart f rom wi t hout , i n
t he absence of some abnormal occur rence, bei ng exposed t o
danger whi ch cannot be avoi ded by good navi gat i on and
seamanshi p.
*5. Reachabl e on arri val or always accessi bl e menas t hat
t he chart erer undert akes t hat when t he shi p arri ves at t he port
t here wi l l be a l oadi ng/ di schargi ng bert h f or her t o whi ch she can
proceed wi t hout del ay.
6. Layti me means t he peri od of t i me agreed bet ween t he part i es
duri ng whi ch t he owner wi l l make and keep t he shi p avai l abl e f or
l oadi ng / di schargi ng wi t hout payment addi t i onal t o t he f rei ght .

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7. Cust omary di spat ch means t hat t he chart erer must l oad
and/ or di scharge as f ast as i s possi bl e i n t he ci rcumst ances
prevai l i ng at t he t i me of l oadi ng or di schargi ng.
8 Per hat ch per day means t hat l ayt i me i s t o be cal cul at ed by
mul t i pl yi ng t he agreed dai l y rat e per hat ch of l oadi ng/ di schargi ng t he
cargo by t he number of t he shi p s hat ches and di vi di ng t he quant i t y of
cargo by t he resul t i ng sum. Thus :
Layt i me = Quant i t y of Cargo
--------------------------------------- = Days
Dai l y Rat e x Number of Hat ches

A hat ch t hat i s capabl e of bei ng worked by t wo gangs
si mul t aneousl y shal l be count ed as t wo hat ches.
9. Per worki ng hatch per day or per workabl e hatch per day
means t hat l ayt i me i s t o be cal cul at ed by di vi di ng t he quant i t y of
cargo i n t he hol d wi t h t he l argest quant i t y by t he resul t of
mul t i pl yi ng t he agreed dai l y rat e per worki ng or workabl e hat ch by
t he number of hat ches ser vi ng t hat hol d.
Thus
Layt i me = Quant i t y of Cargo
------------------------------- = Days
Dai l y Rat e per hat ch x Number of Hat ches
Ser vi ng t hat hol d

A hat ch t hat i s capabl e of bei ng worked by t wo gangs
si mul t aneousl y shal l be count ed as t o hat ches.
10. As fast as the vessel can recei ve/ del i ver - means t hat t he

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l ayt i me i s a per i od of t i me t o be cal cul at ed by ref erence t o t he
maxi mum rat e at whi ch t he shi p i n f ul l worki ng order i s capabl e of
l oadi ng/ di schargi ng t he cargo.
11. Day means a cont i nuous per i od of 24 hours whi ch, unl ess t he
cont ext . , ot her wi se requi res, runs f rom mi dni ght t o mi dni ght .
12. Cl ear day or cl ear days means t hat t he day on whi ch t he
not i ce i s gi ven and t he day on whi ch t he not i ce expi res are not
i ncl uded i n t he not i ce peri od.
13. Hol i day means a day of t he week or part (s) t her eof on whi ch
cargo work on t he shi p woul d nor mal l y t ake pl ace but i s
suspended at t he pl ace of l oadi ng/ di schargi ng by reason of t he
l ocal l aw or t he l ocal pract i ce.
14. Worki ng days means days or part (s) t hereof whi ch ar e not
expressl y excl uded f rom l ayt i me by t he chart erpart y and whi ch
are not hol i days.
15. Runni ng days or consecuti ve days means days whi ch
f ol l ow one i mmedi at el y af t er t he ot her.
16. Weather worki ng day means a worki ng day or pat of a
worki ng day dur i ng whi ch i t i s or, i f t he vessel i s st i l l wai t i ng f or
her t urn, i t woul d be possi bl e t o l oad/ di schage t he cargo wi t hout
i nt erf erence due t o t he weat her. I f such i nt erf erence occurs (or
woul d have occurred i f work had been i n progress), t here shal l be
excl uded f orm t he l ayt i me a peri od cal cul at ed by ref erence t o t he
rat i o whi ch t he dur at i on of t he i nt erf erence bears t o t he t i me
whi ch woul d have or coul d have been wor ked but f or t he
i nt erf erence

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17. Weather worki ng day of 24 consecuti ve hours means a
worki ng day or part of a worki ng day of 24 hours duri ng whi ch i t i s
or, i f t he shi p i s st i l l wai t i ng f or her t urn, i t woul d be possi bl e t o
l oad/ di scharge t he cargo wi t hout i nt erf erence due t o t he weat her.
I f such i nt erf erence occurs (or woul d have occurred i f work had
been i n pr ogress) t here shal l be excl uded f rom t he l ayt i me t he
peri od duri ng whi ch t he weat her i nt erf ered or woul d have
i nt erf ered wi t h t he work.
18. Weatheri ng permi tti ng means t hat t i me duri ng whi ch
weat her prevent s worki ng shal l ot count as l ayt i me.
19. Excepted means that the specified days do not count as laytime
even if loading or discharging is done on t hem.
20. Unless used means that if work is carried out during the expected
days the actual hours of work only count as l ayt i me.
21. To average means t hat separat e cal cul at i ons are t o be made
f or l oadi ng and di schargi ng and any t i me saved i n one oper at i on
i s t o be set agai nst any excess t i me used i n t he ot her.
22. Reversible means an option given to the charterer to add
together the time allowed for loading and discharging. Where the
option is exercised the effect is the same as a total time being
specified to cover both operations.
24 I n wri ti ng means, i n rel at i on t o a not i ce of readi ness, a
not i ce vi si bl e expressed i n any mode of reproduci ng words and
i ncl udes cabl e, t el egram and t el ex.
25 Ti me l ost wai ti ng for berth to count as l oadi ng/ di schargi ng
ti me or l ayti me means t hat i f t he mai n reason why a not i ce

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of readi ness cannot be gi ven i s t hat t here i s no l oadi ng /
di schargi ng bert h avai l abl e t o t he shi p t he l ayt i me wi l l commence
t o run when t he shi p st art s t o wai t f or a bert h and wi l l cont i nue t o
run, unl ess pr evi ousl y exhaust ed, unt i l t he shi p st ops wai t i ng.
The l ayt i me except i ons appl y t o t he wai t i ng t i me as i f t he shi p
was at t he l oadi ng/ di schargi ng bert h provi ded t he shi p i s not
al ready on demurrage. When t he wai t i ng t i me ends t i me ceases t o
count and rest art s when t he shi p reaches t he l oadi ng/ di schargi ng
bert h subj ect t o t he gi vi ng of a not i ce of readi ness i f one i s
requi red by t he char t erpart y and t o any not i ce t i me i f provi ded f or
i n chart erpart y, unl ess t he shi p i s by t hen on demurrage.
26 Whether i n berth or not or berth no berth means t hat i f
t he l ocat i on named f or l oadi ng/ di schargi ng i s a bert h and i f t he
bert h i s not i mmedi at el y, accessi bl e t o t he shi p a not i ce of
readi ness can be gi ven when t he shi p has arri ved at t he port i n
whi ch t he bert h i s si t uat ed.
27 Demurrage means t he money payabl e t o t he owner f or del ay
f or whi ch t he owner i s not responsi bl e i n l oadi ng and/ or
di schargi ng af t er t he l ayt i me has expi r ed.
28 On demurrage or di spatch means money payabl e by t he
owner i f t he shi p compl et es l oadi ng or di schargi ng bef ore t he
l ayt i me has expi red.
29 Al l ti me saved means t i me saved t o t he shi p f rom t he
compl et i on t o l oadi ng/ di schargi ng t o the expi r y of t he l ayt i me
i ncl udi ng peri ods except ed f rom t he l ayt i me.
30 Al l worki ng ti me saved or al l l ayti me saved means t he
t i me saved t o t he shi p f rom t he compl et i on of l oadi ng/ di schargi ng
t o t he expi r y of t he l ayt i me excl udi ng any not i ce t i me and peri ods

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except ed f rom t he l ayt i me.
* The def i ni t i on shoul d be used sel ect i vel y. For exampl e i n Numbers 5
and 26 t he words al ways accessi bl e and i mmedi at el y accessi bl e
mi ght , i n t he t rend of recent j udgment s, be i nt erpret ed as meani ng t hat
al t hough a bert h i s f ree any del ay t o t he vessel i n reachi ng i t (bad
weat her, short age of pi l ot s, st ri kes of tugmen) woul d be t he ri sk of
chart erers (not t he t r adi t i onal market approach).

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CHAPTER- 7
VOYAGE ESTI MATI NG
Voyage est i mat i ng i s an i mport ant ski l l f or al l persons engaged i n
t he act i vi t y of dry- cargo chart eri ng, whet her f rom an owner s or a
chart erer s perspect i ve, even f or compet i t i ve br okers. I t i s common
t hese days f or chart erers t o undert ake cont ract s, t o rel et t onnage and
t o t ake i n vessel s not owned by t hem, on voyage or on t i mechart er,
whereas compet i t i ve brokers need t he abi l i t y t o eval uat e pot ent i al
busi ness, t o enabl e t hem t o present out wardl y unat t ract i ve cargoes and
vessel s i n t hei r t rue l i ght . So i t i s not onl y t hose cl osel y associ at ed wi t h
t he cont rol of t onnage t hat need t he knowl edge abi l i t y t hi s l esson set s
out t o hel p you acqui re.
The f i rst essent i al i n voyage est i mat i ng i s t o exami ne t he subj ect
headi ng i t sel f . Despi t e t he ref erence t o voyage , voyage est i mat i ng wi l l
i nevi t abl y i ncl ude t he real i st i c val uat i on of t i mechart er t ri ps, si nce t hese
are rarel y as f i nanci al l y st rai ght f orward as t hey f i rst mi ght appear. The
work est i mat e speaks f or i t sel f and, whi l st we have no wi sh t o promot e
i naccuracy, i t i s necessar y t o poi nt out t hat shi ps do not run l i ke
cl ockork and i t i s, t heref ore, i mpossi bl e t o cal cul at e t o perf ect i on. That
i s not t o suggest t hat one s ai m shoul d be l ess t han t ot al accuracy, and
i t i s essent i al t o do best t owards achi evi ng a real i st i c apprai sal of t he
pot ent i al wort h of any pr oposed vent ure. Vessel f i xed on FI OT t erms
wi t h rel evant cl auses readi ng
USNH (Uni t ed St ates, North of Cape Hatt eras) say Hampton Roads
and Rott erdam, l asts f or 11 days i n good weat her. Under thi s rel at i vel y
si mpl e system, represent at i ve voyages can be cal cul at ed and
memori zed. Provi ded you remember t o correct t he t i me al l owed i n
accordance wi t h vari ous speeds, t hi s shoul d make t he task much easi er
than ot herwi se mi ght be t he case.Havi ng establ i shed a method of
cal cul at i ng the l ength of a sea-passage, we can next consi der t he basi c

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el ements of a voyage est i mat e and produce a skel et on on whi ch t o hang
the f l esh of any part i cul ar cal cul at i on. But bef ore we st art on exami ni ng
the make-up of an est i mate i t i s as wel l to determi ne j ust how i t wi l l be
produced.
Computerisation As i n many wal ks of l i f e, t here are now some very
sophi st i cated and user -f ri endl y voyage est i mat i ng programmes avai l abl e
f or general use, or even astut e col l eagues who can use t hei r computi ng
tal ent s t o desi gn personal i zed programmes i n house . Neverthel ess, i t i s
vi t al that t hose sett i ng out di l i gent l y to l earn about voyage est i mat i ng
l earn t he basi cs and t hat i s made very much easier by starting with hand-
produced calculations prepared by no more sophisticated a method than
brainpower, pencil and paper, aided where necessary by pocket calculator;
after all, that is how navigators are trained. The ai m shoul d be f or st udent s of
voyage est i mat i ng to bui l d up conf i dence by the knowl edge that i f
necessary and the computer goes down , a rel ati vel y accurate voyage
est i mate can be hand-prouced i n reasonabl e t i me.
Estimate Form It wi l l hel p you consi derabl y i n produci ng consi stent
est i mates t o use a standard esti mate f orm f or each cal cul at i on. Appendi x
7: 1 provi des a sampl e f rom cont ai ni ng al l the necessary el ements, and i t
may be t hat you wi l l di scover that f orm provi des you wi th al l t hat i s
requi red f or successf ul voyage est i mat i ng throughout your career. Not
onl y that, but t he f orm neat l y sub-di vi des i nto the f i ve st ages of voyage
est i mat i ng: -
Itinerary
1. CARGO QUANTITY
2. EXPENSES
3. I NCOME
4. RESULT

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A voyage est i mate consi sts broadl y of i ncome mi nus expendi t ure, l i ke
any prof i t and l oss account. Whi ch f orm of procedure you use i s,
however, a matt er of personal pref erence, but al l can be cl assi f i ed under
the headi ng of met hod . It i s easy to reduce an est i mate to the back of
an envel ope and, i ndeed, t here may be i sol ated occasi ons when speed of
negot i at i ng wi l l make thi s a necessi t y. But i f al l the vari ous el ements are
set out i n f ront of you, i t i s f ar more di ff i cul t to overl ook the odd,
i mportant i tem, whi ch can make al l t he di f f erence bet ween prof i t and
l oss. So whether you i ntend t o undertake voyage est i mat es regul arl y or
si mpl y f or the i ni t i al purposes of thi s course, sel ect a sui t abl e f orm and
use i t consi st ent l y. Usual l y i s an I nst i tut e exami nati on i nvol vi ng voyage
est i mat i ng, a bl ank form wi l l be provi ded f or a candi dat e s use. However
an est i mat e can qui te, adequatel y be made on pl an paper. The vi t al thi ng
i s t o acqui re met hod . In t hi s Lesson, theref ore, we wi l l be f ol l owi ng the
st ages l i st ed above and, i ndeed, the l ater exampl es are used on t hat
system.
Stage 1: Itinerary
Thi s f i rst stage of any voyage esti mate maps out the proposed
empl oyment and can i tself be sub-di vi ded i nt o : -
Voyage pl an
Durat i on
Bunker Consumpt i on
Thi s wi l l enabl e you to see at a gl ance j ust what i s to be est i mat ed, and
can be cal l ed the i t i nerary .

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Of course you wi l l need t o know detai l s about the vessel i tsel f , i ts
deadwei ght and draf ts, cubi c capaci t i es and speed and consumpt i ons of
f uel oi l and di esel oi l . Perhaps more, dependi ng upon t he compl exi t y of
the cal cul at i on that i s requi red or the commodi t y t o be carri ed.The most
i mportant poi nt i s al ways to work i n the same way, so as to avoi d
conf usi on, and i t i s recommended that the commencement of a voyage
shoul d al ways be f rom the pl ace where the vessel compl et es di scharge
of her previ ous cargo, al l owi ng f or t he t i me and costs agai nst the
previ ous voyage, al l owi ng f or t he t i me and costs spent l eavi ng t he l ast
di scharge port to be cost ed agai nst t he previ ous voyage. I n t hi s manner,
the f i rst part of the voyage wi l l be a bal l ast l eg, commenci ng wi t h
droppi ng t he out ward port pi l ot, unl ess t he shi powner or operator i s
f ortunate enough t o f i nd a cargo f rom t he port i n whi ch t he vessel has
j ust di scharged. A f ew est i mat ors commence thei r est i mat es at a l oadi ng
port and f ol l ow the l aden passage wi t h a t heoret i cal bal l ast l eg back to
the same l oadi ng port. However, si nce tramp dry-cargo vessel s rarel y
proceed agai n on t he same voyage, t hi s i s hardl y a pract i cal al ternat i ve
to the more l ogi cal met hod of commenci ng f rom where a vessel i n open
and seeki ng next empl oyment i .e. upon compl et i on of the previ ous
empl oyment.Turni ng once agai n to the bl ank sampl e est i mat i ng f orm and
wi t h di stance t abl es to hand, i t i s not di ff i cul t to est i mate t he l ength of
bal l ast and l aden voyage l egs, t o pl an out t he sea-ti me and rout es of t he
est i mates, and t o f i l l i n t he appropri ate boxes.When attent i on i s di rect ed
at port t i mes, however, i mmedi ate di ff i cul t i es are encountered. Unl i ke
tankers, dry-cargo voyages vary enormousl y i n t hei r port t i me conent.
The di ff i cul t y i s that of ten one cannot cal cul ate port t i me unt i l cargo
quant i t y i s known, and cargo quant i t y cannot be cal cul at ed unti l an
assessment i s made of the bunker quant i t y remai ni ng on board at
strategi c poi nts i n the proposed voyage, and thi s cannot be properl y
cal cul ated unt i l voyage durat i on i s assessed. Fort unatel y, even when
worki ng al l cargo gear, dry-cargo vessel s normal l y consume very smal l
quant i t i es of bunkers i n port and so port bunker consumption can largely be
overlooked for the purposes of cargo quantity estimation. Nevertheless, it may
sometimes be necessary temporarily to postpone completion of the itinerary
section of an esti mate unt i l t he cargo cal cul at i on i n St age 2 has been

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concl uded. Be very caref ul al so over the route sel ected. Someti mes there
are al t ernat i ves and onl y a margi nal di ff erence wi l l till the balance in favour
of one route or another. Bad weather at certain times of the year; high canal
tolls on one route; cheaper bunkers on another. All factors must be considered.
As an example, consider for a moment the alternatives for an estimator of a
vessel proceeding from the United States Gulf (say from New Orieans) to
Singapore.
Alternative 1: Via Gibraltar & the Suze Canal 11461 miles
Alternative 2: Via Panama Canal 11905 miles
Alternative 3: Via Cape of Good Hope 12951 miles
On t he f ace of i t , Al t ernat i ve 1 seems t he bet t er sel ect i on. But
t hi s i s t o over l ook t he cost of canal t ol l s and al l owances f or canal
t ransi t del ay i n compari son wi t h t he l onger but probabl y cheaper Cape
of Good Hope rout e. But i s t i me of t he essence? I s i t necessar y t o
compl et e t he voyage as qui ckl y as possi bl e? I n whi ch case t he
est i mat or may have l i t t l e choi ce but t o proceed by t he shor t est , more
expensi ve rout e.
Speed may, i n f act , be an i mport ant f act or. I n some cases i t may be
more cost -ef f ect i ve t o proceed more sl owl y and t o economi se on
bunkers. Part i cul ar l y mi ght t hi s be so where bunkers are expensi ve and
f rei ght rat es are l ow, or i n coast al est i mat i ng, where voyages ar e
f requent l y dependent on t i dal dept hs. There may be l i t t l e poi nt i n
st eami ng f ul l speed, onl y t o have t o awai t a sui t abl e t i de f or some hours
f ol l owi ng arri val of f port . On t he ot her hand i f an earl y arr i val of f a port
means t he mast er can t ender not i ce of readi ness t hat much sooner, i t
may st i l l be more cost advant ageous t o proceed at f ul l speed.
Canal transi t durat i on must al so be cal cul at ed. Al t hough usual l y
wi t hout i nci dent , occasi onal l y t he t ransi t of vessel s t hrough canal s i s
seri ousl y di sr upt ed, and al t hough t here i s usual l y l i t t l e not i ce of such
event s, somet i mes i t i s common knowl edge t hat del ay can be

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ant i ci pat ed and t hei r ef f ect shoul d be t aken i nt o account .
Mul ti pl e ports wher e a vessel has t o cal l at , say several l oadi ng and/ or
di schargi ng port s, means ext ra t i me shoul d be al l owed f or del ays i n
ent eri ng and l eavi ng each port .
Bunkeri ng cal l s can on occasi on be l engt hy, but general l y i t i s
appropr i at e t o al l ow hal f an ext ra day (pl us i dl e port consumpt i on of
bunkers) i n an est i ame.
Bad Weather does not normally affect the drafting of a voyage estimate
unless it is certain from the nature of the trade that delays wi ll be
experienced, either at sea or in port .
Bunker Consumpti on When al l di st ances and t i mes are cal cul at ed, i t
shoul d be possi bl e t o cal cul at e est i mat ed bunker consumpt i on bot h at
sea and in port, and to conclude this stage o the estimate, although
allowance must also be made for a vessels bunker consumption through
the confined waters of a canal, as this may bear little resemblance to
normal consumption whilst steaming in un-obstructed waters at sea.
Stage 2 : Cargo Quanti t y As we have seen, cargo quant i t y may
subst ant i al l y af f ect ti me spent i n port by a dry cargo vessel , and i t may
f i rst be necessar y t o cal cul at e t hi s bef ore bei ng abl e t o ent er port t i me
i n St age 1 above. On t he assumpt i on t hat t here are no dr af t l i mi t at i ons
anywhere on a voyage, i t may be suf f i ci ent j us t o know a vessel s
avai l abl e deadwei ght i n order t o assess cargo capaci t y, ot her wi se
adj ust ment s must be made i n accordance wi t h avai l abl e dr af t . From t he
event ual avai l abl e t onnage must be deduct ed t he vessel s const ant
wei ght s (consi st i ng of st ores, f resh wat er l ubri cant s, spares even t he
wei ght of t he crew) . A vessel s const ant wei ght i s rar el y cri t i cal but
must be account ed f or. (For vessel of around 15/ 25, 000 t onnes sdwt i t
wi l l be about 250/ 350 t onnes and, f or vessel s i n excess of , say 35, 000
t onnes, some 4/ 500 t onnes). The ot her i mport ant deduct i on i s t hat of

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bunkers remai ni ng on board a vessel , and here i t may be necessar y t o
obt ai n appropr i at e dat a f rom t he vessel s managers or f rom her Mast er.
Bunker cal cul at i on can be ext remel y compl i cat ed and we wi l l exami ne
t hi s i n mor e det ai l l at er i n t hi s Lesson. Suf i ce at t hi s st age of t he
Lesson t o be awar e of bunkers const i t ut i ng a maj or consi der at i on. I n t he
meant i me, l et us assume we have r eached a sui t abl e f i gure f or
deadwei ght cargo capaci t y. Regret t abl y t hi s i s not t he end of t he
probl em. Our vessel may be abl e t o l i f t t he wei ght of X amount of
t ones of cargo, but has she t he space t o cont ai n i t ? Thus i s t he poi nt at
whi ch t he i mport ance of cargo st owage f act ors we f i rst met i n Lesson
Two ent ers i nt o our consi derat i on. I n t heory, by di vi di ng a vessel s grai n
or her bal e capaci t y by t he st owage f act or of t he cargo t o be l oaded, we
reach vol ume capaci t y. Thi s maxi mum amount of cargo that can be
carri ed wi t hi n avai l abl e cargo compart ment space must t hen be
compared wi t h t he avai l abl e cargo wei ght . The smal l er quant i t y i s t he
rest ri ct i on wi t h whi ch t he vessel s operat ors must compl y. I t i s normal l y
t he avai l abl e deawei ght whi ch proves t o be t he l i mi t i ng f act or but ,
occasi onal l y, a hi gh st owi ng cargo such as coke or cert ai n agri cul t ural
product s (see exampl es i n CARGOES ) wi l l rest ri ct t onnage i nt ake.
Al so i t may be necessar y t o l oad sever al grades or t ypes of cargoes,
each requi r i ng a separat e cargo compart ment and possi bl y causi ng,
t heref ore, an i nabi l i t y t o use al l a shi p s cargo space. The voyage
est i mat e f orm provi des space f or draf t, deadwei ght and cubi c capaci t y
cal cul at i ons under t he appr opri at e headi ng. Fi nal l y, i t may be t hat a
vessel cannot be l aden t o her f ul l avai l abl e draf t at t he port of l oadi ng,
because of t he necessi t y of crossi ng rest ri ct ed l oadi ng zones en rout e
t o t he port (s) of di scharge. A vessel cannot ent er a wi nt er l i ne, f or
exampl e, when l oaded t o summer marks and t hereby submer gi ng wi nt er
f reeboard. The cargo cal cul at i ons sect i on of t he est i mat e f orm makes
al l owance f or l oadl i ne consi derat i ons and f or deduct i ons f rom t he
appropr i at e deadwei ght t onnage of bunker quant i t y remai ni ng on board,
and f or const ant wei ght s. However, knowl edge of l oadl i ne zones i s
essent i al . Maps can be obt ai ned showi ng t hese, and t he subj ect i s
covered i n Lesson Ni ne of t hi s course.

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Ti me i n Port Whi ch bri ngs us back t o St age 1 si nce, knowi ng t he car go
quant i t y as wel l as t he l oadi ng/ di schargi ng rat es per day of t he
proposed cargo, i t i s now possi bl e t o deduce port t i me wi t h some
accuracy, t o ent er t he i nf ormat i on i n t he appropr i at e boxes of t he
est i mat e f orm, and t o cal cul at e port bunker consumpt i on. However, as
al ways i t seems, t here may be f urt her pi t f al l s t o avoi d. As we have seen
f rom t he previ ous Lesson on Layt i me, weekends and hol i days wi l l
f requent l y not count as l ayt i me i n dr y-cargo shi ppi ng and, i n f act , dry-
cargo shi ps are of ten l ef t i dl e and unworked dur i ng such peri ods.
Moreover t her e may be weat her del ays, t he ef f ect of whi ch i t may be
reasonabl e t o ant i ci pat e and t o al l ow f or by an adj ust ment i n expect ed
port t i me.
Let us take an exampl e:
m. v. KI NGFI SHER i s t o l oad 35, 000 t onnes of car go, t he c/ p
l oadi ng rat e bei ng 2, 500 t onnes per weat her worki ng day of 24
consecut i ve hours, Sat urdays Sundays and Hol i days except ed.
By di vi di ng 35, 000 by 2, 500 we cal cul at e t hat t he l oadi ng t i me
al l owed t o chart erer s i s 14 days. Thi s cal cul at i on, however , i s t o
be conduct ed on t he basi s of Sat shex t erms.
Thus, i f we excl ude Sat urdays, Sundays and Hol i days we are l ef t
wi t h approxi mat el y a f i ve day week, and t he real permi t t ed
l ayt i me approaches t hree weeks. I f al l owances are made al so f or
not i ce t i me and f or some ot her i nt er rupt i ons, i t wi l l become
real i st i c t o al l ow some 20/ 21 days i n por t f or l oadi ng.
I f l oadi ng i s t o t ake pl ace over some i mport ant publ i c hol i day eg
Chri st mas and New Year, or i n Mosl em Count r i es, dur i ng t he
f ast i ng peri od of Ramadam, even mor e port t i me shoul d be
al l owed.

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Al t ernat i vel y, i f al l owed t i me i s descri bed as shi nc not sat shex ,
l ess al l owance wi l l be needed, perhaps 15 days maxi mum. Even
wi t h shi nc t erms, however, t here wi l l be i nevi t abl e del ays on
arri val , f or shi f t i ng, wai t i ng f or t i des, et c.
As a rul e of t humb t here i s a magi c f ormul a t hat can be used t o
cal cul at e overal l port t i me i n normal shex/ f hex ci rcumst ances
and t hat i s t o mul t i pl y t he ori gi nal f i gure by a f act or of 1. 4. Thus,
t aki ng t he KI NGFI SHER , 35, 000 t onnes di vi ded by 2, 500 = 14
days x 1. 4 = 20 days, and t hat l at t er f i gure shoul d be ent er ed i n
t he est i mat e box under l oadi ng port t i me, on whi ch l oadi ng port
bunker consumpt i on shoul d be based.

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Thi s syst em i s perf ect l y adequat e f or most occasi ons and, in
general, the full time allowance should be placed in our estimate form
and allowance for demurrage and/or dispatch should be ignored.
Unfortunately, very little is straightforward in shipping, and different
criteria have to be used for what are termed demurrage or despatch
t rades.
Demurrage Trades Ever y now and t en a cargo i s market ed where t hose
i nvol ved are f ul l y aware t hat l ayt i me wi l l be exceeded and demurrage
wi l l accrue. I n such a case, f ul l est i mat ed port t i me shoul d be
cal cul at ed, i ncl udi ng f ul l al l owance f or weekends and hol i days occurri ng
duri ng l ayt i me. I n t hi s way t he real i st i c overal l voyage t i me wi l l be
recorded i n t he est i mat e and, f rom an assessment of f ul l l ay t i me (pl us
al l owances f or weekends and hol i days an shown above) demurrage ca
be cal cul at ed. Thi s ant i ci pat ed demur rage i ncome shoul d t hen be
i ncorporat ed wi t h f rei ght i ncome shoul d t hen be i ncorpor at ed wi t h
f rei ght i ncome (per haps bei ng ent ered i n our voyage est i mat e f orm i n
t he second l i ne of t he gross f rei ght box). To t hi s shoul d be appl i ed
commi ssi on (as f or f rei ght ) whereaf t er t he net t amount shoul d be added
t o net t f rei ght .
Despatch Trades There are cert ai n t rades bul k sugar i s one wher e
i t i s wel l known i n t he dr y-cargo f rei ght market t hat shi ps habi t ual l y l oad
(or di scharge) wel l wi t hi n t hei r permi t t ed l ayt i me and, i ndeed, Shi ppers
(or recei vers) expect t o earn consi derabl e di spat ch money. I n order t o
ensure t hat an est i mat e f or a despat ch t rade shows a r eal i st i c resul t ,
t he act ual expect ed port t i me shoul d be ent ered i n t he i t i ner ary sect i on,
wi t h t he amount cal cul at ed t o be payabl e f or di spat ch ent ered as an
expense.
Stage 3: Expenses Thi s t hi rd st age i s where al l t he var i ous cost s t hat
can be f oreseen ar e col l at ed and anal ysed. The voyage est i mat i ng f or m
i n Appendi x 7: 1 l i st s vari ous headi ngs, and here wi l l be f ound spaces
f or obvi ous cost s such as port di sbursement s and canal t ol l s, as wel l as

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t he not so obvi ous regardi ng ext ra i nsurance premi ums, st evedor i ng
cost s, et c. Perhaps t he maj or cost i t em, however, wi l l be f ound t o be
t hat of bunkers.
Bunkers. Bunkeri ng a vessel i s an art , and no t wo voyages are l i kel y t o
be exact l y t he same, due t o seasonal changes, pri ce f l uct uat i on, and
t he need t o bal ance f uel pri ces agai nst f rei ght i ncome. I t can somet i mes
be more f i nanci al l y benef i ci al t o t ake l ess cargo i n a port where bunkers
are cheap and t o f i l l up wi t h bunkers i nst ead. One must al so t ake i nt o
consi derat i on l i mi t at i ons i mposed by l oadl i nes agai nst t he need or
desi rabi l i t y t o t ake bunkers enrout e. At f i r st gl ance, i t may seem
advant ageous t o cal l f requent l y at bunkeri ng port s t o short en t he
i nt ermedi at e st eami ng t i me and bunker quant i t y requi rement s, t hereby
maxi mi zi ng cargo i nt ake. But no shi powner wi l l i ngl y put s i nt o port
unl ess absol ut el y necessar y, because of t he ext ra t i me, ri sk and
expense i nvol ved. A shi p earns money onl y when l aden and at sea i s
a ver y accurat e maxi m. However, i n t hi s era of wi l dl y f l uct uat i ng bunker
pri ces, of t en purel y as a resul t of unexpect ed pol i t i cal deci si ons rat her
t han because of di scernabl e economi c t rends, bunker programmi ng i s
not t he st rai ght f orward case one mi ght ot her wi se expect . The best
advi ce i n pract i ce i s t o obt ai n repr esent at i ve pr i ces an rout e i f t i me
permi t s, ot her wi se t o base t he est i mat e on t he pr i ce and quant i t y
requi red at t he l oadi ng port and t o t reat cheaper bunkers di scovered
l at er i n t he voyage as a bonus.Where a vessel i s l i kel y t o spend some
t i me i n port where bunkers are di f f i cul t and/ or expensi ve t o obt ai n, i t i s
essent i al t o prepl an your st rat egy and t o arri ve wi t h suf f i ci ent quant i t y
on board so as t o avoi d t he necessi t y t o ref uel . Saf et y sur pl us quant i t y
wi l l be needed and t he amount requi red f or t hi s purpose wi l l need t o be
j udged by exper i ence and knowl edge of t he condi t i ons l i kel y t o be
encount ered and t he avai l abi l i t y enrout e of al t ernat i ve bunker suppl i es.
Port charges cannot easi l y be assessed wi t hout experi ence, and most
compani es wi l l keep recor ds of previ ous cal l s t o assi st t hem.
Organi sat i ons such as BI MCO provi de val uabl e i nf ormat i on on many

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port s, but probabl y t he most rel i abl e met hod i s t o cont act an agent i n
t he port i n quest i on, aski ng f or a prof roma di sbursement account based
on t he rel evant pert i nent dat a of your vessel . Et hi cal l y, of course such
an enqui r y be di rect ed t o t he agent whi ch wi l l be appoi nt ed i f t hat (or
ot her) busi ness i s successf ul l y concl uded.
Stage 4 : I ncome Knowi ng your cargo quant i t y, t he f rei ght rat e and
t ot al commi ssi ons and br okerages, i t i s a rel at i vel y smal l st ep t o
cal cul at i ng net t f rei ght , addi ng demurrage wher e t hi s i s appl i cabl e
al l l eadi ng t o . .
Stage 5 : Resul t By t he appl i cat i on of Expendi t ure t o I ncome and
t aki ng i nt o account t he t ot al number of days shown i n t he I t i nerar y, a
Resul t i n t he f orm of t he Gross Dai l y can be cal cul at ed. From t hi s f i gu re
can be deduct ed a vessel s dai l y Runni ng Cost s, i f desi red, l eavi ng t he
Net t Dai l y. For easi er negot i at i ons addi t i onal cal cul at i ons provi de t he
Gross Dai l y adj ust ment f i gure f or each 10 cent s vari at i on i n f rei ght rat e,
whi l st t he f i nal box i n t he voyage est i mat e f orm provi des space f or t he
t i mechart er equi val ent rat e t o t he gross dai l y ret urn t o be shown.
Frei ght Taxes and Bi l l of Ladi ng Wei ght Adj ustment s : Frei ght Taxes
were expl ai ned i n Lesson Fi ve. I n voyage est i mat i ng t hey are
consi dered an expense, but t hey are not a f i xed expense. Cal cul at ed as
t hey are on t he basi s of a percent age of t he t ot al f rei ght , i f treat ed as a
f i xed amount and i ncl uded i n t he Expenses sect i on t he est i mat or has
const ant l y t o adj ust t he f i gure as negot i at i ons proceed and as t he
f rei ght rat e al t ers. Consequent l y, t he best sol ut i on wi l l be f ound t o
consi der a f rei ght t ax al ong wi t h commi ssi on and brokerage, addi ng t he
t hree i t ems t oget her and deduct i ng same f rom Gross Frei ght . The same
st rat egy appl i es t o deduct i ons f rom bi l l of l adi ng cargo wei ght s i n l i eu
of wei ghi ng . A deduct i on of , say, 0. 5% can si mpl y be added t o
commi ssi on/ br okerage f or ease of appl i cat i on.
Ti me Charter Esti mati ng As t he pr act i ce of chart erers t aki ng vessel s

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on t i mechart er f or t ri ps has become wi despread, t he need has ari sen t o
est i mat e t he dai l y pr of i t of t hi s t ype of empl oyment i n t he same manner
as f or voyage chart ers i n order t o compare t he t wo al t er nat i ves. Lesson
Fi ve, i n f act , showed how t o compare t i mechart er rat es expressed i n
t erms of a dai l y amount wi t h t hose shown as per summer deadwei ght
t onne. Many merchant s pref er t he rel at i ve si mpl i ci t y of voyage
chart eri ng, not havi ng t he organi zat i on t o enabl e t hem successf ul l y t o
operat e t i mechart er ered vessel s. Ther e are ot hers, however, who
f requent l y empl oy vessel s on t i mechart er t ri ps as an al t ernat i ve, where
t hey cal cul at e a savi ng i n overal l cost s. Consequent l y, i t i s vi t al t o be
abl e t o est i mat e t he real net t cost of t i mechart eri ng and compare i t
wi t h voyage chart er i ng al t ernat i ve).
Fort unat el y t ri p t i mechart eri ng est i mat i on i s a rel at i vel y
st rai ght f orward exer ci se; i n many cases i t bei ng necessar y onl y t o
deduct commi ssi on and brokerage f rom t he gross dai l y hi re f or a ready
compari son wi t h an al t ernat i ve voyage resul t . Care must be exerci sed,
however, over i t ems such as domest i c f uel cost s, hol d cl eani ng
payment s, bunker pri ce di f f erent i al s, et c. where t hese are not t ot al l y
real i st i c. The real pr obl ems ar i se i n t i mechart er est i mat i ng, where a
vessel i s not t aken on hi re i mmedi at el y af t er her previ ous empl oyment ,
and al l owance has t hen t o be made not onl y f or t he t i me l ost t o her
owner s whi l st t he vessel i s unempl oyed, but al so f or bunkers consumed
duri ng t hat peri od. Even her e, t he resul t i ng cal cul at i on i s not di f f i cul t i f
t ot al i ncome and expendi t ure i s consi dered caref ul l y and appl i ed t o t he
number of days f or the ent i re vent ur e.
As we have al ready seen i n Lesson Fi ve, dependi ng on t he
st rengt h or weakness of t he f rei ght market , a chart erer may pay an
owner a bal l ast bonus t owards t he expenses of posi t i oni ng a vessel f or
del i ver y on t o a t i mechart er or, ver y occasi onal l y, f or redel i veri ng a
vessel i n an unat t ract i ve posi t i on, f aci ng t he shi p owner wi t h a bal l ast
voyage t o regai n a pl ace where sui t abl e empl oyment can be
obt ai ned. But whet her shi powner s have t o f i nance a bal l ast run bef ore or

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af t er a t ri p t i mechart er f rom t hei r own pocket or wi t h t he ai d of a bal l ast
bonus pai d by a t i mechart erer, t he pri nci pl e of how t o account f or t hi s i n
est i mat i ng terms is very much the same. All income - timecharter hire and
ballast bonus must be added together and compared with all expenses
perhaps bunkers and tolls for a positioning canal transit. The result divided by
the total number of days overall provides us once again with a gross daily, on
the basis of which the venture can be j udged f i nanci al l y and compared,
perhaps, wi t h a voyage al t ernat i ve.
When f rei ght markets are week chart erers f requent l y succeed i n
negot i at i ng bal l ast bonuses t hat do not ref l ect t he real cost t o an owner
of posi t i oni ng a vessel . Conversel y, when f rei ght market s are st rong, a
chart erer may have t o pay f ar more t han t hat real cost . Such are t he
essent i al el ement s of a f ree market , but i t does mean t hat
t i mechart erer s and t hei r brokers as wel l as shi powners must be
f i nanci al l y ast ut e and capabl e of perf ormi ng accurat e bal l ast bonus
cal cul at i ons when cal l ed upon t o do so. Ot her Voyage Est i mat i ng
Techni ques : Voyage Est i mat i ng i s a sci ence and, as wi t h any sci ence,
t here are t echni ques (such as back-haul i ng and voyage equal i sat i on )
t hat t he ast ut e perf orm f rom t i me t o t i me t o provi de mor e real i st i c
gui del i nes t o bet t er overal l prof i t abi l i t y. Thi s l esson has t aught onl y t he
basi cs. Do not t heref ore l eave t hi s l esson wi t h t he i mpressi on t hat you
now know al l t hat i t i s necessar y t o know. You shoul d no l onger be an
amat eur, but you wi l l not be an expert . Nevert hel ess, based on what
you have read so f ar and wi t h t he ai d of t he f ol l owi ng exampl es, you
shoul d by t he end of t hi s Lesson be abl e t o deal compet ent l y wi t h most
cal cul at i ons t hat come your way.
Practi cal Exampl e Let us now carr y out a voyage est i mat e. Thi s
part i cul ar one concerns a choi ce of voyage rout es f or t he operat ors of a
panamax bul kcarri er t he CURLEW necessar y t o di scover whi ch of
t wo (or possi bl y t hree or f our rout es) provi des most prof i t abi l i t y. I f you
t urn t o Appendi x 7: 2, you wi l l f i nd a t ypi cal est i mat i ng probl em set out
i n det ai l and gi vi ng al l t he i nf ormat i on requi red i n order t o carry out a

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cal cul at i on t he ki nd of cal cul at i on perf ormed ever y day of t he week by
a busy market pract i t i oner. I n t he r eal market , t hough, i t wi l l be
necessar y f or an est i mat or t o seek and t o gat her rel evant and vi t al dat a
f rom al l over, bot h f rom i n-house records, f rom ref erence books, and
f rom out si de sources. Here, however, al l i nf ormat i on requi red t o
compl et e t he est i mat e i s provi ded, as woul d be t he case, of course, f or
an est i mat i ng quest i on set i n an exami nat i on.
I f you ref er now t o Appendi x 7: 3, you wi l l see a suggest ed answer
f or one al t ernat i ve set out i n det ai l on t he same est i mat i ng f orm as
recommended f or use and i l l ust rat ed i n Appendi x 7: 1. Let us now f ol l ow
t he way t hi s est i mat e shoul d have been prepared and, t o hel p you, i t
may be f ound conveni ent (but not essent i al ) t o have besi de you an
at l as, a l oadl i ne zone map and di st ance t abl es. Fi rst caref ul l y r ead t he
i nf ormat i on provi ded i n Appendi x 7: 2. The operat or s of t he CURLEW
have f i xed a cargo of coal f or shi pment f rom Aust ral i a t o t he Cont i nent ,
t he appl i cabl e f rei ght rat e bei ng US$ 16. 00 per t onne. The probl em i s
t hat t here i s more t han one rout e f rom t he l oadi ng port of Newcast l e
(New Sout h Wal es) t o Rot t erdam.
Fi rst al t ernat i ve i s sout h- about round Aust ral i a and t hen
west wards across t he Sout hern I ndi an Ocean t o t he Cape of Good
Hope. Ther eaf t er t he vessel woul d head nort hwards acr oss t he At l ant i c
Ocean and on t hrough t he Channel t o t he di scharge port of Rot t erdam.
A second al t er nat i ve i s once agai n t o proceed sout h-about round
Aust ral i a but t hen t o proceed nort hwest erl y, across t he I ndi an Ocean t o
t he Red Sea, vi a t he Suez Canal , t hrough t he Medi t err anean Sea and
nort hwar ds around t he I beri an Peni nsul ar and vi a t he Channel t o
Rot t erdam.
A t hi rd al t ernat i ve woul d be t o pr oced t o t he Suez Canal
nort hwar ds ar ound Aust ral i a, but t hi s wi l l ent ai l passage bet ween t he
Great Barri er Reef and t he Aust ral i an Mai nl and and t hrough t he

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dangerous and shal l ow wat ers of t he Torres St rai t s. A pi l ot woul d need
t o be hi r ed and cargo woul d be cut out because of t he draf t l i mi t at i on.
A f ourt h al t ernat i ve i s t o proceed east erl y f rom Newcast l e, across
t he sout hern Paci f i c Ocean, ai ded by west erl y wi nds, and around t he
sout hern t i p of Sout h Ameri ca, ei t her around not or i ous Cape Horn or
t hrough t he Magel l an St rai t s, and t hen nort hwar ds acr oss t he At l ant i c
Ocean t o Europe and t o Rot t erdam. Shi ps f aci ng t hi s rout e must t ake
i nt o consi derat i on t he l i kel i hood of bad wat her around t he Sout h
Ameri can Cont i nent , and t he di st ance i s somewhat f urt her t han ot her
choi ces.
Thus t he sel ect i on i s real l y bet ween Al t ernat i ves one and Two.
Al t ernat i ve one i s t he l onger i n durat i on and made even l onger by t he
f act t hat t he vessel wi l l ver y l i kel y experi ence st rong headwi nds f or t he
ent i re passage bet ween Sout hern Aust ral i a and t he Cape of Good Hope,
and t hese wi nds The roari ng Fort i es wi l l pr obabl y add around t wo
days ext ra st eami ng t o passage t i me cal cul at ed f rom di st ance t abl es.
However, agai nst t hi s, Suez Canal t ol l s i n Al t ernat i ve Two wi l l be an
expensi ve consi der at i on. I t i s t heref ore necessar y t o perf orm t wo
est i mat es, one f or each of Al t ernat i ves One and Two, t o enabl e t he
ri ght choi ce t o be sel ect ed.
Let us st art wi t h Al t ernat i ve One, and t he f i rst t ask shoul d be t o
i ncl ude i n t he est i mat e det ai l s of t he cargo and of t he shi p. Thi s wi l l
ref resh t he memory i mmedi at el y bef ore t he st art of cal cul at i on s and
al so be usef ul f or f ut ure ref erence. I t i s assumed t hat t he vessel s
opt i mum speed on t he basi s of t he f rei ght market and current market
bunker pr i ces i s 14 knot s i n ei t her bal l ast or i n l aden condi t i on, and t hi s
dat a i s ent ered. ( Not e t hat f uel oi l consumpt i on at sea i s descr i bed
appropr i at el y f or bal l ast or l aden condi t i on at 14 knot s).
The voyage i t i nerar y can be cal cul at ed by ref erence t o mi l eages
bet ween Osaka and Nescast l e (NWS) and bet ween Newscast l e vi a t he

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Cape of Good Hope t o Rot t erdam. To t hi s must be added t he
af orement i oned al l owance f or ant i ci pat ed st rong head wi nds bet ween
Newcast l e and t he Cape of Good Hope. The mi l eages can be di vi ded by
336 (naut i cal mi l es dai l y at 14 knot s) and t he resul t i ng days and
deci mal part s of a day rounded up t o t he next whol e f i gure. (NB. For
short di st ances say one and a hal f days t hi s may not be real i st i c
and t he ent r y t hi s case, i t i s perhaps si mpl er and j ust as accurat e t o
round up as suggest ed).
Bunker consumpt i ons can be obt ai ned by mul t i pl yi ng t he dai l y
bunker consumpt i on agai nst t he days dur at i on of each voyage l eg. Thus
13 days (f rom Osaka t o Newcast l e) x 36 t onnes dai l y ( when i n bal l ast
condi t i on at 14 knot s) = 468 t onnes. Port Consumpt i on mi ght have t o
wai t unt i l cargo quant i t y has been est abl i shed. I n t hi s case, however,
where a ver y f ast dai l y t onnage l oadi ng rat e of 20, 000 t onnes i s
i nvol ved, an approxi mat e port t i me can be cal cul at ed on t he assumpt i on
t hat around 62, 500 t onnes cargo shoul d be l oaded, t hus : -
62, 500 mt / 20, 000 = 3. 125 days x 1. 4 ( magi c f ormul a t o al l ow
f or weekends and hol i days) = 4. 375 days.
4. 375 days rounded up t o t he nearest whol e day, t o al l ow f or
not i ce t i me, et c. = 5 est i mat ed port days at Newcast l e.
Rot t erdam di scharge i s based on shi nc t erms, not on shex as at
Newscast l e. Thus
62, 500 / 20, 000 shi nc = 3. 1215 days, whi ch rounded up t o al l ow
f or not i ce t i me, et c. = 4 days.
5 days ( Newcast l e) + 4 days (Rot t erdam) = 9 days x 2 t onnes
di esel oi l dai l y i n port = 18 mt s. (Most panamax bunkers are
gearl ess , t he CURLEW bei ng no except i on. Thus port

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consumpt i on f or t hese shi ps i s al ways basi s gear bei ng i dl e and
does not di f f er whet her t he vessel i s l oadi ng or di schargi ng.
I t i s now possi bl e t o compl et e t he I t i ner ary boxes of t he est i mat e
and t o see t hat t he proposed voyage i s except ed t o t ake 62 days and
t he vessel t o consume 2068 t onnes f uel oi l and 125 t onnes di esel oi l .
For cargo cal cul at i ons i t i s necessar y t o consul t t he l oad l i ne
zones map. The por t of Newcast l e i s i n a permanent summer zone and
t hi s zone st ret ches al l t he way t o Sout hern Af ri ca and up i nt o t he
At l ant i c Ocean. There i s a permanent t ropi cal zone st r addl i ng t he
Equat or as f ar northwards as t he Canary I sl ands bef ore a t ransi t t i ng
vessel re-ent ers a permanent summer zone. So f ar t here i s not hi ng t o
prevent a vessel l oadi ng t o her summer marks as an i nt er veni ng t ropi cal
zone i s no hi ndrance. Probl ems onl y set i n wi t h t he vessel s r eachi ng t he
nort hwest ern t i p of t he I ber i an Peni nsul a, near Vi go, wher e t he next
zone may remai n as a summer area f or part of each year or be cl assi f i ed
as a wi nt er zone f or t he remai nder of t he year, t he af f ect ed area
reachi ng al l t he way t o Rot t edam and beyond. Thus at cert ai n t i mes of
t he year a nort hbound vessel adj acent t o Vi go wi l l be crossi ng f rom a
summer i nt o a wi nt er l odl i ne zone and her mast er/ operat ors wi l l have t o
ensure t hat wi nt er marks are not submer ged.
I n our case we are t ol d t hat t he CURLEW i s l odi ng at Newcast l e
duri ng Apri l . Consequent l y, by t he t i me she reaches t he area of Vi go i n
May/ June, t he zone wi l l be summer, and t he ef f ect of a wi nt er zone can
t hus be di sregarded. At ot her t i mes of t he year i t may be necessar y f or
an est i mat or t o cal cul at e whet her t he wi nt er zone wi l l af f ect t he cargo
quant i t y t hat can be l oaded at Newcast l e or not . To do t hi s one has t o
ascert ai n whet her t he shi p wi l l have bur nt of f enough bunkers t o rai se
her draf t t o wi nt er marks and t he way t o do t hi s i s t o r un f i gures
backwards f rom Vi go by cal cul at i ng t he di st ance back t o Newcast l e or
t o t he pr evi ous bunkeri ng port , and t he vessel s ant i ci pat ed bunker
consumpt i on f or t hat part of her voyage. Thi s consumpt i on t onnage i s

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t hen added t o t he vessel s wi nt er deadwei ght , and t he resul t equal s t he
quant i t y of cargo t he vessel can l oad at Newscast l e, al ways provi di ng
t hi s does not exceed t he vessel s summer deadwei ght . I n ot her words, i f
t he est i mat ed bunker consumpt i on exceeds t he di f f erence bet ween t he
wi nt er and summer deadwei ght , t he summer deadwei ght remai ns t he
rest ri ct i ng f act or. (I t i s possi bl e, of cour se, t o i ncrease cargo l i f t i ng by
bunkeri ng en rout e say at Cape Town or i n t he Canar y I sl ands, but
of t en t he val ue of ext ra cargo l oaded i n t hi s way does not compensat e
f or del ay and even t he sl i ght devi at i on t o col l ect bunkers).
Thus we know i n t he case of t he CURLEW t hat t he vessel can
l oad t o summer marks at Newcast l e, but no f urt her. From t hi s t onnage
of 64, 650 met ri c t ones must be deduct ed const ant wei ght s and
bunkers carri ed on board bef ore car go l i f t i ng can be cal cul at ed.
Const ant wei ght s, we are t ol d, amount t o 500 t onnes f or t he CURLEW
but bunker assessment agai n requi res t he est i mat or s ski l l . I t i s not
suf f i ci ent sol el y t o det ermi ne t he mi l eage f rom Newcast l e t o Rot t erdam,
t o cal cul at e t he voyage days and t o mul t i pl y t hi s by t he dai l y bunker
consumpt i on of t he CURLEW , cal l i ng t hi s suf f i ci ent bunkers f or t he
voyage. The shi p wi l l r equi re t o carr y a saf et y surpl us of bunkers i n
case t he voyage i s l engt hened by any unf oreseen event ual i t y. Thi s
saf et y sur pl us vari es dependi ng on expect ed weat her condi t i ons but
shoul d never be l ess t han, say, 15%, but can be i nf l uenced by t he
scarci t y or wi de sel ect i on of port s en r out e f rom whi ch bunkers can be
t aken i n emergency. Even where bunkeri ng port s are avai l abl e,
however, i t i s sensi bl e pol i cy t o be sel f -suf f i ci ent i n bunker mat t ers, as
one can never be cert ai n t hat suppl i ers wi l l be avai l abl e when needed,
or avai l abl e at a real i st i c pri ce. To devi at e and del ay f or expensi ve
bunkers i s not prudent shi p operat i ng and i t i s f ar more sensi bl e t o t ake
an appropri at e suppl y of surpl us bunkers, t ai l ored f or t he proposed
voyage, even i f t hi s means a sl i ght reduct i on i n cargo i nt ake.
So l et us st udy t he voyage bef ore us. As we have seen, bunkers
are avai l abl e i n bot h Cape Town and i n t he Canar y I sl ands bot h

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recogni zed bunkeri ng st at i ons. We have checked and di scovered t he
f ol l owi ng pri ces avai l abl e en rout e: -
Fuel Oi l Di esel Oi l
$ $
Osaka 85 195
Newscast l e 110 200
Cape Town 65 190
Las Pal mas 75 150
Rot t erdam 65 125

The cheapest f uel oi l i s avai l abl e at Cape Town and, at t he end of
t he voyage at Rot t erdam, where i nexpensi ve repl eni shment can be
obt ai ned f or t he f ol l owi ng voyage. As a rul e of t humb i t can be seen t hat
t he devi at i on t o Cape Town wi l l onl y be sl i ght but t he savi ngs f or ever y
t onne of f uel oi l t aken on at Cape Town i nst ead of at t he
commencement of t he voyage at Osaka woul d amount t o $20.
Approxi mat el y a t hi rd of t he voyage remai ns at Cape Town, and a t hi rd
of t he t ot al f uel oi l r equi red 689 t onnes (2068 / 3) woul d save t he
CURLEW s operat or s about $13, 750 (689 x $20). Port cost s at Cape
Town wi l l be about $2, 500, t he devi at i on i s barel y not i ceabl e, and t he
del ay t o be expect ed onl y about hal f a day. Consequent l y, i t must be
wort h cal l i ng at Cape Town f or f uel oi l , si nce t he dai l y voyage val ue i s
ver y unl i kel y t o reach $11, 250 x 2) on t hi s part i cul ar voyage. Not onl y
t hat , ext ra cargo can be t aken at Newcast l e, and i f bunker pri ces at
Rot t erdam show si gns of i ncreasi ng by t he t i me t he vessel reaches
Cape Town, ext ra bunkers can be purchased. So we t ake suf f i ci ent
bunkers at Osaka saf el y t o reach Cape Town vi a Newcast l e, and t here
t he bal ance saf el y t o reach Rot t erdam. But what about our saf et y
surpl us? St udy t he at l as. There i s no need t o t ake saf et y sur pl us f or t he
Osaka/ Newcast l e l eg. If t he worst comes t o t he worst af t er a di f f i cul t
bal l ast voyage, ext ra bunkers can be t aken al ongsi de at Newcast l e. The

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probl em i s t he l ong st ret ch of 6545 mi l es f rom Newcast l e t o Cape Town,
made even l onger by t he st rong head wi nds of t he Sout hern I ndi an
Ocean. A surpl us of 15 percent on t op of an ext ra t wo days consumpt i on
al l owance f or adverse weat her shoul d be suf f i ci ent , t hus : -
Fuel Oi l Di esel Oi l
1. Osaka/ Newscast l e 13 days 468 26
2. Newcast l e/ Cape Town 20 days 800 40
3. Adverse Weat her 2 days 80 4
4. Saf et y Sur pl us
(15% of 2) 120 6
-------- -------
Tot al 1468 76
-------- -------

I t i s assumed i n est i mat i ng t hat a saf et y surpl us wi l l not necessari l y
be used. I t must be al l owed f or i n t he cal cul at i on of cargo i nt ake, et c.
but not cost ed as one cannot be cert ai n i t wi l l be used but i nst ead wi l l
probabl y be t aken f or ward t o t he next voyage i n t he f orm of a credi t .
(Thi s est i mat e i s sl i ght l y unusual as we are Assurance t he vessel i s
compl et el y empt y of bunkers at t he st art of t he voyage i n Osaka). Thus
one can expect t hat t he saf et y sur pl us of 120 t onnes f / o and 6 d/ o wi l l
remai n on board upon arri val at Cape Town. Si nce t he voyage l eg f rom
Cape Town t o Rot t erdam i s l ess t han f rom Newcast l e to Cape Town,
there is no need to take any further safety surplus supplies at Cape Town,
but simply to cost the extra bunkers required to reach Rotterdam some 19
days away.
The more observant amongst you wi ll note that our itinerary has
adj usted since our original figures. Not only do we have an extra half day s
delay to account for at Cape Town, our policy of rounding decimal parts of a
day up to the next full day has increased our voyage by one day. We now
have a voyage of 63. 5 days, f uel consumpt i on (not count i ng saf et y
surpl us) of 2108 t onnes and a di esel consumpt i on of 125 t onnes.

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But we can at l east concl ude t he cargo part of our cal cul at i on as our
bunker quant i t y at Newcast l e can be est i mat ed at : -
Fuel Oi l Di esel Oi l
Newcast l e/ Cape Town 800 40
Adverse Weat her Al l owance 80 4
Saf et y Sur pl us 120 6
-------- -------
Tot al 1000 50
-------- -------

Thus cargo can be cal cul at ed as: - 64, 650 t onnes (per sdwt )

Less : Const ant wei ght s : 500
Bunkers 1050 1, 550
Cargo I nt ake 63, 100 t onnes
One f i nal wor d of warni ng bef ore we go on t o voyage expenses, and
t hat i s about di esel oi l . A saf et y surpl us of onl y 6 t onnes of di esel oi l i s
i n real i t y no saf et y surpl us at al l . I n r eal i t y i t woul d be normal t o carr y
around 50 t onnes spare. Thus our cargo shoul d be reduced f urt her f rom
63, 100 t o 63, 050 t onnes.
So we have al ready made a good st art t o cal cul at i ng voyage
expenses by sol vi ng t he probl em of cal cul at i ng bunker cost s. We know
t hat 1468 t onns f uel oi l ar e t o be purchased i n Osaka and t he remai nder
i n Cape Town. Si mi l ar l y, we can t reat 76 t onnes di esel as bei ng
purchased at Osaka and t he remai nder at Cape Town, al t hough t he
pri ce di f f erence i s mush smal l er. As regards port cost s, Newcast l e
di sbursement , we are t ol d, amount t o US$ 50, 000 and Rot t erdam t o
$60, 000, wi t h Cape Town amount i ng t o $2, 500. Thus, voyage expenses
can be est i mat ed t o amount t o US$ 303, 010.

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I ncome can be cal cul at ed by t aki ng our ant i ci pat ed cargo of 63, 050 mt
and appl yi ng t he f rei ght rat e of US$ 16. 00 per mt ; t hus a net t
ant i ci pat ed f rei ght rat e of US$ 958, 360, af t er t he appl i cat i on of 5%
commi ssi on and brokerage.The resul t can be ascert ai ned by deduct i ng
$303, 010 expenses f rom net t i ncome of $958, 360 and by di vi di ng t he
resul t by t he over al l est i mat ed voyage durat i on of 63. 5 days t hus : - $
10, 320 dai l y. We are t ol d t hat t he runni ng cost s of t he CURLEW
amount t o $4, 500 dai l y, so net t i ncome wi l l amount t o $5, 820 dai l y.
To cal cul at e t he val ue of each 10 cent s on t he f rei ght rat e a usef ul
ai d dur i ng negot i at i ons i t i s necessar y t o adj ust t he f rei ght rat e by 10
cent s say t o $15. 90 or t o $16. 10 and run t he f i gures t hrough t o
ei t her t he gross or net t dai l y st age f or compar i son pur poses wi t h
exi st i ng f i gures. The di f f erence can be ent ered i n t he appropri at e box.
Fi nal l y, t he equi val ent t i mechart er rat e can be expr essed i n t erms of
dai l y hi re by t aki ng gross dai l y of $10, 320 and appl yi ng t o i t a f act or
represent i ng t he l i kel y commi ssi on/ brokerage payabl e. Thus, basi s a
t ot al commi ssi on/ brokerage of 5%: -
$ 10, 320 / 0. 95 = $ 10, 863 gross t i mechar t er dai l y hi re.
To convert this t/c hire rate into terms of $ x per summer dwt tonne, you will
need to refer to the calculations in Lesson Five.
So how di d you f i nd i t ? Feel conf i dent ? Good! Now you shoul d be abl e
t o tackl e the second part of the cal cul ati on and submi t the answer
to your Course Tut or. Al l t he i nf ormat i on you need t o know i s provi ded
i n Appendi x 7: 2 wi t h t he except i on t hat bunker pri ces en rout e are : -
Fuel Oi l Di esel Oi l
$ $


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Jeddah 75. 00 195. 00
Suez 72. 50 195. 00
Al geci ras 75. 00 165. 00
Ceut a 70. 00 155. 00


Assume port charges at each bunkeri ng port ar e $2, 500, except
Suze, where assume no ext ra charges i n addi t i on t o t ransi t cost s of t he
Canal . Al l ow one day f or t ransi t t i ng t he Suez Canal , and an ext ra hal f
day i f bunkeri ng at Suez, and hal f a day i f bunkeri ng el sewhere. Fi nal l y,
i f you f i nd t hat t hi s second al t ernat i ve shows l ess dai l y ret urn t han t he
al t ernat i ve one, remember t hat somet i mes t he Suez Canal Aut hor i t i es
can be persuaded t o l ower t hei r canal t ol l s i n order t o at t ract busi ness.
What reduct i on woul d be requi red t o produce t he same dai l y ret urn as
f or Al t ernat i ve One?The exerci se you ar e asked t o carry out compares
t he di f f erent rout i ngs f or t he same pi ece of busi ness but voyage
est i mat es are made f or al most ever y cargo seri ousl y cont empl at ed by
an owner, general l y bef ore embarki ng upon f i rm negot i at i ons. Est i mat es
coul d, t heref ore, be used t o compare one cargo wi t h anot her, voyage
busi ness agai nst t i me chart er, even (i n t he gri mmest of t i mes)
compari ng t radi ng wi t h l ayi ng up. Judgement beyond t he col d f i gures wi l l
al so be needed because voyage A may work out ver y much bet t er t han
voyage B on paper but t hat may be because voyage A t ermi nat es i n an
area where near by f ol l owi ng busi ness i s hard t o f i nd or non-exi st ent so
t hat a l ong bal l ast run wi l l be needed t o r each t he next l oadi ng port .
Sel f Assessment Questi ons
1. What i s t he 4: 2: 1 rat i o of bauxi t e?
2. Where i s pumi ce l i kel y t o be l oaded?
3. Woul d you appl y t he st owage f act or of scrap met al t o a vessel s
bal e or t o her grai n capaci t y and why?

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4. What are cant l i nes ?
Test Questi on
1. Ti me t o count f rom 1400 hours i f not i ce of readi ness t o l oad
t endered wi t hi n of f i ce hours bef ore noon and f rom 0600 hours next
worki ng day i f not i ce t ender ed wi t hi n ordi nar y of f i ce hours af t er noon. I f
l oadi ng commences bef ore not i ce expi res, hal f such t i me used t o count
as l ayt i me.
Cargo t o be l oaded at an average rat e of 20, 000 t onnes per weat her
worki ng day of 24 consecut i ve hours, Sundays and hol i days i ncl usi ve.
Demurrage US $ 10,000 daily/half dispatch on laytime saved.
Explain the significance of the laytime clause excepting time counting for any
breakdowns caused by reasons Beyond charterers control.
2. A clean bill of lading is of paramount importance to Shippers. Discuss. The
Master of mv SHELDUCK wishes to clause a bill of lading in respect of
rusting and indentation of steel cargo brought forward for loading, but the
Shippers ask him to load the goods and leave the bill clean, offering a letter
of indemnity holding Master and Shipowners harmless in case of claims
brought against them by Receivers. Advise the Master.
3. Analyse the basic division of responsibilities between Shipowners and
Charterers under a dry-cargo time charterparty.
4.You are in Disponent Owner of the OBO TEAL open in Baltimore and
described as :-
- 66,000 tonnes sdwt on 45 it sswd

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- 2,491,000 cubic feet grain
- f wa : 12 inches
- ti p : 175
- constants : 500 tonnes
- 13 knots on 45 tonnes IFO (180 c/s) pl us 3 tonnes DO dai l y
l aden at sea 41 tonnes plus 3 tonnes when i n bal last.
- Port consumption: 3 tonnes DO dai l y.
- Dai l y hire cost : US $ 10,000
Your period timecharter of the vessel is coming to and end, and in order to
redeliver to her Owners of DOP safe port UK/CONTINENT or, in Charterers
option, upon passing Cape Passero or Skaw westbound you are considering
the following cargo, which you believe you can fix as follows : -
- 50,000 tonnes (5% moloo) Green Delayed Petcoke (stowing
maximum) 47 cubic feet per tonne)
- Lake Charles (40 feet swsd)/iskenderun
- 15,000 tonnes shinc load/10,000 tonnes shex discharge
- $15.00 per tonne fiot 5% total commission

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APPENDI X 7: 2
mv. CURLEW
Gearl ess panamax bul kcarri er
- 64, 650 mt sdwt on 13. 02 met res ssw
- 7 Hol ds / Hat ches
- 3, 029, 000 cubi c f eet grai n capaci t y i n mai n hol ds.
- 225 met res l oa
- 13. 21 met res beam
- 14 knots on 40 tonnes f/o + 2 tonnes d/o daily laden at sea.
- 14 knots on 36 tonnes f/o + 2 tonnes d/o daily ballast at sea.
- 2 t onnes d/ o dai l y i dl e or worki ng i n port
- Dai l y runni ng cost s US$ 4, 500
- Canal Transi t Consumpt i on: 10 t onnes f / o + 10 t onnes d/ o.
Fi xture:
- 60, 000 t onnes coal i n bul k 10% more or l ess owner s opt i on.
- Loadi ng 1 sb Newcast l e (NSW) 20/ 30 Apri l
- Di schargi ng 1 sb Rot t edam

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- 20, 000 mt shex l oad
- 20, 000 mt shi nc di scharge
- Fi ot
- Frei ght US$ 16. 00 per mt .
- Coal grade st ows maxi mum 45 cubi c f eet per t onne.
- Frei ght I nsurance Chart erer s Account .
- Tot al Commi ssi on/ Br okerage: 5%
Voyage Data:
Port Di sbursement :

Newcast l e : US $ 50, 000
Rot t erdam : US $ 60, 000
Suez Canal : US $120, 000 (i ncl udi ng $110, 000 t ol l s)
Di stances :
Osaka/ Newcast l e : 4323 nmi l es
Newcast l e/ Cape Town : 6445 nm
Newcast l e/ Rot t erdam : 12765 nm
Cape Town/ Rot t er dam : 6220 nm
Newcast l e/ Suez Canal : 8177 nm
Suez Canal / Rot t erdam : 3287 nm

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CHAPTER- 8
BI LLS OF LADI NG AND CARGO CLAI MS
The Mate s Recei pt As cargo i s l oaded, or upon compl et i on of l oadi ng,
a shi p shoul d normal l y i ssue mat e s recei pt s cont ai ni ng remarks as t o
t he nat ure, quant i t y and condi t i on of t he goods concer ned. These
document s may, i n f act , be prepar ed pr i or t o commencement of l oadi ng,
t hereby provi di ng advance i nf ormat i on f or shi p s personnel about t he
cargo t o be l oaded, assi st i ng st owage pl ans, and f ormi ng a conveni ent
means of recordi ng a cargo i s good condi t i on, or remarki ng upon i t s
short comi ngs. Such recei pt s al so f orm val uabl e evi dence of cargo
quant i t y and qual i t y. Mat e s recei pt s are, however, merel y r ecei pt s and
not document s of t i t l e t hat can be exchanged commerci al l y. They are
rel eased t o shi ppers i n ret urn f or cargo l oaded and t her eaf t er t endered
t o t he mast er or t o the owner s agent s i n ret urn f or one or f or a set of
si gned bi l l s of l adi ng.
The Bi l l of Ladi ng A bi l l of l adi ng (B/ L) can be drawn up i n a vari et y of
ways and wor di ngs, but i t i s nearl y al ways prepar ed on a pre-pri nt ed
f orm. Thi s f orm may rel at e t o a speci f i c or t o a general cargo t rade
see Appendi x 8: 1 or i t may be desi gned f or l i ner ser vi ces. What ever
i t s f orm a bi l l of l adi ng f ul f i l s sever al f unct i ons: -
1. A recei pt f or t he cargo, si gned by t he mast er or by t he
owner s port agent s on behal f of t he carri er, wi t h r emarks as t o
t he condi t i on of t he cargo;
2. A document of t i t l e t o t he cargo, by whi ch means t he
propert y may be t ransf erred t o anot her part ;

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3. Evi dence of a cont ract governi ng t erms and condi t i ons of
carri age.
The Bi l l of Ladi ng as a Recei pt. Thi s wi l l show t he quant i t y of cargo
l oaded, and may wel l cont ai n t he words sai d t o wei gh or somet hi ng
l i ke dock wei ght or shi pper s wei ght i f i t i s not possi bl e f or t he shi p t o
check t he wei ght . Si mi l ar l y, i f t he goods are i n a cont ai ner of some sort ,
i t may not t he possi bl e f or t he shi p s st af f t o check numbers, so t hat t he
words sai d t o cont ai n may be used. Unl ess t her e i s some such
qual i f i cat i on, a shi p wi l l be bound t o del i ver t he quant i t y or number
st at ed i n t he B/ L, or f ace a cl ai m f rom t he consi gnees. (See l at er
paragraphs on Cargo Quant i t y).
A Bi l l of Ladi ng wi l l al so comment on t he condi t i on of t he cargo,
usual l y by sayi ng i n appar ent good order and condi t i on. (See
paragraphs on Cl ean Bi l l s of Ladi ng). As wel l as ref erence t o quant i t y
and condi t i on t he B/ L wi l l al so gi ve any det ai l necessar y i n order t o
i dent i f y t he cargo. I n t he case of packaged goods t hi s wi l l consi st of
di st i ngui shi ng marks and numbers. Addi t i onal l y t he B/ L wi l l of course
show t he names of t he shipper and consignees, the name of the ship, the
loading port and the destination. There will also be some reference to the
freight payment, either that it has been prepaid or that it has to be collected.
Finally it will have the signature of the Mast er (often signed for the Master by
the ships agent) and the date. The date can be very important, affecting as it
does, letters of credit and trading terms.
The Bi l l of Ladi ng as a Document of Ti tl e A shi pper can t ransf er
owner shi p of goods by maki ng t he bi l l s of l adi ng over t o a named
consi gnee, or t o t he order of t hat consi gnee, or by endorsi ng t he bi l l s
of l adi ng t o anot her part y. I n f act , such t ransf er of ownershi p and t he
buyi ng and sel l i ng of bi l l s of l adi ng i s common pract i ce i n i nt ernat i onal
t rade and a bi l l of l adi ng may change hands sever al t i mes bef ore i t
reaches t he part y who wi l l event ual l y cl ai m and t ake del i ver y of t he
cargo at t he di schar ge port (s).

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Where payment f or t he goods has been arranged vi a a
document ar y credi t (of t en cal l ed a l et t er of credi t ) t he B/ L becomes vi t al
i n i t s ot her rol e as a document of t i t l e, namel y as securi t y f or payment .
Banks never want act ual t i t l e t o t he goods, wi t h al l t he responsi bi l i t i es
t hat al so t i t l e t o t he goods, wi t h al l t he responsi bi l i t i es t hat al so
i nvol ves, but t hey do want t he secur i t y of denyi ng payment t o a shi pper
unt i l sat i sf i ed t hat al l t he condi t i ons of a cont ract of sal e have been
carri ed out and, of course, denyi ng t i t l e t o consi gnees unt i l payment
has been made by t hem t o t he bank concerned.
The Bi l l of Ladi ng as Evi dence of a Contract Where consi gnment of
Li ner Cargo are concerned, t he act ual cont ract may wel l be no more
t han a t el ephone conversat i on ( ver y occasi onal l y a Booki ng Not e ) and
so t he B/ L i s of t en t he onl y means of set t i ng out t he t erms and
condi t i ons of carri age whi ch are usual l y pri nt ed on t he r ever se si de of
t he B/ L f orm and so provi de evi dence of a cont ract . I n t he case of
homogeneous bul k cargoes, however, bi l l s of l adi ng shoul d cont ai n
ref erence t o (i . e. : evi dence of ) t he rel evant chart erpart y; addi ng, f or
exampl e, t hat al l t erms, condi t i ons and except i ons of chart erpart y
dat ed London . . , are deemed i ncorporat ed herei n.
I ndeed, chart erpart i es f requent l y cont ai n wordi ng t o t he ef f ect
t hat cert ai n chart er part y cl auses (eg : cl auses Paramount ) are t o be
f ul l y i ncorpor at ed i nt o bi l l s of l adi ng i ssued t hereunder, and i t i s
part i cul arl y i mport ant t hat t he chart erpart y arbi t rat i on cl ause be
i ncorporat ed i nt o bi l l s of l adi ng as, f ai l i ng t hi s, a bi l l of l adi ng hol der
may not be abl e t o cal l f or an arbi t rat i on agai nst t he carri er. Shoul d any
of t he t erms of t hese t wo document s be i n conf l i ct , however , t hose of
t he bi l l of l adi ng wi l l t ake precedence over t hose of t he chart erpart y.
Thi s may sound st r ange at f i rst when one consi der s how much work
went i nt o prepar i ng t he chart erpart y, but remember t he paragraph about
t he B/ L s rol e as a document of t i t l e. I f , f or exampl e, t i t l e t o a cargo has
i ndeed been sol d on , a new consi gnee shoul d be qui t e remade f rom
t he ori gi nal negot i at i ons bet ween t he chart erer and t he shi powner. What

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t he consi gnee woul d have, however, i s hi s document of t i t l e and t hat i s
t hat he pai d money f or and t hat t he what he has a ri ght t o recei ve.
Whi l st , t heref ore, a B/ L may i ncorporat e t he chart erpart y i t does not
mean t hat i t i ncorpor at es anyt hi ng t hat i s more onerous t han t hat whi ch
i s speci f i cal l y st at ed i n t he B/ L.
From al l t hi s, we can see t hat t he mai n el ement s of a bi l l of l adi ng are: -
1. Quant i t y of cargo.
2. Accurat e cargo descri pt i on and condi t i on.
3. Dat e of t he bi l l of l adi ng
4. Names of shi pper and consi gnee
5. Port s of l oadi ng and di charge
6. Shi p s name.
7. Terms and condi t i ons of carri age.
8. Payment of f rei ght .
Bi l l s of Ladi ng at the Loadi ng Port A shi p s port agent may be gi ven
t he t ask of drawi ng up bi l l s of l adi ng, and i f t hese are subsequent l y
requi red f or l et t er of credi t t ransact i ons, i t i s usef ul t hat t he agent be
suppl i ed wi t h appropri at e det ai l s of t hat l et t er of credi t so t hat al l
rel evant mat eri al can be i ncl uded i n t he wordi ng.
Al l bi l l s shoul d be si gned by ei t her t he shi p s mast er or by a duly
authorized agent, in their capacities as servants of the shipowner or of the
disponent time-charter owner i.e. : the carrier. If time does not permit the
ships master to sign the bills, a letter is usually drawn up givi ng the port agent
appropriate authority to sign bills of lading (see Appendix 8:2). Alternatively, it
may be agreed at the time of negotiating the charterparty that charterers
and/or their agents be authorized by owners to sign bills of lading as

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presented on masters and/or on owners behalf, in accordance with mates
and/or t al l y cl erk s recei pt s, wi t hout prej udi ce t o t hi s chart erpart y.
I t i s i mport ant al so t o dat e bi l l s of l adi ng correct l y, and as per t he
dat e on whi ch t he compl et e cargo (i n t he case of an homogeneous
commodi t y) of an i ndi vi dual i t em (f or l i ner goods) i s act ual l y l oaded.
Where cargo i s l oaded l at er t han speci f i ed i n l et t er of credi t
t ransact i ons, shi powners may be appr oached t o si gn back -dat ed bi l l s of
l adi ng, possi bl y agai nst l et t ers of i ndemni t y t o be i ssued by t he
shi ppers or chart erers. I n f act , t he consi gnee may be wel l aware of t he
del ay i n l oadi ng and be happy wi t h t he suggest ed arrangement , whi ch
ot her wi se mi ght i nvol ve t i me-consumi ng and t edi ous ext ra paper work.
Nevert hel ess, t he wi se shi powner wi l l consi der such an appr oach ver y
caut i ousl y, perhaps cont act i ng hi s P & I Cl ub f or advi ce, even i n cases
where he i s convi nced t hat al l part i es are f ul l y awar e of t he
ci rcumst ances.
A shi pper may requi r e t he shi p s mast er t o carr y on t he voyage an
ori gi nal bi l l of l adi ng wi t h t he shi p s papers i . e. i n t he shi p s bag
f or handi ng over at t he dest i nat i on t o a named consi gnee. I n connect i on
wi t h t hi s ser vi ce, t he mast er may be asked al so t o i ssue t he shi pper
wi t h a l et t er t ermed di sposed l et t er conf i rmi ng t he arrangement .
Thi s procedure was vi t al i n t he days of sai l i ng shi ps when t he cargo-
carryi ng vessel coul d wel l reach t he di schargi ng port bef ore any ot her
means of physi cal communi cat i on. I t become l ess i mport ant when
st eamshi ps t ook over f ast mai l si ps coul d carr y document s much
qui cker t han t he t ramp. I t i s, of course, now becomi ng rare gi ven t he
speed and rel i abi l i t y of ai rmai l ; but i s st i l l encount ered i n t he short sea
and coast al t rades.
A rel i c of t hose earl y days whi ch st i l l persi st s, much t o t he
perpl exi t y of many peopl e i n t he shi ppi ng i ndust r y, i s t hat of i ssui ng
more t han one ori gi nal B/ L (t hat i s not count i ng sever al non-negot i abl e
copi es). You wi l l see t hi s i n Appendi x 8: 1 wherei n, j ust above t he

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si gnat ure t here i s a dot t ed l i ne where t he number i n t he set has t o be
ent ered. I n t he days of f ai l and t he earl y st eam era, one coul d qui t e
underst and t he di spat ch of one ori gi nal vi a f ast mai l packet , one i n t he
shi p s bag and one hel d back by t he Shi pper i n case t he ot her t wo
became l ost . Today, when l et t ers of credi t are so of t en i nvol ved, t he
banks obvi ousl y want al l t he ori gi nal s ot her wi se t hey l ose t hei r secur i t y,
so t he reason f or a set of more t han one i s somet hi ng of a myst er y.
However, i f t hat i s what pri nci pal s want , i t i s not f or an agent t o reason

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Rel easi ng Bi l l s of Ladi ng Bi l l s of Ladi ng shoul d not be rel eased t o
shi ppers marked f rei ght prepai d or cont ai ni ng any si mi l ar expr essi on
i ndi cat i ng t hat f rei ght has been r emi t t ed t o t he shi powner (or t o t he
di sponent owner i n t he case of a t i me-chart erered st op) wi t hout t hat
part y s express aut hori t y so t o do. The rel ease of such bi l l s wi t hout
f rei ght act ual l y havi ng been made pl aces a shi powner i n a weak l egal
posi t i on, as he may wel l l ose t he r i ght of l i en on t he cargo i f
subsequent l y t hi s i s needed i n order t o f orce payment of f rei ght .
Consequent l y, ei t her f rei ght shoul d be f ul l y prepai d i s i ndi cat ed on
t he bi l l s of l adi ng or al t er nat i ve wordi ng accept abl e t o al l part i es and
t o t he l et t er of credi t arrangement s must be f ound. I n order t o gi ve a
chart erer t he t i me t o make necessar y f i nanci al t ransact i ons, i t i s of t en
arranged t hat f rei ght i s t o be pai d wi t hi n so many days of the si gni ng
and/ or t he rel easi ng of bi l l s of l adi ng by t he shi powner, and t here
shoul d be no reason why, wi t h suf f i ci ent f oresi ght , l et t er of credi t
arrangement s cannot be adapt ed t o t hi s syst em.
Cargo Quanti t y and condi ti on I t i s i mport ant t hat cargo quant i t y and
condi t i on be adequat el y and correct l y descri bed i n t he bi l l s of l adi ng.
Quant i t y of general or bagged/ bal ed goods can usual l y be accurat el y
assessed by t al l ymen empl oyed by ei t her a shi powner or shi pper, or
j oi nt l y by bot h, i n whi ch event t he t al l y-cl erk s recei pt t akes t he pl ace of
t he mat e s recei pt . Wi t h bul k homogeneous cargo t here may be di sput e
bet ween cargo quant i t y assessed by shore apparat us and by t he
cal cul at i ons of shi p s of f i cers based on a draf t sur vey. I n some cases
where shore apparat us i s unr el i abl e (or even non-exi st ent ) shi p s draf t
measurement i s t he accept ed means of assessi ng i nt aken car go wei ght ,
and t he basi s t heref ore of any bi l l of l adi ng f i gure.
I deal l y, a dr af t survey shoul d be perf ormed by an i ndependent
sur veyor and shoul d commence wi t h t he vessel i n bal l ast condi t i on. The
di f f erence i n draf t when f ul l y l aden cal cul at ed agai nst t he shi p s pl ans
and al l owi ng f or bunkers and f resh wat er, et c. suppl i ed and consumed
i n t he meant i me, wi l l provi de a f ai rl y accurat e measurement of cargo

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l oaded. Nevert hel ess, reasonabl e assessment of cargo on board can be
achi eved even when commenci ng draf t cal cul at i ons wi t h a l aden vessel
and, shoul d a mast er be f aced wi t h a subst ant i al di screpancy bet ween
shi p and shore f i gures, he shoul d cl ause t he bi l l s of l adi ng wi t h shi p s
wei ght f i gures i f possi bl e, support i ng t hese remarks wi t h an
i ndependent surveyor s report or, f ai l i ng t hi s, cert ai nl y hi s owners
shoul d st rongl y prot est over t he di screpancy.
The condi t i on of most cargoes can be checked by t al l ymen or by
shi p s of f i cers as l oadi ng progresses, and rel evant comment s ent ered i n
ei t her t al l y or mat e s recei pt s, and t hereaf t er i n bi l l s of l adi ng. But f or
cert ai n commodi t i es eg: st eel product s cl ai ms f or damage can be so
hi gh t hat a f ul l y f l edged l oadi ng sur vey i s necessar y. A Shi powner s
l ocal P & I (Cl ub represent at i ves may assi st i n arrangi ng f or a reput abl e
sur veyor t o i nspect al l i t ems present ed f or l oadi ng, recordi ng damages
apparent i n t he goods pr i or t o l oadi ng (i . e. : i ndent at i on or rust ) and
support i ng same wi t h col our phot ographs where deemed advi sabl e.
Cl ean Bi l l s of Ladi ng: I rrespect i ve of t he act ual condi t i on of cargo,
many l et t er of credi t t ransact i ons cal l f or cl ean bi l l s of l adi ng i . e. :
bi l l s st at i ng t hat goods descr i bed t herei n are i n apparent good order
and condi t i on; wi t h no addi t i onal or al t ernat i ve wordi ng i ndi cat i ng
def i ci enci es i n t he goods. Unf ort unat el y, di f f i cul t t hough i t may be f or
shi ppers, a carri er cannot agree t o i ssue cl ean bi l l s of l adi ng when
cargo i s not i n good condi t i on, even wher e l et t ers of socal l ed i ndemni t y
are of f ered by t he part i es concerned. Bi l l s of l adi ng must accurat el y
ref l ect t he act ual condi t i on i s t o act f raudul ent l y. Purchasers of a cargo
rarel y have t he opport uni t y t o exami ne same and t o assure t hemsel ves
of i t s good condi t i on. I nst ead t hey must r el y upon descri pt i ons of qual i t y
and of quant i t y as ent ered i n bi l l s of l adi ng. Despi t e a cl ean bi l l of
l adi ng i ndi cat i ng car go t o be unbl emi shed, shoul d good be def ect i ve i n
some way, t he consi gnee (as an i nnocent part y t o a f raudul ent act ) has
t he ri ght t o cl ai m redress f r om t he carri er, or t o assume t hat t he cargo
was damaged at Sea agai n ver y l i kel y t he responsi bi l i t y of t he cari er.

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I t f ol l ows t hat great care must be exerci sed by shi p s mast ers and
by port agent s al i ke t o ensure t hat bi l l s of l adi ng cont ai n onl y accurat e
st at ement s as t o cargo condi t i on, despi t e pressures and i nducement s
f rom shi ppers and f rom cert ai n port aut hori t i es. On t he ot her hand,
remarks cont ai ned shoul d not be of t ri vi al nat ure cover i ng some
i nsi gni f i cant def ect normal l y accept abl e i n t he t rade c oncer ned, as t hi s
mi ght have t he ef f ect of i nt erf eri ng wi t h a l et t er of credi t t ransact i on f or
non reason. I t can be seen t hat a shi pper or sel l er present ed wi t h
uncl ean bi l l s of l adi ng f or a t ransact i on where cl ean bi l l s are
needed, i s i n a di f f i cul t posi t i on. The probl em need not be
i nsurmount abl e however. The consi gnee or buyer can be i nf ormed of
t he di f f i cul t y, gi ven a copy of a rel evant sur vey report , perhaps
renegot i at e t he purchase pri ce, and st i l l gi ve i nst ruct i ons t o i s bankers
t o accept t he qual i f i ed bi l l s. Al t ernat i vel y, and ver y occasi onal l y, t he
i ssue of cl ean bi l l s agai nst a l et t er of i ndemni t y may be j ust i f i ed where
t he buyer i s f ul l y aware of act ual condi t i on of t he cargo, and where t he
goods wi l l not be resol d pr i or t o t he del i very at t he port (s) of di scharge.
Bi l l s of Ladi ng at the Di schargi ng Port Cargo shoul d onl y be
del i vered t o a part y (a consi gnee) who can produce an ori gi nal bi l l of
l adi ng cover i ng t he i t em of cargo cl ai med. The port agent shoul d
exami ne t he bi l l of l adi ng t hus pr esent ed so as t o ensure i t s good order
and, once he i s sat i sf i ed t hat al l i s correct , he wi l l r el ease t he cargo, or
i ssue a del i ver y order i n exchange f or the bi l l of l adi ng. The consi gnee
t hereaf t er present s t he del i ver y order t o t he dock aut hori t y/ t ermi nal
operat or or t he st evedor es and cl ai ms rel ease of t he i t em/ cargo
concerned.
I n t he meant i me, t he ori gi nal bi l l of l adi ng present ed shoul d be
st mped, si gned and dat ed by t he port agent , and i n doi ng t hi s he i s sai d
t o have si ght ed t he bi l l of l adi ng on t he mast er s behal f . Shoul d t he
agent ret urn t he bi l l of l adi ng t o t he consi gnee were t hi s i s t he cust om
i nst ead of i ssui ng a del i ver y order, he must keep a caref ul record, as i t
i s essent i al t hat not more t han one ori gi nal be si ght ed, or more one

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del i ver y order be prepared f or ever y set of bi l l s. As an ai d t o recor d
keepi ng i n t hi s regard, a copy of t he cargo mani f est may be ut i l i zed,
on whi ch t o record si ght ed bi l l s.Where t he consi gnee cl ai ms an
ori gi nal bi l l f rom t he shi p s bag, t he mast er and or port agent must , of
course, saf et y t hemsel ves of t he correct i dent i t y of t he cl ai mant .
I t i s cust omar y i n cert ai n t rades f or a consi gnee t o endorse t he
reverse si des of bi l l s of l adi ng wi t h conf i rmat i on of recept of cargo, and
such bi l l s ar e sai d t o be accompl i shed . Occasi onal l y i t i s necessar y
f or a shi powner t o obt ai n an accompl i shed bi l l of l adi ng as a
prerequi si t e f or al l or f or part of hi s f rei ght . Where bi l l s of l adi ng arr i ve
at a di scharge port unreasonabl y l at e (f or exampl e, af t er a shi p s
arri val ) t hey may be sai d t o be st al e , t he same t erm bei ng used t o
descr i be bi l l s present ed t o a bank f or f rei ght col l ect i on l at er t han t he
t erms set by a l et t er of credi t .
Del i very of Goods without Producti on of a Bi l l of Ladi ng. Per haps
t he most ser i ous di f f i cul t y ar i si ng at a di schargi ng port i n rel at i on t o
bi l l s of l adi ng i s where f or some reason t he bi l l s are unavai l abl e.
Normal l y such di f f i cul t y can be overcome provi di ng t he consi gnee
i ssues a sui t abl e l et t er of i ndemni t y, f ul l y guarant eed by a reput abl e
bank. Thi s i ndemni t y i s hel d by t he port agent on t he shi powner s behal f
of l adi ng, whi ch l at t er document can t hen be at t ended t o i n t he normal
way. Agent s shoul d not del ay i n exchangi ng a l et t er of i ndemni t y f or t he
proper l y present ed B/ L because banks charge qui t e st eepl y on a t i me
basi s f or t hei r count er -si gnat ure on such document s, Appendi x 8: 3 i s an
exampl e of such a l et t er of i ndemni t y.
Types of Bi l l s of l adi ng
A Cl ean Bi l l of Ladi ng. As al ready di scussed, t hi s i s a Bi l l whi ch i s
uncl aused ad i s t her ef ore a f ul l y negot i abl e document .
A Foul Bi l l of Ladi ng I s a Bi l l of Ladi ng whi ch i s i n some way cl aused

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or di rt y. Thi s i mpl i es t hat t he cargo l oaded on board i s not perf ect i n
ever y condi t i on and t he shi powner i s t hus prot ect i ng hi msel f agai nst a
cargo cl ai m f or bad del i ver y at t he di scharge port wi t h an appropr i at e
endorsement .
Recei ved for Shi pment Bi l l of Ladi ng Whi l st most bi l l s of l adi ng are
i ssued when t he car go i s act ual l y shi pped on board t he vessel , i n t he
l i ner t rades t here i n t he al t er nat i ve where t he l i ner t rades t here i n t he
al t ernat i ve where cargo i s act ual l y recei ved i nt o t he cut ody of t he
shi powner or hi s agent , such as a whar f i nger or dock aut hori t y, and i s
not act ual l y on board t he vessel at t hat part i cul ar t i me. I t i s al so
somet i mes cal l ed a cust ody Bi l l of Ladi ng. I f such a bi l l of l adi ng i s
i ssued, t he shi pper i s ent i t l ed t o demand f rom t he carri er an
endorsement on t he B/ L when t he goods have been shi pped on board
st at i ng Si nce shi pped gi vi ng t he dat e of shi pment and a f urt her
si gnat ure. Recei ved f or shi pment B/ L s are common i n t he cont ai ner
t rade where cont ai ners or cargo are of t en t aken i nt o t he carri er s
cust ody at an i nl and depot .
Shi pped Bi l l s of Ladi ng As t he name i mpl i es, t hi s i s t he bi l l of l adi ng
whi ch i s normal l y i ssued, especi al l y f or bul k cargo, and conf i rms t hat
t he cargo descr i bed i s act ual l y on board t he vessel . Needl ess t o say, i f
t he Shipment Bill of Lading, this must be surrendered when he issues the
actual Shipped Bill of Lading itself. Alternatively he can merely endorse
the Received Bill of Lading with the name of the ship into whi ch the cargo
has been loaded and the date of shipment. A Shipped B/L is often
(especially in letters of credi t ) t aut ol ogi cal l y descr i bed as a Shi pped on
Board B/ L.
Di rect Bi l l of Ladi ng Thi s i s a bi l l cover i ng t he carri age of goods i n
one vessel di r ect f rom one port t o anot her.
Through Bi l l of Ladi ng Such B/ L s are i ssued where t he car go wi l l onl y
be carri ed f or part of t he voyage by t he carri er si gni ng t he B/ L. The

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remai nder may be over l and t ransport or i t may be t ransshi pment i nt o
anot her vessel . The essence of a Through B/ L as opposed t o a
Combi ned Transport B/ L (q. v. ) i s t hat wi t h a t hr ough B/ L t he carr i er
si gni ng i t i s onl y responsi bl e as a pri nci pal f or hi s part of t he ca rr i age
act s an agent f or t he shi pper f or t he ot her part (s).
Combi ned Transport Bi l l of Ladi ng As t he name i mpl i es, such a B/ L i s
f or cargo carri ed by more means t han t he shi p i t sel f . I t i s part i cul arl y
used i n t he cont ai ner t rade when t he di f f erent modes of carri age can
i n an ext reme case be qui t e compl i cat ed. For exampl e, t he carri er
coul d t ake del i ver y of a cont ai ner at t he shi pper s premi ses, t ruck i t t o a
rai l way t ermi nal , rai l t o t he port , shi p i t on boar d a f eeder vessel ,
t ransshi p i t on t o t he ocean vessel and then repeat al l that in reverse at
the dischargi ng end. With a Combi ned Transport B/L the carri er signing it
takes responsibi l i ty as a Principal from start to furni sh but i ncludes
l i mitati ons of l i abi l i ty for the different sections according to the appropriate
i nternati onal conventi ons (eg Hague-Visby for the sea transport, C.I.M.
convention for rai l, C.M.R. for road etc.).
Order Bill of Lading Thi s i s not t o be conf used wi t h an open B/ L
whi ch shows no cosi gner at al l ; such woul d be a most unsat i sf act ory
document as i t woul d be l i ke a bl ank cheque. An order B/ L i s ver y
common i ndeed because of i t s val ue i n l et t er of credi t t ransact i ons. I t
can best be compar ed wi t h a cheque drawn t o cash and once i t i s
endorsed by t he shi pper i t becomes i n ef f ect a bearer document . Thi s
sounds a ver y dangerous pr ocedure as, t heoret i cal l y, i f someone
dropped i t i n t he st r eet , t he person pi cki ng i t up coul d cl ai m t he cargo;
i n f act t he syst em works ver y wel l .
You wi l l recal l ear l i er i n t he l esson i t was ment i oned t hat t he
banks i n a l et t er of credi t t ransact i on do not want t o assume t he
l i abi l i t i es and responsi bi l i t i es of a consi gnee but si mpl y want t o hol d t he
Ori gi nal B/ L s as securi t y. Theref ore, i nst ead of t he bank bei ng named
as t he consi gnee and t hen endorsi ng i t over t o t he act ual i mport er, t he

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bank i nsi st s on t he sect i on of t he B/ L marked Consi gnee havi ng j ust
t he words To Order wr i t t en i n, and t he shi pper s endorsement on t he
back. When al l i s i n order t he B/ L i s handed t o t he i mport er who can
cl ai m t he cargo f rom t he carr i er. Most order B/ L s have a space f or a
not i f y part y t o be i nsert ed. Thi s i s usual l y t he act ual i mport er and
put t i ng hi s name t here ensures t hat he knows when t o cont ract t he
bank. I nci dent al l y, t here i s no act ual l egal obl i gat i on on a l i ne t o pass
i nf ormat i on t o t he not i f y part y.
Li ner Bi l l of Ladi ng Whi l st a Li ner Bi l l of Ladi ng i s st i l l onl y evi dence
of a cont ract i t carr i es f ar more det ai l t hen a chart erpart y B/ L because
t he reverse of a Li near B/ L cont ai ns t he f ul l t ext of t he cont ract of
carri age. Wi t h a chart erpart y B/ L such masses of wordi ng are not
necessar y as t he cont ract i s, of course, t he chart erpart y i t sel f and i t i s
onl y, t heref ore, necessar y t o devot e a sent ence or t wo t o i ncorporat e i t
(and t he arbi t rat i on cl ause) i nt o t he B/ L. Appendi x 8: 4 shows t he f ront
and back of a t ypi cal l i ner B/ L (The Conl i ne B/ L reproduced by ki nd
permi ssi on of t he Bal t i c and I nt ernat i nal Mari t i me Counci l ). St udy t he
var i ous cl auses, compari ng and cont rast i ng t hem wi t h t he wordi ng of a
chart erpart y.
Waybi l l s Usi ng a sea waybi l l i nst ead of a B/ L i s becomi ng more
preval ent , speci f i cal l y i n t he l i ner t rades. There i s not hi ng new about a
waybi l l as a document , as i t has been i n use f or ai r f rei ght al most si nce
t he begi nni ng of carryi ng merchandi se by ai r. A waybi l l l ooks ver y
si mi l ar t o a B/ L and i ndeed has t o cover t wo of i t s uses, namel y a
recei pt f or cargo and evi dence of a cont ract . What i t does not have i s
any negot i abi l i t y; i t i s not a document of t i t l e. Thi s means t hat t he
goods can onl y be del i vered by t he carri er t o t he named consi gnee.
That i s no di sadvant age at al l i f t he consi gnee has no i nt ent i on of
sel l i ng t he cargo on and/ or i f l et t ers of credi t we not i nvol ved such as
t radi ng wi t h a branch of f i ce or wi t h a t ri ed and t rust ed t radi ng part ner
who wi l l set t l e t he i nvoi ce f or t he goods at t he ri ght t i me. A waybi l l s

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ver y l ack of negot i abi l i t y i s one of i t s advant ages because t here can be
no doubt and t heref ore no room f or error when i t comes t o del i ver i ng
t he cargo t o t he consi gnee. Not bei ng pr oof of t i t l e, i t does not mat t er i f
t he shi p arri ves bef ore t he document s. You wi l l readi l y see t hat a
waybi l l l ends i t sel f admi rabl y t o el ect roni c t ransmi ssi on. There are
some probl ems t o be overcome bef ore waybi l l s become even more
wi despr ead, t hese ar e mai nl y due t o t hei r not bei ng t hought of when Bi l l
of Ladi ng Act s wer e wri t t en i nt o st at ut e books. However, many l egal
brai ns are bei ng set t o work t o overcome t hi s di f f i cul t y.

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Sel f Assessment Questi ons
1. What i s a cl ean bi l l of l adi ng?
2. Why do many B/ L s show t he words To Order i nst ead of named
consi gnee?
3. Who si gns t he Let t er of I ndemni t y present ed i n l i eu of a B/ L at
port of di scharge?
4. What are t he B/ L s t here basi c f unct i ons?
Cargo Cl ai ms
I nsurance Al most al l shi powners wi l l be wel l i nsured and det ai l s of t hi s
compl ex subj ect are more t o be f ound i n t he Tut orshi p courses on Shi p
Management and Mari ne I nsurance.
I n essence, however a shi powner s i nsur ance wi l l f al l under t hree mai n
cat egori es: -
a) Hul l & Machi ner y
b) War Ri sk
c) Prot ect i on and I ndemni t y
The f i rst t wo maj or t ypes and sel f -expl anat or y and are nor mal l y
covered t hrough Lyod s of London or maj or i nsur ance compani es, or a
combi nat i on of t he t wo. The t hi rd t ype Prot ect i on & i ndemni t y can
best be t hought of as insurance against third party risks and is almost invariably
covered through a mutual association or Club as they are usually called. Such
clubs, as their name implies are not profit making companies or individuals as in the

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cases of other insurance, but are associations run by groups of shipowners for their
mutual benefit. The operation of their day-to-day business is entrusted to firms of
professional managers. The risks covered with the P & I Clubs include such things
as claims for damage to other peoples property (eg hitting a quay wall) injury to
individuals (eg a crew member or a stevedore falling into a hold) and cargo claims
(eg claims made by consignees for damage done to (or loss of) their cargo whilst in
transit).
Cargo Damage Even the best run ship may eventually be i nvolved in
damage to cargo. There are also certain commodities that are notorious in
t hat shi powners may be hel d responsi bl e f or damage when t he damage
occurred ei t her bef ore l oadi ng or f ol l owi ng di scharge st eel product s
bei ng t he bet t er known exampl e, and where i t i s essent i al t o conduct
pre-l oadi ng and af t er di scharge sur veys t o veri f y t he condi t i on of
ever y i t em carr i ed so as t o avoi d pot ent i al cl ai ms at a l at er dat e.
Most voyage chart erpart i es i ncorpor at e by means of a Cl ause
Paramount ei t her t he i nt ernat i onal Hague Rul es or t he l at er, updat ed
ver si on t he Hague Vi sby Rul es , whi ch set out t he responsi bi l i t i es
of carri er and owner of goods at sea. I n f act t he whol e subj ect of cargo
damage i s ver y i mport ant t o be underst ood by t hose t radi ng i n shi ps
and commodi t i es and i t woul d hel p t o underst and i t bet t er i f we t ook t he
opport uni t y i n t hi s l esson of bri ef l y pl ot t i ng t he pr ogress of t he l aw
rel at i ng t o cargo carri age dur i ng t he past cent ur y, bef ore exami ni ng t he
Rul es i n great er det ai l . Si nce much i nt ernat i onal sea- t radi ng i s
conduct ed under t he t erms of Engl i sh l aw, we t hen wi l l exami ne t he
Hague Rul es and t he Hague-Vi sby Rul es under t he Engl i sh
equi val ent s t he Carri age of Goods by Sea Act s, 1924 and 1971 .
Brief Background to the Hague Rules and the Hague-Visby Rules Duri ng
t he 9
t h
cent ur y t her e was a great deal of general di ssat i sf act i on and
unrest wi t h t he condi t i ons upon whi ch goods were carri ed by sea. Thi s
unrest came about t he t o many el abor at e negl i gence cl auses whi ch
were i nt roduced i nt o bi l l s of l adi ng. These Cl auses were desi gned t o

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def eat compl et el y t he ef f ect of l egal deci si ons agai nst shi powners i n t he
Court s. Many of t hese cl auses were pr oduced i n ext remel y ambi guous
f ashi on and were qui t e i mpossi bl e t o i nt erpret . As a consequence of
t hi s t he posi t i on of many shi ppers, bankers and cargo under wr i t ers
became l udi crous as t hey were qui t e unabl e t o underst and and i nt er pret
t he ext ent of t hei r r i ght s agai nst a carr i er i n t he area of carri age of
cargo by sea.
The l i ner compani es at t hi s t i me f ound t hemsel ves i n a most
monopol i st i c posi t i on because, bei ng rel at i vel y f ew i n number, t hey
coul d combi ne t oget her t o agree var i ous t erms of carri age whereas
shi ppers, f or exampl e, f ound t hat t hey were qui t e unabl e t o comb i ne
ef f ect i vel y i n order t o negot i at e wi t h shi powners on equal t erms. The
general ef f ect of t hi s was t o produce a f eel i ng wi t hi n t he I ndust r y of
general di ssat i sf act i on and growi ng agi t at i on f or Gover nment s t o
i nt roduce l egi sl at i on t o remedy t he si t uat i on t hat had devel oped f or t he
necessar y prot ect i on of shi ppers, banker s and under wr i t ers al i ke.
Thus i n 1893, t he Uni t ed St at es passed t he Hart er Act whi ch l ai d
down many condi t i ons upon whi ch goods wer e t o be carr i ed by sea.
Thi s, of course, af f ect ed onl y t he carri age of goods bei ng shi pped t o
and f rom t he Uni t ed St at es of Amer i ca. Fol l owi ng t hi s, however, si mi l ar
l egi sl at i on was i nt roduced by ot her Government s i n an ef f ort t o correct
t he unf ai r si t uat i on and, among t he l eaders i n t hi s respect , were
Aust ral i a, ( who devel oped t hei r Sea Carri age of Goods Act , 1904)
Canada (The Wat er -Carri age of Goods Act , 1910) and al so New
Zeal and, wher e a seri es of new Act s was passed.
I n 1920 t he I mperi al Shi ppi ng Commi t t ee made recommendat i ons
t o t he Government t hat t here shoul d be some uni f orm l egi sl at i on
t hroughout t he Bri t i sh Empi r e t o st andardi ze t he Law regardi ng t he
carri age of goods by sea. However, t he shi ppi ng communi t y i t sel f
f avoured more t he i dea of adopt i ng a set of uni f orm rul es f or vol unt ar y
adopt i on rat her t han t o i nt roduce l egi sl at i on. The Mar i t i me Law

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Commi t t ee of t he I nt ernat i onal Law Asoci at i on, t heref ore, hel d a
meet i ng t o di scuss t he conf l i ct i ng vi ews of shi powners and cargo
i nt erest s and di d, i n ef f ect , draw up a set of rul es subsequent l oy t o be
known as t he Hague Rul es, 1921.

Nevertheless, the voluntary adoption of these rules did not materialize
and there was further agitation for legislation on this issue. This is turn led to
the Conference on Maritime Law at Brussels in 1922 where the Hague
Rules were adopted as the basis of a draft convention for the unification of
certain Rules relating to Bills of Lading. The International Compensation
was signed by many participating countries at Brussels on 25
t h
August, 1924
and was subsequently given force of Law in the United Kingdom by the
Carriage of Goods by Sea Act 1924. This lesiglation ______ in existence
until 1971 when further legislation was introduced following amendments to
the Hague Rules by a set of modified Rules known as the Hague-Visby
Rules, which were given the force of Law in the United Kingdom by the
Carriage of Goods by Sea Act 1971. The original Hague Rules, as
embodied in the Carriage of Goods by Sea Act, 1924 were modified and
extended to a certain degree. This means that the 1924 Act has now been
repealed and replaced by The Carriage of Goods by Sea Act 1971. One of
the main reasons for the 1971 amendments was, of course, to take account
of the effect of containerization.
The Carri age of Goods by Sea Acts The ef f ect of t he 1971 Act , l i ke i t s
predecessor i n 1924, was t o pl ace t he Hague-Vi sby Rul es i nt o Bri t ai n s
st at ut e book t hus maki ng i t a cont ract i ng st at e. The maj ori t y of
count ri es i n t he wor l d di d somet hi ng si mi l ar. The rul es appl y t o any bi l l
of l adi ng or si mi l ar document of t i t l e r el at i ng t o t he carr i age of goods by
sea provi di ng: -
1. The bi l l of l adi ng i s i ssued i n a cont ract i ng St at e,

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2. The carri age i n f rom a port i n a cont ract i ng st at e
3. The cont ract cont i nued i n or evi denced by t he Bi l l of Ladi ng
provi des t hat t he rul es or t he l egi sl at i on of any St at e gi vi ng ef f ect
t o t hem are t o gover n t he Cont ract , what ever may be t he
nat i onal i t y of t he shi p, t he carri er, t he shi pper, t he consi gnee or
any ot her i nt erest ed person.
Those t hree sub- par agraphs are part of Art i cl e X of t he Hague-
Vi sby Rul es and you wi l l see t hat t he t hi rd way f or t he rul es t o t ake
ef f ect i s i f The Cont ract provi ded t hat t he Rul es are t o govern t he
Cont ract . The way i n whi ch one ensures t he B/ L makes t hat
provi si on i s by i ncl udi ng a Cl ause Par amount ( you wi l l see t hi s i n t he
Conl i ne B/ L Appendi x 8 : 4). The word Paramount i s used because t he
ef f ect of such cl ause i s t o make i t cl ear t hat i f t here i s anyt hi ng i n t he
B/ L whi ch woul d pl ace t he shi pper i n a whose posi t i on t han provi ded f or
i n t he Rul es t hen t he Rul es t ake precedence over t he wordi ng of t he B/ L
i n t hat regard. The Hague/ Hague-Vi sby rul es do not appl y t o
chart erpart i es but i t i s common pract i ce but i t i s common pract i ce t o
i nsert a cl ause i n a C/ P st i pul at i ng t hat any B/ L s i ssued under t hat
chart er shal l cont ai n a Cl ause Paramount .
Some I mportant El ements of the Cats
Coasti ng Trade Under t he 1924 Act , owi ng t o st rong represent at i on
made by part i es i nt erest ed i n t he Coast i ng Trade, t he Act al l owed such
part i es f reedom of Cont ract so t he Act al l owed such part i es f reedom of
Cont ract so l ong as t he Cont ract was not embodi ed i n a bi l l of l adi ng
but was cont ai ned i n a recei pt whi ch had t o be marked cl earl y as a
non-negot i abl e document . Under t he 1971 Act , however, t hi s
exempt i on has di sappeared and even Coast i ng Shi pment s i f carri ed
under a bi l l of l adi ng wi l l be subj ect t o t he Rul es even t hough st ri ct
appl i cat i on of t he rul es does not demand t hi s.

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Li ve Ani mal s Under t he 1924 Act t he part i es concer ned i n t he carr i age
of l i ve ani mal s were f ree t o cont ract on agreed t erms; i n ot her works,
t he Act had no appl i cat i on t o t he carr i age of l i ve ani mal s. However,
where t he cont ract i s cont ai ned i n or evi denced by a bi l l of l adi ng or
recei pt whi ch expressl y provi des t hat t he 1971 Act wi l l appl y, t hen t hi s
shal l i ncl ude cont ract s f or t he carr i age of l i e ani mal s. I n t hi s r espect t he
1971 Act i n f act goes beyond t he demands of t he Rul es.

Deck Cargo Here agai n, i f a cont ract i s cont ai ned i n or evi denced by a
bi l l of l adi ng or recei pt whi ch expressl y provi ded t hat t he Rul es shal l
appl y, t hen t hi s shal l i ncl ude cont ract s f or t he carri age of deck cargo.
However, as was t he posi t i on under t he 1924 Act , deck cargo means
cargo whi ch, by t he Cont ract of Carri age, i s st at ed as bei ng carri ed on
deck, and i s so car ri ed. I f i n such ci rcumst ances t he bi l l of l adi ng i s
cl earl y cl aused t o t he ef f ect t hat cargo i s carri ed on deck at shi pper s
ri sk and l i abi l i t y t hen, i n t hose ci rcumst ances, a shi powner woul d be
exempt f rom l i abi l i t y i f l oss or damage occurred t o t he cargo.
Voyages Covered Under t he 1924 Act , voyages covered by t he Rul es
were f rom port s i n t he Uni t ed Ki ngdom and Nort hern I rel and onl y.
However, t hi s has been amended by t he Hague-Vi sby Rul es t o t he
ef f ect t hat t he Rul es wi l l appl y t o ever y bi l l of l adi ng r el at i ng t o t he
carri age of goods bet ween port s i n t wo di f f erent St at es, as f ol l ows : -
1. Provi di ng t he bi l l of l adi ng i s i ssued i n a Cont ract i ng St at e
2. The carri age i s f rom a port i n a cont ract i ng St at e
3. The Cont ract cont ai ned i n or evi denced by t he bi l l of l adi ng
provi des t hat t he Rul es or l egi sl at i on of any St at e gi vi ng ef f ect t o t hem
are t o gover n t he cont ract , what ever may be t he nat i onal i t y of t he shi p,

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t he carri er, t he shi pper, t he consi gnee or any ot her i nt erest ed person.
Seaworthi ness Bef ore t he Hague (Carri age of Goods by Sea Act , 1924)
were i nt roduced, t he Common Law posi t i on was t hat t her e was i mpl i ed
i n ever y cont ract of Carri age of goods by sea an absol ut e warranty
t hat t he vessel was seawort hy at t he commencement of t he voyage
and al so at t he commencement of each subsequent st age of t he
voyage. Onl y t he most cl ear and unambi guous l anguage i n a bi l l of
l adi ng coul d excl ude t hi s i mpl i ed warrant y. The ref erence t o t he
commencement of each subsequent st age of t he voyage brought i nt o
consi derat i on what was t ermed as t he Doct ri ne of St ages whi ch meant
i n ef f ect t hat a shi p had t o be seawort hy at t he commencement of each
part i cul ar st age of t he voyage. For exampl e, a vessel pr oceedi ng i n
bal l ast as opposed t o havi ng cargo on board or a voyage whi ch
necessi t at ed t he vessel havi ng a l ong down-ri ver passage pri or t o
set t i ng of f across t he open sea. Di f f erent seawort hi ness consi derat i on
woul d appl y dependi ng on t he sui t on of the voyage cont empl at ed.
The 1924 Act and subsequent l y t he 1971 Act cat egor i cal l y about
t he absol ut e warrant y of seawort hi ness i n al l cont ract s t o whi ch i t
appl i ed. Shi powners, however ar e st i l l under a l egal obl i gat i on t o
exerci se due di l i gence t o make a vessel aut hori t y i n al l respect s and t o
make cargo compart ment s f i t f or t he recept i on of cargo. But a
shi powner wi l l not be l i abl e f or l osses due t o unseawort hi ness, unl ess
due t o want of due di l i gence.
Obl i gati on to I ssue a Bi l l of Ladi ng When cargo i s del i ver ed i nt o t he
cust ody of a shi powner, t hat shi powner i s obl i gat ed t o i ssue a bi l l of
l adi ng, on demand, t o t he shi pper, gi vi ng f ul l part i cul ars of t he goods
accept ed and, or course, t hei r apparent order and condi t i on. I t i s
apparent t hat once cargo had been accept ed i nt o t he cust ody of t he
shi powner and t he bi l l of l adi ng i ssued, t hen t he part i cul ars of t hat bi l l
const i t ut e pri ma f aci e evi dence t hat t he cargo has i n f act been
recei ved by t he carri er. Thi s obl i gat i on t o i ssue t he bi l l of l adi ng dos not

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i ndeed depend on t he goods havi ng been l oaded on boar d t he vessel .
As we have seen, bi l l s can, i n f act , be i ssued pri or t o act ual shi pmenht
on board a vessel and t hi s i s done by carri ers i ssui ng a reci ved f or
shi pment bi l l of l adi ng. But when goods are f i nal l y l oaded on board, a
shi pper may demand a shi pped bi l l of l adi ng t o repl ace t hi s.
The obl i gati ons of the Shi pper I t i s i mport ant t hat i n t he preparat i on
of a bi l l of l adi ng, a shi pper f urni shes f ul l part i cul ars of cargo t o be
shi pped, by ensuri ng t hat al l det ai l s not ed t hereon are accurat e. The
shi pper must f ul f i l , an obl i gat i on by whi ch he wi l l i ndemni f y t he carri er
i n t he event t hat t here i s any l oss or damage ar i si ng f rom any
i naccuracy i n t he part i cul ars pr ovi ded by hi m. Thi s ensur e t hat t he
shi pper i s l i abl e, t he carri er must show t hat , i n t he event of subsequent
l oss or damage, t hi s l oss or damage was i ndeed caused t hrough t he
act ual f aul t or negl ect of t he shi pper, or hi s ser vant s.
From Loadi ng to Di scharge A shi powner has cert ai n obl i gat i ons al so
t owards t he cargo pri or t o l oadi ng i t on board t he vessel , and al so
f ol l owi ng i t s di schar ge f rom t he vessel . However, t he Act l eaves t he
shi powner f ree t o cont ract on any agreed t erms i n respect of t he t ransi t
of t he goods pri or t o l oadi ng and subsequent t o di scharge. I t i s onl y f or
t he act ual peri od of t he voyage i t sel f t hat t he Hague-Vi sby Rul es wi l l
appl y.
General Average The Carri age of goods by a Sea Act , 197 st at es
expressl y t hat t he part i es t o t he Cont ract are f ree t o make any
reasonabl e arrangement s wi t h regard t o t he appl i cat i on of General
Average, normal l y st at ed i n chart erpart i es, f or exampl e, as General
Average t o be adj ust ed i n London i n accordance wi t h t he York -Ant wer p
Rul es, 1990 . I n ef f ect , t he Rul es have no appl i cat i on t o General
Average.
Dei vati on In every contract it is implied that a vessel shall proceed on her
voyage without departure from her proper course as described in the contract,

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and if she does, she will, in effect, devi at e f rom cont ract ual t erms unl ess
such devi at i on i s f ul l y j usi t i cabl e. Under Common Law, devi at i on f rom a
cont rct ed voyage wi l l onl y be al l owed when savi ng or at t empt i ng t o save
human l i f e. Thi s posi t i on was changed by t he i nt roduct i on of t he Hague
and Hague- Vi sby Rul es, whereby any devi at i on i n savi ng or at t empt i ng
t o save l i f e or propert y at sea, or i ndeed any reasonabl e devi at i on,
woul d not be deemed t o be an i nf ri ngement or breach of t he Rul es or of
t he cont ract of carri age. The carri er woul d not be l i abl e f or any l oss or
damage resul t i ng f rom t hat si t uat i on. Whet her a devi at i on i s sai d t o be
reasonabl e i s i n ever y part i cul ar case a quest i on of f act and must be
consi dered i n accordance wi t h t he part i cul ar ci rcumst ances i n ever y
case.
Li mi tati on of Li abi l i t y I n t he Carri age of Goods by Sea At 1924 (Hague
Rul es), t he Li mi t at i on of l i abi l i t y provi si ons avai l abl e t o a shi powner
were t hat , unl ess t he val ue and nat ur e of t he goods wer e decl ared and
i nsert ed i n t he bi l l of l adi ng bef ore t he goods were act ual l y shi pped on
board, l i abi l i t y was l i mi t ed t o # 100, 000 per package or uni t . The part i es
t o a cont ract wer e, however, f ree t o i nsert a hi gher l i mi t i f t hey so
wi shed, but a shi powner was unabl e t o rest ri ct hi s l i abi l i t y t o any
amount l ess t han $ 100, 000. Thi s l i mi t at i on had been ef f ect i ve si nc
e1924 and si nce t hat t i me great st eps f orward had been t aken wi t hi n
t he shi ppi ng i ndust ry wi t h regard t o t he met hods of carryi ng cargo by
sea. These new and modern met hods i ncl uded such concept s as
cont ai ner i zat i on, pal l et i sat i on and rol l -n rol l -of f met hods of l oadi ng and
di scharge.
I n t he l i ght of t hi s moder i sat i on i t was deci ded t hat as wel l as the
limitation of liability itself being too low, the limitation of liability provisions were
outdated and need amending. These amendments took place following the
intrudction of the Hague-Visby Rules and were brought into English Law by the
Carriage of Goods by Sea Act, 1971. These amendments provided for the
f ol l owi ng: -

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1. I n any event t her e shal l be no l i abi l i t y i n respect of l oss or
damage t o goods unl ess l egal act i on i s commenced wi t hi n one year of
t hei r del i ver y or of t he dat e when t hey shoul d have been del i vered. I t
bei ng permi ssi bl e t o ext end t hi s per i od shoul d t he part i es so agree.
2. Recourse act i ons may be br ought by t he pl ai nt i f f af t er t he
expi rat i on of t he one year t i me l i mi t , wi t hi n t he t i me l i mi t al l owed by t he
Law of t he Court sei zed of t he case.
Thi s meant , of course, t hat , dependi ng upon t he Law of t he
country under which the claim was being brought then, if that jurisdiction
provided for a time limitation period in excess of the one year time limit laid
down in the Hague-Visby Rules, such time limit, as defined by the Law of the
Country would prevai l .
Under t he Hague rul es and t heref ore t he 1924 Act t he l i mi t at i on
of l i abi l i t y was $100 per package or uni t . I nf l at i on overt ook t hi s smal l
l evel of compensat i on t o such an ext ent t hat t he Bri t i sh Mar i t i me Law
Associ at i on produced a vol unt ar y agreement i n 1950 cal l ed t he Gol d
Cl ause Agreement , whi ch doubl ed t he l i mi t of compensat i on t o $300.
(Thi s agreement nat ural l y ceased t o exi st when UK Rat i f i ed t he Hague
Vi sby Rul es). Under Hague-Vi sby, t he ai m was t o prot ect t he l i mi t at i on
f rom i nf l at i on by rel at i ng i t t o a manuf actured currency cal l ed t he Gol d
(or Poi ncare) f ranc and t he rul es st i pul at ed t he exact wei ght and
degree of f i neness of t he gol d. The new rat e was 10, 000 of t hese gol d
f rancs. Subsequent l y (st art ed i n 1981 but not i nt ernat i onal l y accept ed
unt i l 1984) a prot ocol was agreed t o repl ace t he gol d f rancs wi t h what
i t cal l s uni t s of account but whi ch are more f ami l i arl y known as
Speci al Drawi ng Ri ght s (SRD s) whi ch are anot her manuf act ured
currency by t he I nt ernat i onal Monet ar y Fund and f or whi ch a rat e of
exchange i s publ i shed each day i n t he f i nanci al press. Theref ore, i f we
l ook speci f i cal l y at how t hese speci al drawi ng ri ght s af f ect t he Hague
Vi sby Rul es t he al t er at i on can be expl ai ned as f ol l ows : -

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(a)For t he equi val ent of 10, 000 Poi ncare Francs subst i t ut e
666. 67 uni t s of account .
(b) For t he words, 30 Poi ncare Francs per ki l o subst i t ut e 2
uni t s of account per ki l o.
The Merchant Shi ppi ng Act , 1981 whi ch gave ef f ect t o t hi s
charge, speci f i es f or t he purposes of t he schedul e t o t he Car ri ages of
Goods by Sea Act , 1971, as amended t he val ue, on a part i cul ar day, of
one Speci al drawi ng ri ght shal l be t reat ed as equal t o such a sum i n
St erl i ng as t he I nt enat i onal Monet ar y Fund have f i xed as bei ng t he
equi val ent f or t hat part i cul ar day. The l i mi t at i on of l i abi l i t y provi si ons
have been added t o by t he i nt roduct i on of an al t ernat i ve l i mi t t o t he
package of uni t usi ng wei ght per ki l o as a basi s f or l i mi t at i on. I t must
be poi nt ed out t hat t he basi s of l i mi t at i on gi vi ng t he hi gher r esul t shal l
be adopt ed f or appl i cat i on t o cl ai ms. I t i s deemed under t he Rul es t hat
t he t ot al amount recoverabl e i n respect i n respect of any cl ai m i s t o be
cacul at ed by ref erence t o t he val ue of t he goods at t he t i me and pl ace
at whi ch t he goods are di scharged f rom t he when deci di ng, i n
si t uat i ons where t he met hod of consol i dat i ng cargo i s by cont ai ner,
pal l et or ot her si mi l ar art i cl e of t ransort , whet her t he l i mi t at i on of
l i abi l i t y i s t o based on per package or uni t or i ndeed or wei ght ,
t hi s i s t o be deci ded by r ef erri ng t o bi l l of l adi ng i t sel f . I f t he packages
or uni t s are act ual l y enumerat ed i n t he bi l l of l adi ng as bei ng packed
i nsi de t he cont ai ner, t hen t he uni t basi s of l i mi t at i on wi l l be adopt e d,
ot her wi se t he cont ai ner i t sel f wi l l be t he basi s of l i mi t at i on.
Dangerous Cargo The provi si ons of t he Hague-Vi sby Rul es rel at i ve t o
t he carr i age of dangerous cargo are ver y much si mi l ar t o t he condi t i ons
cont ai ned i n t he Merchant Shi ppi ng Act , 1984. I f any dangerous cargo
i s shi pped on board a vessel wi t hout t he knowl edge or consent of t he
mast er or t he carri er t hen t he Act woul d al l ow t he carri er t o t ake
appropr i at e act i on t o have t he cargo l anded or i ndeed dest royed at t he
shi ppers expense shoul d any l oss or damage be sust ai ned t o t hose
goods. Si mi l ar l y i f , duri ng t he course of a voyage, danger ous cargo

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becomes a danger t o t he shi p and t he crew, even i n ci rcumst ances
where t he cargo has been shi pped on board i n proper and l egal f ashi on,
t hen t he mast er of t he vessel i s ent i t l ed t o t ake act i on t o dest roy or
di spose of such cargo as he deems f i t and t he carri er wi l l not i ncur any
l i abi l i t y what soever ot her t han an obl i gat i on t o cont r i but e i n General
Average, i f any.
Hi mal aya Cl ause The Hague-Vi sby Rul es have i nt roduced a
compl et el y new Art i cl e and t he i nt ent i on of t hi s was t o add t o t he rul es,
provi si ons i n order t hat any ser vant s or agent s of t he carri er woul s be
ent i t l ed t o benef i t f rom t he def ei ni t i ons and l i mi t s of l i abi l i t y present l y
avai l abl e t o t he cari ers. Such ser vant s or agent s of t he carri er woul d
not , however, be abl e t o avai l t hemsel ves of t hese provi si ons i f i t were
t o be proved t hat any l oss or damage resul t ed f rom an act or omi ssi on
of t he servant , or agent , done wi t h i nt ent t o cause damage or wi t h
knowl edge t hat damag woul d probabl y resul t .
The cl ause get s i t s name Hi mal aya as t hi s was t he shi p i nvol ved
i n t he case of Adl er V Di ckson (1955) when a passenger i nj ur ed hersel f
on a badl y secured l adder but f ound t hat t he condi t i ons on t he
passenger t i cket prevent ed per f rom t aki ng act i on agai nst t he
shopowner under t hei r cont ract ual agreement so shi powner under t hei r
cont ract ual agreement so i nst ead t he successf ul l y sued t he capt ai n
under t ort . The Hi mal aya cl ause expressl y prevent s t hi s by st i pul at i on
t hat ser vant s of t he owner have t he same l i mi t at i on of l i abi l i t y
prot ect i on as t he shi powner under t he B/ L. Pr i or t o t he Hague-Vi sby
Rul es, t hi s cl ause had t o be speci f i cal l y wri t t en i n t o t he cont ract of
carri age.
Ri ghts and I mmuni ti es There ar e consi derabl e r i ght s avai l abl e t o a
shi powner wi t h exempt i ons or i mmuni t i es f rom l i abi l i t y. A number of
t hese i ncl udi ng unseawort hi ness, devi at i on and l i mi t at i on of l i abi l i t y
provi si ons have al ready been exami ned i n some det ai l . However, t here
are many ot her exempt i ons: -

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a) Act, negl ect or defaul t of the Master , Mari ner, Pi l ot of
ser vant t o t he Carri er i n t he navi gat i on or i n t he management of
t he shi p. Thi s exempt i on f i rm l i abi l i t y musdt be consi dered ver y
caref ul l y and a compari son made bet ween f aul t s or errors i n t he
navi gat i on of t he vessel as opposed t o f aul t s or errors i n t he
management of t he vessel . Obvi ousl y, rel at ed t o navi gat i on, such
errors woul d r ef er t o navi gat i onal errors possi bl y resul t i ng i n
col l i si on or i n groundi ng and may resul t i n t he shi powner bei ng
abl e t o avoi d l i abi l i t y by pl eadi ng t he ref erred except i on. Wi t h
regard t o t he except i on rel at ed t o act , negl ect or def aul t of t he
Mast er, et c. , i n t he management of t he shi p, t hen t hi s i s
somewhat compl i cat ed i n t hat i t must be deci ded what si t uat i on
woul resul t i n an error i n t he management of t he shi p as opposed
t o act , negl ect or def aul t of t he Mast er, Mar i ner, et c. i n t he
management of t he cargo i t sel f . A di st i nct i on must be made,
t heref ore, bet ween want of due care of t he cargo and want of
due care of t he vessel by i t sel f i ndi r ect l y af f ect i ng cargo.
b)Fi re, unl ess caused by t he act ual f aul t or pri vi t y of t he
Carri er. Thi s except i on i s an unqual i f i ed exempt i on f or l oss or
damage ari si ng out of f i re. I t i s however , subj ect t o t he f act t hat
t he f i re had not bee caused by t he act ual f aul t or pr i vi t y of t he
carri er and t he burden of proof i s on t he carri er i n t i s rspect .
c)Peri l s, dangers and acci dents of t he sea or ot her navi gabl e
wat ers. Thi s i s a somewhat di f f i cul t except i on f or a shi powner t o
t ake advant age of part i cul ar l y as he must produce evi dnce t hat
t he damage was caused by such a peri l of t he sea and was
wi t hout t he shi powner s negl i gence of f aul t . I t woul d al so have t o
be proved t hat t he vessel had encount ered abnormal l y bad
weat her caused by f reak condi t i ons i n respect of whi ch t here
woul d probabl y be st ruct ural damage t o t he vessel as wel l . Of
course t he vessel i s expect ed t o meet t he normal hazards and
weat her condi t i ons at sea i n any case so t hat any evi dence woul d

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have t o subst ant i ve ext remel y abnormal condi t i ons at sea i n any
case so t hat any evi dence woul d have t o subst ant i t e ext r emel y
abnormal condi t i ons.
d) Act of GodWi t h reagard t o t hi s except i on, a shi powner
woul d have t o prove t hat t he l oss or damage arose wi t hout human
i nt er vent i on. I t i s a si t uat i on whereby an ocureence may t ake
pl ace wi t hout human i nt er vent i on and one whi ch coul d not have
been prevent ed by any amount of human f oresi ght or care of a
reasonabl e nat ure.
e)Act of War. Thi s woul d appear t o be sel f -expl ant or y and can
be def i ned as t o mean l osses due t o war or host i l e si t uat i ons. I t
woul d i ncl ude t he phrase Queen s Enemi es.
f ) Act s of Publ i c Enemi es. I t may be suggest ed t hat t hi s covers
enemi es of t he Queen, or of t he St at e t o whi ch t he carri er
bel ongs.
g) Arrest or restrai nt of Pri nces, Rul ers or Peopl e, or sei zure
under l egal process. Thi s except i on woul d i ncl ude f orci bl e
i nt erf erence by a St at e and t hey i ncl ude such t hi ngs as bl ockage
of di scharg, embargo or arrest of shi ps by t he act i on of a St at e.
h)Quaranti ne Rest ri cti ons. Under t hi s sect i on t he shi powner
may expect t o avoi d l i abi l i t y f or l oss f or damage t o cargo caused
t hrough quarant i ne of t he vessel .
i ) Act or omi ssi on of the Shi pper or Owner of the goods, hi s
Agent or Represent ati ve. I f i t can be proved under t hi s except i on
t hat any act or omi ssi on on t he part of a shi pper was di r ect l y
responsi bl e f or t he l oss or damage t o t he cargo t hen t he carri er
can be rel i eved f rom l i abi l i t y.

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j )Stri kes, or l ock-outs or stoppage or restrai nt of l abour f rom
whatever cause, whether parti al or general . Most of t hi s
st at ement i s sel f -expl anat or y but i t woul d al so i ncl ude any
boycot t .
k)Ri ots and Ci vi l Commoti ons. Thi s part i cul ar except i on woul d
i ncl ude any l ocal di st urbance i n r espect of whi ch i s i ncl ude d
l awl essness and/ or vi ol ence.
l )Savi ng or attempti ng to save l i fe or propert y at sea. At has
already been discussed in this lesson, with regard to the effects of
deviation, this exception gives the shipowner the right to deviate from
the terms of the contract for the said purposes.
m)Wastage i n bul k or wei ght or any other l oss or damage
ari si ng from i nnerent defect, qual i t y, or vi ce of the goods.
n)Insufficiency of packing or inadequenacy of marks. he above
referred exceptions all relate to defences available to the shipowner for
the quoted losses and need little further comment .
p). Latent defects not di scoverabl e by due di l i gence. Thi s
except i on may be best expl ai ned by ref erri ng t o t he case of
Brown & Company Ni t rat e Producers st eamshi p Company (1937).
I n t hi s case cargo was damaged due t o l eakage t hrough ri vet s,
used i n t he const ruct i on of t he vessel , whi ch was l at ent i n nat ure.
Despi t e caref ul i nvest i gat i ons such l eaks coul d not be di scover ed
be t he shi powner i n t he exerci se of due di l i gence and
consequent l y wer e not l i abl e f or t he damage sust ai ned t o t he
cargo.
q)Any other cause ari si ng wi thout the actual faul t of pri vi t y
of the Carri er, or wi thout the faul t or negl ect of the Agents or

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servants of the Carri er, The burden of proof shal l be on t he
person cl ai mi ng t he benef i t of t hi s except i on t o show t hat nei t her
t he act ual f aul t or pri vi t y of t he Carri er nor t he f aul t or negl ect of
t he Agent s or ser vant s of t he Carri er cont ri but ed t o t he l oss or
damage.
Thi s except i on can be ref erred t o as t he Cat ch-Al l Cl ause and i s
t here t o pr ot ect t he carri er f rom responsi bi l i t y f or l oss of damage, of
what ever nat ure t hat may be, whi ch has not al ready been speci f i cal l y
covered by t he Rul es, provi di ng, of course, t hat such l oss or damage
di d not ari se wi t h t he f aul t or pri vi t y of t he carr i er or wi t h t he f aul t or
negl ect of t he agent s or ot her ser vant s of t he carri er.
The Hamburg Rul es The obj ect of t he Hague and Hague- Vi sby Rul es
was t o spel l out t he responsi bi l i t i es and l i abi l i t i es of t he part i es,
part i cul arl y t he carr i er, i n an i nt ernat i onal l y accept abl e way. I n t he
process, t he l i abi l i t i es of t he carri er have been l i mi t ed and i n so doi ng
t hey are i n ef f ect sayi ng t o t he shi pper Ti s i s t he poi nt where my
i nsurance of your goods ends so t hi s must be t he poi nt where yours
must st art . Thi s i s not so onerous as i t mi ght at f i rst sound because i t i s
a f act of l i f e t hat t he premi um charged t o a shi pper f or hi s gods and
t rade, whi ch woul d be wel l known t o hi s i nsurer, wi l l i nevi t abl y be l ower
t han t he premi um i nsurers woul d have t o Cemand f rom t he carri er t o
cover al l t he di f f erent t ypes or goods t hat a shi p mi ght carry. As t he
cost of i nsurance, l i ke any ot her expense, event ual l y has t o be passed
on t o t he shi pper, i t i s bound t o be cheaper f or t he chi pper t o do hi s
own i nsurance. The Rul es hel p al l concerned because t hey know t he
poi nt at whi ch t hei r r i sks begi n and end.
The Uni t ed Nat i ons Counci l f or Trade and Devel opment
(UNCTAD) whi ch i s unashamedl y on t he si de of t he l ess devel oped
nat i ons of t he wor l d, f el t t hat t he Hague- Vi sby Rul es were wei ght ed t oo
much i n f avour of t he carri ers most of whom, i t seemed t o UNCTAD,
were operat ed by t he devel oped nat i ons. I n 1978, t heref ore t he U. N.

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publ i shed a draf t convent i on ent i t l ed t he Hamburg Rul es whi ch wi l l
come i nt o operat i on when t went y st at es r at i f y i t . At t he t i me t hi s l esson
i s bei ng prepared t here do st i l l i nsuf f i ci ent count ri es want t he Hamburg
Rul es t o appl y. Not surpri si ngl y t here i s, i n t he Hamburg Rul es, a cl ear
shi f t of l i abi l i t y on t o t he carri er as wel l as i ncreased l evel s of
compensat i on f or t he merchant . The f ear general l y expressed i s t hat ,
f i rst , t he export ers and i mport ers wi l l be no bet t er of f because t he
carri ers wi l l have t o pass on t hei r i ncreased cost s. Secondl y, and more
i mport ant l y, t he cl auses i n t he Hague Rul es have st ood t he t est of t i me
i n t he l aw count s t hroughout t he wor l d and t he Hague-Vi sby Rul es di d
not al t er t he f undament al s. The Hamburg Rul es, however , i nt roduce
vast unt ri ed areas of pot ent i al l egal di sput e and i n t he words of t he
cyni c I f he Hamburg Rul es come i n, t he l awyers wi l l be l aughi ng al l t he
way t o t he bank.
Sel f Assessment Questi ons
1. Why was i t necessary t o amend t he Hague Rul es and i nt roduce
t he Hague-Vi sby Rul es?
2. What voyages are cover ed by t he Hague- Vi sby Rul es?
3. How i s t he l i mi t of compensat i on cal cul at ed under t he Hague-
Vi sby Rul es?
4. What i s t he purpose of a Hi mal aya Cl ause?
Ti me Charter Cargo Cl ai ms The ri ght s and responsi bi l i t i es enumerat ed
i n t he not es about t he Hague Rul es and t he Hague-Vi sby Rul es appl y t o
carri ers and cargo owners/ shi ppers whet her or not t he vessel i s
empl oyed on voyage or on t i mechart er t erms and condi t i ons. However,
where t i mechart er appl i es, t here i s a compl i cat i on because t he carri er
can be def i ned a ei t her t he t i mechart erers i n t he rol e of di sponent
owner, or t he act ual owners t hemsel ves. I ndeed some cl ai ms can ari se

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due t o def aul t by t he t i mechart erers whi l st ot hers may be ent i rey t he
shi p s f aul t .
Accordi ngl y, and i n order t o avoi d any mi sunderst andi ng where
si mul t aneous dual negot i at i ons mi ght be carri ed out bet ween an
aggri eved cargo-owner and bot h t he act ual and t he di sponent owners, a
code of pract i ce has grown up around t he New York Produce Ti me
Chart erpart y, i nt o whi ch i t i s common t o i ncorporat e t he I nt er Cl ub New
York Produce Exchange Agreement , a copy of whi ch i s i ncl uded as
Appendi x 8. 5. The I nt er Cl ub Agreement was l ast amended i n 1984 and
set s out what i s t o happen i n t he event t hat cargo cl ai ms are l odged
agai nst t he carr i er. I t al so set s out t he r esponsi bi l i t i es and l i abi l i t i es i n
t he rel at i onshi p bet ween t he t i mechart erer and t he shi powner. I t i s
i mport ant t o t ake t he t i me t o read and underst ands t he I nt er -Cl ub
Agreement , especi al l y i f becomi ng i nvol ved wi t h t i mechart eri ng, and
part i cul arl y t o real i ze t he si gni f i cance of t he i ncl usi on or absence of t he
words and responsi bi l i t y i n Cl ause 8 of t he NYPE C/ P and/ or t he
words Cargo cl ai ms i n t he second set ence of Cl ause 26.
Ti me Bars Under Engl i sh l aw t her e i s a one year t i me l i mi t f or
chart erers and/ or cago owners t o bri ng cl ai ms agai nst carri ers or
shi powners. Thi s may, however, be exceeded i n cert ai n ci rcumst ances
under t he t erms of the Arbi t rat i on Act , 1950 , i f an Engl i sh arbi t rat i on
appl i es and i f t he cl ai mant can show t he court t hat undue hardshi p
mi ght ot her wi se occur. General l y t hough, one year t i me l i mi t at i ons
means what i t says f or chart erers, al t hough many f eel i t t o be unf ai r
t hat shi powners ar e not prevent ed f rom bri ngi ng cl ai ms agai nst
chart erers i n si mi l ar ci rcumst ances. However, i n regard t o t he I nt er
Cl ub Agreement , t here i s a provi si on i n respect of a t i me-bar i n whi ch
cl ai ms ar e subj ect t o a t i me-bar of t wo years, no mat t er whet her t hey
are made by owners or by chart erers.

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Test Questi ons
Havi ng compl et ed Lesson Ei ght , at t empt t he f ol l owi ng and submt your
essays t o your Cour se Tut or.
1. An ori gi nal bi l l of l adi ng i s not avai l abl e upon t he arri val of M. V.
SANDERLI NG at a West Af ri can Port t o di scharge 20, 000
t onnes bagged ri ce.
Di scuss t he l i kel y cause of t hi s si t uat i on and t he pr act i cal st eps
whi ch may be t aken t o resol ve t he probl em.
2. Suggest a si t uat i on (i magi nar y) where t he Hi mal aya cl ause
coul d pr ovi de prot ect i on and anot her si t uat i on where i t woul d not
hel p at al l .

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Dat e . Messrs . .
Port . .

Dear Si rs,

Thi s wi l l ser ve as my aut hori zat i on t o si gn by and on my behal f
t he Bi l l (s) of Ladi ng whi ch t he Shi pper may prent t o you f or cargo
l oaded on board M. V. . . under my command. Thi s si gnat ure may
onl y be gi ven af t er ensur i ng t hat t he f ol l owi ng i t ems ar e proper l y
i nsert ed and ar e corr ect : -

Name of t he carr i er; name of t he vessel name of t he shi pper and
of t he consi gnee; l oadi ng port l di schargi ng port (or when f or orders t he
posi t i on where di schargi ng port or ders can be obt ai ned); descri pt i on of
cargo, quant i t y, number, wei ght , marks and superf i ci al r ecogni zabl e
condi t i on; t erms of f rei ght payment ; pl ace and dat e si gned; number of
si gned, or i gi nal bi l l s of l adi ng.

Pl ease not e t hat you do not have aut hori t y t o si gn any bi l l of l adi ng
whi ch does not speci f i cal l y i ncorporat e t he t erms, condi t i ons and
except i ons of t he chart erpart y dat ed . and/ or The Hague/ Vi sby
Rul es (or l egi sl at i on of si mi l ar ef f ect .

On no account shoul d f rei ght prepai d bi l l s t o i ssued wi t hout t he
express aut hori t y of my owners, t o whom you shoul d ref er on t hi s or on
any ot her mat t er concerni ng t he si gni ng and i ssui ng of t he bi l l s.

As t o t he condi t i on of t he goods, t he st at ement s t he mai n have t o
correspond wi t h t he si gned mat e s or t al l y cl erk s recei pt s, and where
no such recei pt i s i ssued, t o my personal remarks, whi ch I wi l l bri ng t o
your at t ent i on i n wri t i ng i f t he goods recei ved cannot be t rut hf ul l y
descr i bed as bei ng i n APPARENT GOOD ORDER AND CONDI TI ON.
Your are not ent i t l ed t o si gn a bi l l of l adi ng ot her t han i n APPARENT
GOOD ORDER AND CONDI TI ON or wi t h my personal remakrs. The
cargo wei ght shoul d be qual i f i ed by WEIGHT UNKNOWN.

Recei pt Conf i rmat i on:
Dat e & Pl ace: .
Si gnat ure & St amp: . .
Yours f ai t hf ul l y,
Mast er M. V. . .

cc: Owners.

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To .
The owners of M. V. .

Dear Si rs,

M. V.
Goods . .
No. .
Descr i pt i on
Marks . .


The above goods ar e shi pped on t he above vessel by Messr s .
But t he rel evant bi l l s of l adi ng have not yet arri ved.
We hereby request you t o del i ver such goods t o . . wi t hout product i on
of t he bi l l s of l adi ng.
I n consi derat i on of your compl yi ng wi t h our request we hereby agree as
f ol l ows : -
1. To i ndemni f y you, your ser vant s and agent s and t o hol d al l of you
harml ess i n respect of any l i abi l i t y, l oss or damage or what soever
nat ure whi ch you may sust ai n by r eason of del i ver i ng goods t o . i n
accordance wi t h our request .
2. I n t he event of any proceedi ngs bei ng commenced agai nst you or
any of your ser vant s of agent s i n connect i on wi t h t he del i ver y of t he
goods as af oresai d t o provi de you or t hem f rom t i me t o t i me wi t h
suf f i ci ent f unds t o def end t he same.
3. If t he shi p or any ot her shi p or propert y bel ongi ng t o you shoul d
be arrest ed or det ai ned or i f t he arrest or det ent i on t hereof shoul d be
t hreat ned t o provi de such bai l or ot her secur i t y as may be requi red t o

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prevent such arrest or det ent i on or t o secure t he rel ease of such shi p or
propert y and t o i ndemni f y you i n respect of any l oss, damage or
expenses caused by such arrest or det ent i on whet her or not t he same
may be j ust i f i ed.
4. As soon as al l or i gi nal bi l l s of l adi ng f or t he above goods have
arri ved and/ or come i nt o our possessi on, t o produce and del i ver t he
same t o you whereupon our l i abi l i t y hereunder shal l cease.
5. The l i abi l i t y of each and ever y person under t hi s i ndemni t y shal l
be j oi nt and several and shal l not be condi t i onal upon your proceedi ng
f i rst agai nst any per son, whet her or not such person i s part y or l i abl e
under t hi s i ndemni t y.
6. Thi s i ndemni t y shal l be const rued i n accordance wi t h Engl i sh Law
and each and ever y person l i abl e under t hi s i ndemni t y shal l at your
request submi t t o t he j uri sdi ct i on of t he hi gh court of j ust i ce of Engl and.
Yours f ai t hf ul l y,

Si gned . .
Dul y aut hori zed and on behal f of
Name and address
company t o whom
goods del i vered

We j oi n i n t he above guarant ee





For t he . . Bank

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Manager.



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CHAPTER- 9
WORLD TRADES
I ntroducti on I t i s essent i al t hat t hose engaged i n dr y-cargo chart er i ng
have a good worki ng knowl edge of rel evant wor l d t rades and t he
mari t i me envi ronment i n whi ch t hey operat e. Al ready i n t hi s course, we
have t ouched upon numerous aspect s of t he subj ect and t he book
CARGOES act s as a l i nk bet ween t hese papers and t he act ual
commodi t i es i nvol ved i n dr y-cargo t rades. Thi s l esson ai ms t o set out
essent i al s, al t hough dai l y worki ng ef f i ci ency i n t hi s i mport ant
commerci al shi ppi ng act i vi t y wi l l be great l y enhanced by t he use of : -
A) A Mar i t i me At l as (such as Ll oyd s Mar i t i me At l as or The
Shi p s At l as).
B) A set of Mar i t i me Di st ance Tabl es (such as Reed s).
C) A book on Mari t i me Commodi t i es (f or exampl e Cargoes
t he second vol ume i n t he SEA TRADI NG seri es, and whi ch you
have been gi ven wi t h t hi s Course.
D) A Load-l i ne Map (somet i mes cont ai ned i n Mar i t i me At l ases.
E) An I nst i t ut Warrant y Li mi t s Map (al so somet i mes cont ai ned
i n Mari t i me At l ases).
F) A book on Part I nf ormat i on (Ll oyd s and Fai rpl ay each
publ i sh such a book, whi l st t her e i s al so a si mi l ar publ i cat i on by
Shi ppi ng Gui des, t he publ i shers of The Shi p s At l as).

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G) Shi ppi ng magazi nes and newspapers, al so your dai l y
newspaper. Have an enqui r i ng mi nd and seek out t he l ocat i on and
act i vi t i es of a st range port , t he use of an unf ami l i ar commodi t y,
i t s carri age requi rement s, et c.
The Dry Cargo Tramp Trades There ar e many dr y-cargo t ramp t rades
some i nt ernat i onal , some l ocal . Because of t he di ver si y of t he
background of t hose t aki ng t hi s course (where, f or exampl e l ocal t rades
af f ect i ng t hose i n t he East er n Medi t erranean wi l l not part i cul ar l y af f ect
or i nt erest t hose i nvol ved i n l ocal t rades around Japan and Korea and
vi ce versa) t he i nt ent i on of t he f ol l owi ng pages i s t o concent rat e on
i nt ernat i onal i t y i mport ant t rades rout es and commodi t i es. Thi s wi l l be
t ackl ed i n t wo st ages. Fi rst f rom t he aspect of a commodi t y ( perhaps of
most i nt erest t o a chart erer or t rader i n t hat commodi t y), and secondl y
f rom t he aspect of type/ si ze of vessel (i . e. f rom t he shi p owner s, shi p
operat or s vi ewpoi nt ) .
You shoul d set yoursel f t he t ask of readi ng f i xt ure and market
report s t hat appear i n shi ppi ng publ i cat i ons and, f rom t hese, you wi l l
l ear n of some of t he maj or port s i nvol ved i n t he shi pment and del i ver y
of any part i cul ar commodi t y, as wel l as t he speed of cargo handl i ng at
port s i nvol ved and t he pref erred si ze of vessel .
Cargoes for Shi ps The t hree maj or seaborne t rade dry-cargo
commodi t i es (i n t er ms of vol ume) are i r on ore, coal and grai ns i n t hat
order. You have l ear ned about t he shi ps t hat carr y such cargoes earl i er
i n t hi s Course, as wel l as about t he commodi t i es t hemsel ves f rom
CARGOES. I t i s now necessar y t o compl et e t hat dat a wi t h
consi derat i on of t he act ual t rades arranged around t hese t hree maj or
commodi t i es.
I ron Ore : Ore i n i t s var i ous f orms comes mai nl y f rom devel opi ng
nat i ons, such i s Brazi l , Venezuel a, West and Sout h-East Af ri ca and
I ndi a, al so f rom advanced nat i ons such as Aust ral i a and Canada and, t o

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a l esser ext ent , f rom Scandi navi a. The recei vi ng end of such voyages i s
al most al ways one of t he maj or i ndust ri al i zed count ri es, such as i n
Europe, t he Uni t ed St at es of Ameri ca, or Japan. However, raw,
unref i ned ores are f requent l y part l y processed i nt o commodi t i es such as
si nt er, pi g i ron, pel l et s or concent rat es, of t en at processi ng pl ant s i n
devel opi ng nat i ons, bef ore bei n carri ed onwar ds i n ot her shi ps t o t hei r
event ual dest i nat i ons.
The advant ages of t hi s f i rst processi ng st age t aki ng pl ace i n t he
count r y of ori gi n ar e t heef ore t hreef ol d. The export i ng count ry earns
vi t al f orei gn exchange as a resul t of the added val ue, t he i mport i ng
count r y saves t he cost of t hi s pr ocessi ng st age and t he i r on cont ent of
t he cargo i s consi derabl y i ncreased t hus savi ng f rei ght i ng cost s. I n t he
modern port of shi pment f or i ron ore, cargoes are l oaded at great
speed, usual l y by a chut ef ed by conveyors, wi t h t he ore dr opped f rom
gret hei ght . Tri mmi ng i s rarel y requi r ed i n modern bul kcarri ers as
i nst al l at i ons are usual l y f l exi bl e enough t o di st r i but e t he cargo f ai rl y
evenl y i n cargo hol ds duri ng l oadi ng. You wi l l of t en f i nd t he st i pul at i on
i n chart er i ng negot i at i ons t hat t he cargo has t o be spout t ri mmed at
l oadi ng port . Because of t he speed at whi ch l arge bul kers are l oaded,
t hey requi re t he f aci l i t y t o change t ri m r api dl y t o preser ve t hei r saf et y,
and hi gh capaci t y bal l ast pumps ar e usual l y f i t t ed f or t hi s pur pose. Al so
f requent draf t checks may be requi red as t he vessel nears f ul l cargo,
and al l owance shoul d i deal l y be made f or t he t i me t aken on such
sur veys i n t he chart erpart y l ayt i me cl auses
Di scharge of i ron ore i n al l except t he smal l est port s i s handl ed
by sophi st i cat ed equi pment , al t hough t he one common el ement i s t he
grab. Havi ng sai d t hat , i t i s not possi bl e t o descri be t he many syst ems
avai l abl e, whi ch vary f rom t he common sl ewi ng crane t o hi ghl y
speci ai sed t ransport ers. To some ext ent , t he met hod used wi l l depend
on t he t ype of i nl and t ransport bei ng used, but t he appet i t e of t he st eel
i ndust r y i s voraci ous, and speed of t urround i s essent i al . Consequent l y,
i t i s not unusual f or cargoes i n excess of 200, 000 t onnes of i ron ore t o

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be l oaded and di scharged wi t hi n a f ew days, perhaps at rat es
approachi ng 50, 000 t onnes dai l y.

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The syst em ut i l i zed f or wei ghi ng cargo duri ng di scharge i s
equal l y, al t hough a l arge proport i on goes t hrough hoppers where i t can
be wei ghed i n t ransi t . Maj or sources of i ron-ore export s are: -
Brazi l Pont a do Ubu, Tubarao, Sebet i ba Bay
Venenul al a Ori noco port s
Maur et ani a Nouadhi bou
Li beri a Monr ovi a
Sout h Af ri ca Sal danha Bay
I ndi a New Mangal or, Mornugoa
Aust ral i a Dampi er, Cap, Lambert
Canada Seven I sl and
Sweden Lul ea
Nor way Nar vi k
I t i s di f f i cul t t o predi ct f ut ure devel opment i n t he i ron ore t rades,
because a number of nat i ons possess ver y l arge reser ves but t hese
have yet t o be expl oi t ed. Thi s i s l argel y due t o t he cost and t he
i naccessi bi l i t y of t he deposi t s but , as t he more easi l y t apped resources
decl i ne, t he i ncent i ve wi l l i ncrease t o devel op new suppl i es. Much wi l l
t hen depend on t he pol i t i cal wi l l of t he count ri es concerned us t o
whet her t hey wi sh t o t ake advant age of t he hi gh t echnol ogy avai l abl e
i nt ernat i onal l y. The t wo i mport ant consumers of coal f rom t he chart eri ng
aspect are t hose i nt endi ng t o use i t as a pri mar y f uel and t he el ect r i ci t y
i ndust r y nat ur al l y t he bi ggest i n t hi s group. The ot her i s t he st eel
i ndust r y whi ch convert s t he coal i nt o coke f or use i n bl ast f urnaces.
Coal i s f ound i n var yi ng quant i t i es on al l cont ei nent s and i n many
count ri es. The areas whi ch produce an export abl e surpl us, however, are
l ed by t he Uni t ed St at es of Ameri ca, Aust ral i a, Sout h Af ri ca, Canada,
Russi a and Chi na. Export s f rom t he Uni t ed Ki ngdom (once a maj or
export er) have dwi ndl ed al most t o ext i nct i on, and Pol i sh export s are f ar
l ess t han a deade age. However, new sources are bei ng expl oi t ed, wi t h
Venezuel a, Col ombi a and I ndonesi a seemi ng set t o become maj or
pl ayers i n t hi s market arena. The pat t ers of shi pment are di ct at ed by t he

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consumpt i on of t he mai n i ndust ri al cent ers of t he wor l d, wi t h Japan and
t he EEC nat i ons pr edomi nant i n t hi s respect . However, t he vol ume of
i mport s does not necessar i l y bear any rel at i on t o t he overal l
consumpt i on of coal because, i n West ern Eur ope, f or exampl e, a l arge
port i on of requi rement s i s obt ai ned f rom i ndi genous sources. Japan i s
f ar l ess f ort unat e i n t hi s respect , needi ng t o i mport much l oad and i r on
ore t o ser ve i t s i ndust ri al requi rement s.
Geographi cal ane economi c f act ors al so pl ay t hei r part , wi t h t he
resul t t hat Europe recei ves i t maj or i mpor t s f rom t he Uni t ed St at es, wi t h
Japan and t he Far East rel yi ng more on sources i n Aust ral i a, West ern
Canada, Chi na and East ern Russi a and, t o a cert ai n exent , Sout h
Af ri ca.When consi deri ng t he demand f or coki ng coal and i ron ore, i t wi l l
become obvi ous how t he heal t h of t he t ramp market depends on t he
success or f ai l ures of t he st eel i ndust ry. I n t heor y, t heref ore, a
recessi on i n st eel maki ng woul d aut omat i cal l y have a knock -on ef f ect
on t he demand f or bul kcarri er space. But , as al ways, t he si t uat i on i s not
necessari l y so si mpl e. Of t en at such t i mes, i t i s f ound t hat a count er
bal ance i s provi ded by, say, an i ncrease i n demand f or grai n.
The mai n port s of l oadi ng f or coal i n t he Uni t ed St at es are i n t he
area known as Hampt on roads, part i cul ar l y t he port s of Norf ol k and
Newport News, as wel l as nearby Bal t i more and Phi l adel phi a.
Si gni f i cant quant i t i es al so or i gi nat e i n t he huge Mi ssi ssi ppf Ri ver basi n,
bei ng export ed vi a New Orl eans and Mobi l e, i n t he Uni t ed St at es Gul f ,
al so vi a Long Beach and Los Angeles from the United States West
Coast.The traditional Australian coal exporting ports are in New South
Wales, comprising Newcastle, Port Kembla and Gladstone, but during the
past decade hugh deposits have been exploited in Quensland, and ports
such as Hay Point and Abbots Point have been established, trading to and
from these ports being facilitated by the discovery of deepwater navigation
channels (eg Hydrographers Passage) through the Great Barrier Reef.
Sout h Af ri ca has great l y enhanced i t s exhort at i on pot ent i al by t he

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openi ng of t he speci al i zed Ri char ds Bay t ermi nal near Dur ban, whi l st
Canada now has t he rort of Robert sbank, near Vancouver. Russi a
export s f rom t he Bl ack Sea but i mport ant l y, as part of an expandi ng
t rade, vi a t he Far East ern port of Vost ochny (near Vl adi vost ock),
handi l y pl aced t o meet t he demands of Japan and Korea. Chi na i s al so
devel opi ng i t s coal export s, mai nl y f rom nort hern Chi nese Port s, such
as Qi nghauangdao (Chi nwangt ao), but coal export s are set t o become
i ncreasi ngl y i mport ant f rom Asi an nat i ons wi t h I ndonesi a geari ng up i t s
product i on and export f aci l i t i es and coal occasi onal l y export ed al so
f rom Vi et nam.
I ndi a, once an i mport ant export er t hrough i t s east ern por t of
Cal cut t a, now r equi r es i nt ernal l y al l t he coal i t can produce and i s an
i mport ant cust omer f or Aust ral i an coal , whi ch i s usual l y t ransport ed t o
I ndi a i n shi ps hi t t ed wi t h sel f -di schar gi ng capabi l i t i es t o over come
i nadequat e port f aci l i t i es on t he sub-cont i nent . The f ut ure of coal i s
reasonabl y bri ght despi t e i t s mai n di sadvant age when compar ed wi t h oi l
as a pri mar y f uel i n t hat t he t ranspor t at i on of coal f rom souce t o
consumer i s more compl ex. To t hi s must be added t he need f or more
sophi st i cat ed appl i ances f or burni ng i t (many power st at i ons have t o
gri nd coal t o f i ne dust bef ore put t i ng i t i nt o t he f urnace) and t hen t her e
i s an ash di sposal probl em. Nevert hel ess, coal i s obt ai nabl e f rom so
many di f f erent areas t hat i t canot be used as a pol i t i cal weapon as we
have seen happen wi t h oi l .
Coal i s usual l y brought t o t he l oadi ng port i n rai l wagons t hen
l oaded vi a a chut e or conveyor. Di schargi ng i s normal l y by shore cranes
equi pped wi t h grabs. Much t hought i s devot ed t o speedi ng up t he
handl i ng process and sel f -unl oadi ng carri ers may be one answer but
t hey are, by t hei r very nat ur e, of hi gher capi t al val ue and t hus we are
back agai n t o cost . I t may wel l be t hat exper i ment s wi t h t ransport at i on
i n sl urr y f orm, or other met hods of l i qui f l yi ng coal may be successf ul
and permi t t ankers t o carr y coal , al t hough t here are many probl ems t o
be overcome bef ore t hi s wi l l be commonpl ace, i f ever.

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I t i s not possi bl e t o general i ze on met hods of i nl and
t ransport at i on of coal ei t her pr i or t o shi pment or af t er del i ver y al t hough,
i n vi ew of t he l arge quant i t i es handed, probabl y r ai l or canal t ransport
wi l l be ut i l i zed. Li ke so many bul k commodi t i es, one maj or probl em i s
t hat of st orage space and, si nce l and i n i ndust r i al ar eas t ends t o be
expensi ve, i t i s usual l y vi t al t hat such space i s kept t o a mi ni mum. Thi s
necessi t at es an ef f i ci ent syst em of co-operat i on bet ween t he mi nes,
i nl and t ransport , t he l oadi ng f aci l i t i es and shi p owner, perhaps bei ng
more vi t al i n respect of coal i ndust r y t han any ot her. I t i s, i n f act ,
general l y supposed t hat t he expressi on subj ect st e or i gi nat es f rom t he
coal t rade, when i t became necessar y f i rst t o secure a shi p on t hi s
subj ect bef ore f i nal i zi ng t he whol e operat i on t o pr ovi de t hat vessel
wi t h her cago.
Pet rol eum coke t ends t o be consi dered as part of t he coal
market but , as t he name i mpl i es, i t i s i n f act a by-product of oi l
ref i ni ng. I t i s export ed f rom t hose areas where maj or ref i ner i es exi st i n
part i cul ar f rom bot h coast s of t he USA i ncl udi ng t he US Gul f ; Europe
and Japan are t he maj or i mport ers. I t i s produced i n vari ous grades
dependi ng upon t he desi gn of t he ref i nery and i s not t he most popul ar
of cargoes wi t h owners. Some t ypes are granul ar (up t o about 5mm)
and are rat her oi l y whi l st ot hers are ver y f i ne whi ch cause a dust
probl em. I t has several uses because i t i s a source of al most pure
carbon and one of i t s pr i nci pal appl i cat i ons i s i n t he manuf act ure of
el ect rodes f or use i n t he ref i ni ng of al umi ni um.
Grai n. As i t appl i es t o ocean t ransport , grai n i ncl udes wheat , rye, corn,
sorghums, barl ey, oat s ri ce and oi l seeds (t he l at t er akt hough not
t echni cal l y grai n i s consi dered such f rom a chart eri ng poi nt of vi ew). A
pat t ern of grai n t radi ng has emerged duri ng t he 20
t h
cent ury, mai n
producers bei ng Chi na, Russi a, I ndi a. The Uni t ed St at s, Canada,
France and Argent i na. Much of t hi s product i on i s needed cl ose t o home,
however, and maj or export ers are t he Uni t ed St at es, Canada, Aust ral i a,
Argent i na and France. Maj or i mport ers at present are Japan, Chi na, t he

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EEC, Nort h Af ri can count ri es and t he Mi ddl e East , Brazi l and, above al l ,
Russi a. I n addi t i on, t here are speci f i c emergency t rades devel oped t o
areas of t he wor l d where l ocal f ami nes and di sast er s occur, of t en
organi zed by t he Worl d Food Agency, par t of t he Uni t ed Nat i ons.
The l argest phenonmenon of t he post - war decades, however , has
been an ever -growi ng t rend i n f ormer devel opi ng nat i ons, as t hei r
prosper i t y has i ncreased, t o r ef use t o be cont ent eat i ng bread, ri ce or
mai ze as a st apl e di et and t o seek i nst ead meat , or meat product s,
poul t ry and eggs. Thi s evol ut i on; t ransl at ed i nt o t ranspor t at i on and
grai n l ogi st i cs, has creat ed f undament al changes i n t rade. Cat t l e and
poul t ry f eeds ar e mai nl y suppl i ed by corn, sorghum, bar l ey and ot her
coarse grai ns, i n addi t i on t o soyabeans and ot her oi l seeds, and a
combi nat i on of t hem al l by way of deri vat i ves such as meal s, expel l ers
and oi l cakes. The mai n export ers of these product s are t he Uni t ed
St at es, Argent i na, Brazi l and Thai l and. Among t he heavi est i mport ers;
Russi a, t he EEC, Japan, Chi na and Tai wan.
I n t he mai n grai n l oadi ng port s of t he worl d, t he cargo i s br ought
t o sea boad t ermi nal s by r ai l , road or barge. The sphi si cat ed and
devel oped nat i ons have an i nt ernal net work of count ry el evat ors, whi ch
are i n ef f ect col l ect i ng poi nt s f or l ocal har vest i ng cent ers. These are
l i nked t o t he seaboard wi t h an i nt ensi ve bul k grai n t ransport
i nf rasruct ure rai l si di ngs, speci al i zed grai n hopper rai l cars, bul k grai n
road t ransport or speci al grai n bar ges where ri ver t ransport i s
appropr i at e.Where st orage i s i nadequat e, surpl us st ocks ar e hel d i n a
var i et y of al t ernat i ve f aci l i t i es, t emporari l y modi f i ed and pr essed i nt o
ser vi ce eg redundant f act ori es. Teri nal s at sea port s are most l y
modern and use ext remel y hi ghspeed el evat ors, equi pped t o unl oad
i nl and t ransport and t ransf er t he commodi t y i nt o shi ps.
Any port congest i on, whi ch seems a r ecurri ng probl em i n grai n, i s
due t o great er demands bei ng pl aced on t he i nt ernal and seaboard
el evat or capaci t i es t han can possi bl y be accommodat ed, due of t en t o

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commerci al pr essur es or t o grai n pr i ce st ruct ures. When one real i zes
t han an average l oadi ng rat e i n Nort h Ameri can port s, f or exampl e, i s
bet ween 10, 000 and 20, 000 dai l y, i t can be seen t hat t he maj or cause
f or congest i on i s not i n a capaci t y of t he shore equi pment . As f ar as
di schargi ng i s concerned, met hods var y consi derabl y. I n more
devel oped nat i ons, f or exampl e t he EEC and Japan, di schar ge may be
perf ormed by st at i c or t ravel i ng sect i on unl oaders. Some, however, may
be bucket el evat or t ype. Conveyor bel t s are used t o t ransshi p t he grai n
f rom oceangoi ng vessel coast ers or t o i nl and t ransport t o st ore i n
associ at ed grai n si l os.
I n Venezuel a and part s of Sout h Korea di scharge of grai n may be
ef f ect ed by use of port abl e Buhl ers ( SKT machi nes) hel d vert i cal l y i nt o
t he vessel s hol ds by t he shi p s gear, and di scharged di rect t o road
t ransport . The usual met hod t hat i s empl oyed by Russi a and by many
devel opi ng count ri es i s t hat of di schargi ng by crane and cl amshel l
grabs i nt o hoppers on t he decks, f eedi ng di rect t o road t ransport , or
f rom hoppers t o sacki ng machi nes, wi t h t he bars bei ng st acked i n
adj oi ni ng warehouses. There ar e al so port abl e suckers (Vacuvat or
t ype), smal l pneumat i c vacuum cl eaner t ype machi nes on wheel s, l i f t ed
on t o a vessel by shore cranes or shi p s gear, and moved on deck f rom
hol d t o hol d. I n some port s usi ng t hi s met hod, t he gran can ei t her be
bagged by hand on t he dock and st acked i n a warehouse or st ored
t here i n bul k. Vacuvat ors are powered ei t her by i nt ernal combust i on
engi nes or by el ect ri ci t y.
I n some of t he more pri mi t i ve port s, cl amshel l grabs are f i t ted t o
shi p s gear and grai n di scharged i n bul k as al ready descr i bed when
usi ng shore canes. There are st i l l some port s where grai n i s sacked i n
t he hol ds and di scharged by sl i ng (ei t her by shore cranes or shi p s
gear) and of t en t he case wi t h ai d cargoes t o f ami ne af f ect ed
areas. Port s t hrough whi ch grai n i s export ed i ncl ude : -
Uni ted Stat es: Mi ssi ssi ppi Ri ver del t a, Houst on, Bal t i more,

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Norf ol k, Seat t l e, Por t l and. (Oregon)
Canada : Thunder Bay (Great Lakes), Churchill (Hudson Bay),
Montreal, Quebec, Sorel (Upper St Lawrence River), Seven Islands,
Baie Comeau (Lower St. Lawrence Ri ver).
Austral i a : Fremant l e, Bunbur y, Esper ance, Adel ai de, Port l and,
Geel ong.
Argenti na : Rosari o, Buenos Ai res, Bahi a Bl anca.
Brazi l : Sant ons, Ri o Grando do Sul .
France : Rouen, Le Havre.

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Where nat i ons wi t h poor i nl and f aci l i t i es are i nvol ved and t hi s i s
usual l y t he case wi t h ai d cargoes bags are f requent l y t he onl y
pract i cabl e met hod of movi ng grai n about . Consequent y, t he grai n may
be l oaded i n bul k and bagged l at er at t he dest i nat i on port , or bagged at
t he st art of t he j ourney, i n t he l oadi ng port i t sel f . Usual l y al so t hese
bags are of t he si ze t hat can be conveni ent l y moved by manpower al one
eg 50 ki l os each. Chart erpart i es wi l l of t en i ncl ude a cl ause t hat ext ra
bags are t o be carried (usually free of charge) in case of demage or splitting
of bags when they are moved, as well as in some cases, the carriage of
needless and twine, so that bags can be filled and fastened, to pr event
spillage of their contents.It is unusual these days for more than one grade of
grain to be carried in the same cargo compartment but, where this is
required, separations will have to be employed usually tarpaulins or some
similar material, great care being traken to avoid a mixture of separate
commodities. Responsibility for the risk and cost of this exercise (cost of
labour as well as cost of material) should be considered negotiated, and
entered in the cont ract .
Agri cul tural Products These are var i ed and, i ndeed, an ent i re chapt er
i s devot ed t o such commodi t i es i n CARGOES. From a vol ume poi nt of
vi ew, per haps t he most si gni f i cant ar e sugar and t api oca. Sugar i s
carri ed i n sea-goi ng vessel s i n ei t her i t s raw bul k st at e usual l y cane
sugar but ver y occasi onal l y beet sugar f rom an area of product i on t o
a ref i ni ng si t e ( eg Tat e & Lol e cane sugar f rom Mauri t i us or Fi j i t o t he
Si l vert own Ref i ner y on t he Ri ver Thames, London); or ref i ned, usual l y
bagged sugar, f rom a ref i nery t o a consumi ng nat i on. Man y export i ng
nat i ons of bul k raw sugar empl oy mechani cal i nst al l at i ons when t he
product i s carri ed on a movi ng band bef ore droppi ng t hrough a spout
i nt o a vessel s hol ds. Somet i mes spreaders ar e used t o di st ri but e t he
sugar i n t hose hol ds, t hereby i mpr ovi ng t he t ri mmi ng and obt ai ni ng a
bet t er st ow.
Di scharge of bul k, raw sugar i s ef f ect ed by grabs, t he cont ent s
bei ng dropped i nt o hoppers t hat empt y on t o a movi ng band vi a a wei gh

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t ower i nt o t he ref i ner y, st orage area, or onward t ransport at i on
vehi cl e. Many t ropi cal areas pr oduce and export bul k sugar eg f rom
t he Car i bbean and t he Nort h Coast of t he Sout h Amer i can Cont i nent (eg
Barbados and Geor get own, Guyana); f rom t he i sl ands of t he I ndi an
Ocean ( Maurt i us and Reuni on); f rom Sout hern Af ri ca (eg Swazi l and) v i a
port s such as Durban; f rom Bangkok, Thai l and; f rom Fi j i ; f rom t he
Phi l i ppi nes; f rom Queensl and ( Aust ral i a) ; and f rom razi l (eg Sant os or
Reci f e). Maj or i mport ers i ncl ude t he Uni t ed Ki ngdom, France and t he
Uni t ed St at es of Ameri ca.
Tapi oca i s anot her prol i f i c t ropi cal pl ant , al t hough f or seaborne
purposes, by f ar t he l argest export er i s Thai l and; export s bei ng t hrough
t he port of Bangkok (t o 26 f eet f resh dept h of wat er) or, more f requent l y
gi ven t he si ze of vessel s engaged i n t hi s t rade, vi a Kohsi chang,
downr i ver of Bangkok, wher e l arge shi ps can l oad. A Thai l and rank onl y
sevent h i n t erms of wor l d product i on but , f rom an export i ng poi nt of
vi ew, has 80 percent of t he market , much of i t s export s dest i ned f or
EEC ani mal f eed purposes. Wi t h const ant worl dwi se pressure t o reduc
or el i mi nat e al t oget her grant s and subsi di es t o f armers, t hi s t rade may
change dramat i cal l y, but whi l st t he EEC i s geared t o mai nt ai ni ng grai n
pri ces at hi gh l evel s t o prot ect domest i c producers, it wil l remain
economically attractive for European animal feed compounders to substitute
cheap imports of protein and energy feedstock such as tapioca for eventual
food for pigs and cattle, rather than use the more expensive locally grown
grai n.
Whereas l arge vessel s - commonl y panamax or capesi ze
bul kcarri ers - are used f or t he transport at i on of t api oca f rom Thai l and t o
t he EEC, ot her nat i ons i n t he area - eg Mal aysi a and I ndonesi a -
commonl y use handy-si zed bul kcarri ers of around 20/ 40, 000 dwt . t o
carry a var i et y of agri cul t ural product s i n each shi pment (usual l y
separat ed nat ural l y hol d by hol d) f or such as copra deri vat i ves,
t api oca, et c. ) t he reasons bei ng t wof ol d. Fi rst , t he shore-based
i ndust r y i s not so mechani sed i s i n Thai l and and, secondl y, t he port s

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are not so deep-draf t ed and wel l -equi pped wi t h l oadi ng equi pment as i s
Kohsi chang. I n f act , a vessa1 engaged i n t he carri age of agri -prods
f rom I ndonesi a may need t o l oad at several port s t o obt ai n a f ul l cargo.
Forest Products Thi s i s t he name gi ven general l y t o any wood deri ved
product . Just l i ke t he ot her t rad7es, f orest product s can be di vi ded i nt o
t hose appert ai ni ng t o raw mat eri al s and processed goods.
Raw Materi al s : Much dat a wi l l be f ound i n t he rel evant chapt er i n
CARGOES but , i n t radi ng t erms, raw f orest product s can be sub-
di vi ded bet weet r oundwood (l ogs), sawn t i mber, pul pwood, and
woodchi ps. The mai n recei vers of t hese di verse mat er i al s are Europe,
t he Fa East and Nort h Ameri ca, wi t h around hal f t he worl d s
requi rement , bei ng met f rom Nort h Ameri can and Scandi navi a, or i g i ns;
al t hough t here i s a t hrowi ng l og t rade f rom t he West Coast , of Sout h
Ameri ca where Chi l e i s a maj or export er.
Those areas suppl y pri nci pal l y sof t wood and we have t o t urn t o
t ropi cal and sub-t r opi cal areas, such as Cent ral Ameri ca, Guyana,
Brazi l , West Af ri ca, I ndi a, Burma, Mal aysi a and I ndonesi a f or hardwood
sources. Ther e i s no set pat t ern f or hardwoods as, unl i ke sof t woods
whi ch are f ast growi ng and so can be produced as a crop i n readi l y
accessi bl e ar eas, hardwood t rees are dot t ed around vari ous f or est s, are
more di f f i cul t t o l ocat e, havi ng to be i ndi vi dual l y f el l ed and
t ransport ed t o an export i ng l ocat i on. Consequent l y, hardwoods t end t o
be shi pped as l i ner parcel s, al t hough t here are f ul l cargoes i n t hi s
commodi t y, pri nci pal l y f rom West Af ri ca and f rom t he Ri ver Amazon
basi s.
Sof t woods are f requent l y sawn bef ore shi pment and an i ncreasi ng
amount moves i n sawn condi t i on di rect t o a conveni ent di st r i but i on
pl ace i n an i mport i ng areas, rat her t han t o sawmi l l s l ocat ed i n t hose
recei vi ng regi ons. Not hi ng i s wast ed and t he sawdust and general
remai ns f rom sawmi l l s - t ermed woodchi ps - are al so i n demand f or

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var i ous wood product s - eg paper, chi pboard, l i nerboar d, et c. - and a
maj or t rade exi st s i n t hi s commodi t y f rom t he West Coast of Nort h
Ameri ca t o Japan.
I nci dent al l y, t he expressi ons har dwood and sof t wood rel at e
more t o t he t ype of t ree rat her t han st ri ct l y t o t he act ual hardness or
ot her wi se of t he wood. For exampl e, Bal sa wood whi ch i s t he sof t est
and l i ght est of al l woods i s t echni cal l y a hardwood . Conversel y,
Col umbi an pi ne whi ch i s a f avour i t e mat eri al f or t he part of a quay t hat
has t o t ake t he shock of a shi p comi ng al ongsi de i s act ual l y a
sof t wood . The f ut ure of t he hardwood t r ade i s not cl ear because t here
i s enormous pr essure f rom conser vat i oni st s t o reduce i t s use. Most
hardwoods t ake many decades t o grow t o mat uri t y so t hat much of such
t i mber bei ng expl oi t ed i s, t o al l i nt ent s and purposes, a non-renewabl e
resource and such t rees are a vi t al el ement i n reduci ng t he
greenhouse ef f ect .On t he ot her hand, sof t woods, whi ch are t he f i rs,
l arches and pi nes, t end t o l o f armed under st ri ct l y cont rol l ed
condi t i ons so t hat i n most produci ng areas t he t ot al amount i s bei ng
i ncreased rat her t han t he reverse.
Processed Materi al : Here t here i s a very wi de var i et y, rangi ng f rom
pl ywood t hrough t o newspri nt . Thi s l at t er product i s especi al l y val uabl e
and suscept i bl e t o mi shandl i ng damage and so much of t he t rade i s
conduct ed i n speci al l y desi gned vessel s engaged i n l ong -t erm
cont ract s. The mai n export i ng areas are Canada (bot h East and West)
and Fi nl and. Nat ural l y, wi nt er condi t i ons can cause di srupt i on,
part i cul arl y when i ce af f ect s t he St . Lawr ence Ri ver and t he Gul f of
Bot hni a. As a resul t , t hose vessel s engaged i n t hi s t rade need t o be
i ce-st rengt hened. Al t hough unaf f ect ed by t he i ce di f f i cul t y, West ern
Canadi an export i ng t ermi nal s are f requent l y beset by heavy r ai nf al l and
newspri nt has t o be kept dry at al l cost s.

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Li nerboard: A product i n heavy demand f or t he packagi ng and cart on
manuf act uri ng i ndust ri es - i s suppl i ed mai nl y f rom Nort h Ameri ca,
especi al l y t he US Gul f and t he West Coast , al so f rom Scandi navi a.
Ferti l i sers: There can be Li t t l e doubt of t he i mport ance of the vari ous
raw mat eri al s and f i ni shed product s covered under t hi s headi ng when
one real i ses t hat t went y. Fi ve years ago I ndi a, , wi t h i t s massi ve
popul at i on, was heavi l y rel i ant on t he out si de worl d f or suppl i es of
grai n. I t i s now qui t e rare t o see grai ns bei ng i mport ed i nt o t hat nat i on,
a ci rcumst ance brought about al most sol el y by t he use of f ert i l i sers.
Si mi l ar i mprovement s i n agri cul t ur e t hrough t he use of f ert i l i sers may
be f ound i n most devel opi ng count ri es.
The t hree mai n chemi cal s requi red f or pl ant growt h are ni t r ogen,
phosphat e and pot ash. Al l t hree occur nat ural l y, but ni t rogen, i s usual l y
manuf act ured t oday as a by- process of t he oi l and chemi cal i ndust ri es.
Chi l e i s t he mai n source of ni t rat es and t hi s nat ural commodi t y i s st i l l i n
demand because of i t s ot her const i t uent s, such as i odi ne. Sul phat e of
Ammoni a and Ammoni um Ni t rat e ar e exampl es of manuf act ured
ni t rat es, and a val uabl e agent i n t hei r product i on i s sul phuri c aci d, a
product whi ch al so f i nds a use i n a l arge number of ot her manuf act uri ng
processes. Al t hough t here ar e speci al i sed mol t en-sul phur carri ers and
t ankers capabl e of t ransport i ng sul phur i c aci d, by f ar t he maj ori t y of
sul phur i s moved i n dry- bul k st at e ari d convert ed i nt o sul phur i c aci d
on-si t e.
Sul phur i s obt ai ned nat ural l y i n many part s of t he wor l d part i cul arl y
f rom Si ci l y (Gel a) and f rom West ern France (Bayonne), whi l st t he US
Gul f was once a maj or export er. Now, however, much sul phur i s
obt ai ned as a by-pr oduct of t he oi l and gas i ndust r i es and f orms a maj or
expert f rom West ern Canada, f rom Pol and and Nort hern Germany, f rom
Li bya and Syr i a i n t he Medi t erranean, and f rom t he nat i ons of t he
Arabi an Gul f . Some i mport ers use i t t o up-grade t hei r own pr oduct s. For
exampl e, Morocco enhances t he qual i t y of i t s expl oi t at i on of vast

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nat ural phosphat e deposi t s by usi ng i mport ed sul phur t o manuf act ure
st ronger and more val uabl e di - ammoni um (DAP) and t ri pl e-super
phosphat e (TSP).
Phosphat e i s f ound al l around t he Af ri can coast al nat i ons f rom
Togo (Kpeme) i n West Af ri ca nort hwards vi a Senegal ( Dakar) and
Morocco (Casabl anca, Jorf Lasf ar, Saf i ), t o Tuni si a (Sf ax and Gabes),
whi ch l at t er nat i onal al so engaged i n t he manuf act ure and export of
Ammoni um Ni t rat e. Ot her prol i f i c export ers of phosphat e and i t s
deri vat i ves are Jordan (vi a Agaba) and Egypt (El Hamrawei n), cert ai n of
t he Paci f i c I sl ands (eg Chri st mas I sl and) and al so t he Sout h East ern
Uni t ed St at es (f rom t he port of Tampa) whi ch al so export s upgraded
mat eri al such as DAP and TSP. The USSR i s al so an export er vi a
Murmansk ( where i t may be cal l ed apat i t e) and overl and t hrough
Fi nl and ( where Russi an mono-ammoni um phosphat e ( MAP) may be
export ed vi a t he port of Kokkol a. Pot ash can be shi pped nat ural l y
(especi al l y f rom I srael , Jordan and f rom Canada), or as manuf act ured
pot assi um chl or i de.
I n addi t i on t o sources of nat ure f ert i l i sers, many nat i ons engage
i n t he prof i t abl e busi ness of manuf act uri ng f ert i l i ser compounds,
especi al l y urea, ammoni um phosphat e and ni t ro phosphat i c kompound
(NPK). Such cargoes wi l l f requent l y be f ound quot ed f rom ori gi ns i n t he
EEC. (eg ex Ant werp, Rot t erdam and Hamburg); f rom Pol and
(Gdyni a/ Gdansk), and f rom Rumani a ( Const anza), whi l st many of t he
oi l -produci ng nat i ons l ocat ed i n t he Medi t erranean, Ar abi an gul f , and
Sout h East Asi a, and t he USSR use t hei r f aci l i t i es t o manuf act ure
export abl e ur ea as a by- product f rom oi l ref i ni ng. Al l t hese f ert i l i sers,
whet her nat ural or manuf act ured, need care i n handl i ng, al t hough most
can be carr i ed i n saf et y whet her bagged or i n bul k, gi vi ng ri se t o t he o
t -encount ered expressi on BHF bul k harml ess f ert i l i zers.
Part of t he reassurance of t he word harml ess dat es back t o t he
earl y days of t ransport i ng ammoni um ni t rat e i n bul k bef ore such

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processes as cal ci ni ng t hi s mat eri al had been perf ect ed. Wi t hout t hi s
t reat ment , a l arge quant i t y of ammoni um ni t rat e i n bul k can, under
cert ai n condi t i ons, become spont aneousl y expl osi ve whi ch was
t ragi cal l y proved when a US Gul f port was al most dest royed many years
ago. Thi s probl em i s now so wel l underst ood t hat ver y many f ert i l i sers
are compl et el y har ml ess f rom t he dangerous cargo poi nt of vi ew.
However, t he I MDG code shoul d al ways be ref erred t o especi al l y i f
more t han one t ype i s t o be l oaded because some ot her wi se harml ess
f ert i l i sers are i ncompat i bl e one wi t h anot her. Of course, shi p owners
need t o be awar e of t he non-dangerous harm t hat cert ai n f er t i l i sers can
do. Some can have a damagi ng ef f ect on t he pai nt work i n t he hol ds
whi l st ot hers can cause severe corrosi on t o unprot ect ed st eel .
Steel s: Under t hi s headi ng i s a consi derabl e var i et y of cargoes, rangi ng
f rom mat eri al such as bars, rods and beams, t hrough t o pl at e, coi l s and
pi pes. As may seem obvi ous, st eel product s emanat e mai nl y f rom t he
maj or i ndust ri al i sed nat i ons bot h f or cross-t radi ng t o ot hers and f or t he
devel opi ng nat i ons. However, t here i s a maj or t rade around semi -
processed mat er i al s such as pi g-i ron concent rat es, di rect -reduced i ron,
et c. wherei n devel opi ng nat i ons (eg Br azi l , Chi l e and Peru) have a rol e
t o pl ay. Fr om t he ot her end of manuf act uri ng processes come scrap
met al s whi ch al so f orm an i mport ant seaborne commodi t y, t he scrap
bei ng recycl ed i n t he st eel i ndust ry and f orm rel at i vel y i nexpensi ve
ready mat eri al around whi ch some st eel i ndust ri es have been
devel oped. The t rade t oday i s concent rat ed ver y much upon t he rout e
bet ween t he Uni t ed St at es East and West coast s t o Japan, Korea and
Tai wan ( where modern el ect ri c f urnaces used f or st eel -maki ng may
have a 100% scrap, f eed i nst ead of ore). There are, however, many
ot her rout es, wi t h shi ps of al l si zes f rom short -sea/ coast al up t o handy-
si zed coop-sea bul kcarri ers.
Mi neral s: Ot her t han i ron-or e and nat ural f ert i l i sers, t her e are ver y
many ot her mi neral s carri ed at sea, some f ormi ng an i mport ant vol ume
t rade. One such i s bauxi t e, t he st apl e const i t uent of t he al umi ni um

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i ndust r y, t he raw mat eri al s bei ng expor t ed i n l arge quant i t i es f rom
West Af ri ca (Gui nea) and f rom Brazi l i n part i cul ar, t o vari ous al umi ni um
smel t ers wor l dwi de eg i n Canada, Venezuel a and t he UK/ Ei re.
Ref erence t o Chapt er El even of CARGOES l i st s many seaborne
mi neral s, and, f rom t hose pages, one can gai n an i dea of export i ng and
i mport i ng regi ons where t hi s i s appropr i at e.
Shi ps for Cargoes: Dr y-cargo vessel s can be di vi ded i nt o vari ous si ze
and t ype cat egori es, of whi ch t hose of maj or i mport ance are: -
Cape-si ze: These1 vessel s (of around 100, 000/ 200, 000 t onnes dwt )
are, of course, l i mi t ed ver y much by port rest ri ct i ons and t hey
concent rat e on cargoes of i ron-ore or coal on l ong-haul runs, operat i ng
pri nci pal l y f rom l oadi ng areas i n Aust r al i a, Sout h Af ri ca, Brazi l , West
Af ri ca and t he Uni t ed St at es and Canada, di s chargi ng mai nl y i n t he Far
East and Europe. Not al l vessel s operat i ng i n t hi s si ze cat egory are pur e
dry-cargo vessel s; many combi nat i on carri ers - pr i nci pal l y VLOOs
(Ver y Large Ore-Oi l ers) t ransf erri ng i nt o t he oi l t rades when t he
opport uni t y ar i ses or out of t he oi l t rade when f rei ght l evel s are
uni nvi t i ng.
Panamax : These shi ps of around 55, 000/ 70, 000 dwt are arguabl y t he
new workhorses of t he dr y cargo t rades and many port f aci l i t i es have
been upgraded i n recent years t o accommodat e shi ps of t hese
di mensi ons. Thi s process i s cont i nui ng (eg I raq s deepeni ng of t he
channel s t o and f rom he port s of Khor Al Zubai r and Umm Qasr t o
around 12 met res) and as i t devel ops, so t he range of commodi t i es
t hese vessel s regul arl y engage i n carr yi ng can wi den st i l l f ur t her. Most
Panamaxes are pur e bul kcarri ers, al t hough t hey have t o compet e wi t h
OBOs i n t he At l ant i c when economi c ci rcumst ances di ct at e, and t he
avai l abi l i t y or ot her wi se of t hese i nvaders f rom t he oi l i ndust r y can
have a pr of ound ef f ect upon t he st at e of the dr y -cargo market.

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The mai n t rades f or Panamaxes an t he bi g t hree o bul k coal ,
i ron or e and grai n - al t hough one f i nds Panamaxes car ryi ng ot her
commodi t i es, not abl y bul k phosphat e, t api oca f rom Thai l and (al ong wi t h
cape si ze vessel s), and bauxi t e. Thus t hese vessel s wi l l be f ound
worl dwi de, al t hough t hei r market di vi des i nt o var i ous regi ons :
a) The At l ant i c Basi n
b) The Paci f i c/ I ndi an Ocean Basi n
c) From At l ant i c t o Paci f i c/ I ndi an
d) From Paci f i c/ I ndi an t o At l ant i c
Of t hese i t i s usual t o f i nd t he hi ghest ret urns bei ng pai d f or
cargoes f rom t he At l ant i c t o t he Paci f i c/ I ndi an Oceans wi t h t he l owest i n
t he reverse di rect i on, t hi s i mbal ance creat ed by normal l y hi gher f rei ght
l evel s f or t rans-At l ant i c t rades over t ranspaci f i c t rades. A maj or t rade
rout e compri ses t hat of grai n f rom t he US- Gul f t o Japan and t hi s rat e i s
a maj or cont ri but or t o t he f rei ght f ut ures market operat ed by BI FFEX
(The Bal t i c I nt ernat i onal Frei ght Fut ures Exchange) and a ready
baromet er of t he heal t h of t he dr y-cargo market . I n r ecent years f rei ght
rat es have f l uct uat ed f rom as l ow as US $10. 00 up t o US $30. 00 per t on
f or t hi s part i cul ar t rade and t hi s al one serves as a ready i ndi cat or of t he
vol at i l i t y of t he dry-cargo f rei ght market , and f or Panamax rat es i n
part i cul ar.
Handy-Si ze: These are real l y t wo cat egori es of handy-si zed
bul kcarri ers - t hose around 20/ 30, 000 dwt and t hose bet ween,
30/ 55, 000 dwt . The l arger cat egory emul at es t he t radi ng pat t ern of
Panamax bul kers, but adds t o i t s l i st of carri ageabl e commodi t i es t he
maj or t rade of st eel s and scr ap, and f orest product s. As a r esul t , many
of t hese vessel s are rel at i vel y sophi st i cat ed, wi t h a var i et y of deck gear

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of up t o around 25 t onne cranes, et c. The smal l er vessel s have an
even wi der range of commodi t i es and are i n especi al demand f or
regi ons of t he wor l d wi t h rest ri ct ed di mensi ons - eg t he Gr eat Lakes.
There i s no regul ar pat t ern f or t hese smal l er bul k carri ers as can be
i dent i f i ed f or t hei r l arger compet i t ors, and t hey t end t o be f ound i n al l
part s of t he wor l d engaged i n t he carri age of any number of
commodi t i es. Around handy-si zed bul k carri ers what i s t ermed
parcel i ng has devel oped, and f requent l y operat ors wi l l hi r e shi ps of
t hi s t ype and si ze t o l oad vari ous commodi t i es i n adj acent hol ds f rom a
var i et y of nearby port s t o anot her, general dest i nat i on - eg Aust ral i an
mi neral s t o Europe.
Tweendeckers: Most modern deepsea t weendeckers range i n si ze
around 20, 000 deadwei ght , al t hough t here are st i l l ver y many vessel s i n
t hi s market of around 12/ 18, 000 t onnes dwt . Thi s l at t er f l eet i s
general l y agei ng, however, and t hei r modern count er part s are
f requent l y bet t er descri bed as mul t i - pur pose havi ng t he abi l i t y t o f ol d
t weendecks t o convert t o and compet e wi t h smal l er bul kcarri ers. The
modern versi ons of t hi s cat egor y are i n demand f or l i ner t r af f i c f rom1
t he Far East and f or t he more sophi st i cat ed t rades ex Europe, whi l st t he
ol der versi ons are t he t rue t ramps of t oday s dr y-car go market ,
scour i ng t he worl d s oceans f or what ever prof i t abl e cargo i s around -
f requent l y engaged i n t he carri age of bagged f ert i l i zers, grai ns and
agri cul t ural product s and occasi onal bul k commodi t i es - eg sugar.
However, j ust as t weendeckers compet e f or t he cargoes t hat
mi ght ot her wi se be t he excl usi ve domai n of smal l er bul kcarri ers, so
t hose bul kcarri ers can be used f or what were once consi dered excl usi ve
t weendeck l i ner t rades, as more and more of t he l i ner t rades t hat
remai n af t er t he depri vat i ons associ at ed wi t h cont ai ner i sat i on devel op
more of parcel i ng at t i t ude t o t he ser vi ces t hey advert i se, f or whi ch
bul kcarri ers are perf ect l y sui t abl e.

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Short Sea : Ent erpr i si ng modern short sea owners are not necessar i l y
rest ri ct i ng t hemsel ves t o coast al t rades, and i t i s not uncommon t o f i nd
smal l vessel s of l ess t han 10, 000 t onnes t radi ng f ar a f i el d f rom t hei r
normal oper at i ng area. I n f act t hey provi de a val uabl e al t er nat i ve
shi pment means t o parcel i ng f or t hose shi ppers and t rader s seeki ng a
more personal i nvol vement i n t he carri age of t hei r commodi t i es. Thi s
process has been ai ded by a general move t o shi p smal l er commodi t y
parcel s and by t he removal of cr ewi ng rest ri ct i ons by var i ous
government s. There i s no r eason why i t shoul d not become more
common i n t he year s ahead f or smal l er vessel s t o be f ound around t he
worl d i n a purel y t ramp capaci t y, havi ng been ent i ced away f orm t hei r
normal wat ers by an at t ract i ve f rei ght .
Revi si on Exerci seSt udent s shoul d now ret urn t o t he Appendi ces at t he
end of Lesson Three and by usi ng t he i nf ormat i on i n t hi s l esson, re -
read t he report ed f i xt ures, pl aci ng t hem where possi bl e i n t he cont ext of
i dent i f i abl e t rades.

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Tradi ng Restri cti onsQui t e apart f rom t he commerci al aspect s of
marryi ng shi p and cargo, t hose engaged i n t he dr y- cargo chart eri ng
market must bear i n mi nd cert ai n ot her f act ors whi ch af f ect t rade,
namel y : -
a) Navi gat i onal
b) Pol i t i cal
c) Labour
d) Port s
Navi gati onal Restri cti on : Obvi ousl y, cl i mat i c i nf l uences af f ect t rade
and a cl ear exampl e i s t hat i ce wi l l i nt errupt voyages at cert ai n t i mes
and seasons of t he year. Thi s seabor ne t radi ng t o and f rom t he Great
Lakes of Nort h Ameri ca i s not possi bl e bet ween Januar y and March.
Tradi ng t o t he Nort hern Bal t i c i s at t he ver y l east di f f i cul t duri ng t hat
peri od and voyages t o and f rom t he Hudson Bay are possi bl e onl y
bet ween Jul y and Oct ober each year. There are many ot her hazards t o
be borne i n mi nd, however, eg Monsoons i n cert ai n areas at cert ai n
t i mes ; Hurri canes or Typhoons at ot hers.
Cl ose at t ent i on must al so be pai d t o t he rout e bet ween l oadi ng
and di schargi ng port (s). Does i t ent ai l t he crossi ng of l oad- l i ne zones?
Wi l l t hese af f ect cargo i nt ake? Does i t ent ai l expensi ve pi l ot age? Or
passi ng, round an obst acl e such as t he Magel l an St rai t s or Cape Form,
or navi gat i ng vi a a Canal ? Has t he cost and r i sk of t hi s el ement i n t he
voyage been cal cul at ed?

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Maj or canal s and wat er way af f ect i ng dry-cargo t rades are :
Suez Canal
Panama Canal
St Lawrence Seaway/ Great Lakes Syst em
Magel l an St rai t s/ Cape Horn
Cape of Good Hope
Mal acca/ Lombok/ Sunda St rai t s
St rai t s of Hormuz
Red Sea/ Gul f of Aqaba-Ei l at
Torres St rai t s/ Great Barri er Reef
Ki el Canal / Skaw
Pent l and Fi rt h
Dover St rai t s/ Engl i sh Channel
St rai t s of Gi bral t ar
Dardanel i es/ Bosphoro i s
Consul t your mari t i me at l as t o f ami l i ar i ze yoursel f wi t h t he l ocat i on of
t hese pl aces.
At t he same t i me, t o l ocat e t he f ol l owi ng l andmarks used i n dry-cargo
t radi ng - part i cul arl y as del i ver y/ redel i ver y posi t i ons i n t i me chart ers: -
Cape Passero (Si ci l y)
Cape Fi ni st erre (N. W. Spai n)
Ushant (France)
Dakar/ Doual a (West Af ri ca)
Bat on Rouge (Ri ver Mi ssi ssi ppi )
Rosar i o, Sant a Fe (Argent i ne)
Muscat (Arabi an Sea/ Persi an Gul f )

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Dondr a Head (Sr i Lanka)
Ref erence t o t he Port I nf ormat i on books wi l l provi de det ai l s of
canal and wat er way si ze rest ri ct i ons al so t he equi pment t hat needs t o
be f i t t ed on a vessel bef ore t ransi t . Cert ai nl y vessel s t i mech art ered f or
ei t her t ri p or per i od chart ers i nvol vi ng any of t hese canal s or wat er ways
shoul d i ncl ude cl auses i n whi ch t he shi p owners/ operat ors conf i rm t hat
t he vessel s reasonabl y conf orm t o l ocal r equi rement s and have
appropr i at e f i t t i ngs. I n t he case of t he Panama and Suez Canal , i ncl ude
t he Canal Gross and Net t Regi st ered Tonnages whi ch di f f er f rom t he
usual NRT and CRT and upon whi ch t ransi t t ol l s are based.
Pol i ti cal Restri cti ons: Most shi ppi ng peopl e t end t o have an
i nt ernat i onal and a commerci al vi ew of t he worl d and i t s event s
rat her t han a pol i t i cal one. Nevert hel ess, t he port s of cert ai n nat i ons
are not popul ar cal l i ng pl aces, because of f ut ure repercussi ons
af f ect i ng vessel s and t hei r owners/ operat ors as a resul t of t radi ng
t here. I t i s, t heref ore, common pract i ce t o l i st cert ai n pol i t i cal
excl usi ons i n t i mechart er part i es and t hose engaged i n voyage t radi ng
shoul d al so be especi al l y caref ul i n f i xi ng cargoes t o or f rom t hose
nat i ons. Exampl e ar e : -
I srael : Because of l i kel y bl ack-l i st i ng by Ar ab nat i ons f or f ut ure t radi ng.
As a resul t i t i s common pract i ce f or t i me chart erer s and f or t hose
engaged i n voyage busi ness i nvol vi ng Ar ab nat i ons, t o negot i at e and t o
i nsert i n chart erpart i es an Arab boycot t cl ause, under whi ch t he shi p
owner conf i rms t hat hi s vessel i s not boycot t ed ( bl ackl i st ed) by Ar ab
nat i ons as a resul t of previ ous vi si t s t o I srael .
Li bya: Under Li byan l aw, al l document s appert ai ni ng t o shi ps and or
cargoes must be t ransl at ed i nt o Arabi c. Thus t radi ng wi t h Li bya i nvol ves
heavy ext ra cost s f or t ransl at i ons. Addi t i onal l y, Li byan cust oms are
l i kel y t o search vessel s f or any si gn of goods or equi pment i nvol vi ng
nat i ons (eg I srael ) of whi ch t hey di sapprove and, i f such are
di scovered, i mpose heavy f i nes agai nst t he vessel . Consequent l y, Li bya

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i s ri ot a popul ar cal l i ng pl ace. ( A si ngl e cart on of I srael i f rui t j ui ce i n t he
gal l ey has been known t o cause t roubl e) .
South Afri ca: Several nat i ons (eg I ndi an and Bangl adesh) ref use t o
t rade t o Sout h Af ri ca because of i t s apart hei d l egi sl at i on. Thi s af f ect s
not onl y vessel s i nvol ved i n some way wi t h shi p owners or chart erers of
t hose nat i ons, but al so precl udes t radi ng bet ween t hose st at es and
Sout h Af ri ca. Consequent l y, t here i s an of f i ci al embargo i n pl ace
agai nst cargoes f rom t hose nat i ons endi ng up i n Sout h Af ri ca and vi ce-
ver sa, even i f carri ed i n shi ps f l yi ng t he f l ags of nat i ons not t aki ng part
i n t he boycot t of Sout h Af ri ca.
Cyprus ports under Turki sh control : Greek f l ag shi ps have been
prohi bi t ed by t hei r Gover nment f rom t radi ng t o t hose port s si nce t he
Turki sh i nvasi on of Cyprus some years ago. Si mi l arl y, t he Greek
Gover nment i s not wi l l i ng t o permi t vessel s t o cal l at Greek port s af t er
t radi ng t o Turki sh-cont rol l ed Cyprus. As a di rect consequence, Greek -
f l ag shi ps are not al ways wel come t o t rade t o Turkey i t sel f and,
al t hough l i t t l e of f i ci al rul i ng i s decl ar ed over t hi s by t he Turki sh
Gover nment , i t wi l l be f ound t hat some Turki sh-bound cargoes are not
f i xabl e i n Greek t onnage.
Cuba: The USA has rel axed i t s ban on vessel s t radi ng t o Cuba,
al t hough Cuba i s st i l l ment i oned i n some chart er part i es as an excl usi on
f or vessel s t hat have t raded t o Cuba si nce 1962. . . . . The rest ri ct i on i s
gradual l y bei ng l i f t ed si nce i t i s a rel i c of a bygone age, but can st i l l
cause occasi onal pr obl ems.
North Korea: The comment s t hat , appl y t o Cuba appl y equal l y t o Nort h
Korea, al t hough wi t h t he recent l y est abl i shed di al ogue bet ween t he t wo
Koreas, one agai n hopes t hat t hi s rest ri ct i on wi l l soon be conf i ned t o
hi st or y.

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Vi etnam: A rel i c of the Vi et namese War, gradual l y Vi et nam i s becomi ng
i nt ernat i onal l y rehabi l i t at ed and hopef ul l y anot her t radi ng rest ri ct i on wi l l
be consi gned t o t he di pl omat i c wast epaper bi n.
I raq & Kuwai t : Whi l st prepari ng t hi s Lesson, t he cr i si s i n t he Arabi an
gul f i s i n f ul l f l ow. Hopef ul l y i t wi l l be set t l ed peaceabl y and t he present
embargo on goods t o and f rom I raq and occupi ed Kuwai t wi l l be
removed. I n t he meant i me, an appropri at e cl ause mi ght be needed i n a
chart er part y. There are ot her port s where l ocal pr obl ems occur of a
pol i t i cal nat ure. I n cert ai n cases i t may not be wi se t o have on board
crew members of part i cul ar nat i onal i t i es. Even t he nat i onal i t y of t he
event ual owners of a vessel may, creat e probl ems despi t e t he act ual
f l ag t he vessel f l i es bei ng accept abl e. For exampl e, Li ber i an f l ag shi ps
and vessel s owned by Li ber i an cor porat i ons are not wel come i n Syr i a.
Many Greek-f l ag shi ps (t hat are wel come) are i n f act owned by Li ber i an
corporat i ons, whi ch precl udes t hem f rom t radi ng wi t h Syr i a.
I t i s vi t al t hat t hose engaged i n i nt ernat i onal t radi ng keep abreast
of t he news and especi al l y i nt ernat i onal news. There i s l i t t l e t hat one
reads about i n dai l y newspapers t hat wi l l not have at l east an i ndi rect
ef f ect , of i nt ernat i onal shi ppi ng. Thi s i s especi al l y so i n pol i t i cal and i n
economi c mat t ers. Al so t r y t o avoi d bei ng i nadvert ent l y i mpol i t e. I f a
nat i on renames a port , f or exampl e, i t woul d be good manners t o
address communi cat i ons t o t he new name. Hence Sai gon i s now
Known as Ho Chi Mi nh Ci t y. Pol i sh peopl e pref er Swi nouj sci e t o be
so named rat her t han t he Germani c Swi nemunde. Hamburg and
Rost ock are now part of Germany not West Germany or East
Germany. I rani an peopl e pref er t he Gul f t o be cal l ed t he Persi an gul f
rat her t han t he Arabi an Gul f , whi l st ci t i zens of Bahrei n woul d pref er
t he l at t er.
Labour restri cti ons : Al so cont ai ned i n t he t radi ng excl usi ons cl ause
wi l l be nat i ons ent er ed because of l abour rat her t han pol i t i cal rest ri ct i ve
f act ors. Promi nent among t hese, ar e Aust ral i a and New Zeal and

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(usual l y col l ect i vel y t ermed as Aust ral asi a) and Scandi navi a. (Be
caref ul wi t h t hi s l at t er expressi on as some peopl e consi der t hat t he
t erm Scandi navi a i ncl udes Fi nl and and ot her s (especi al l y Fi nns) do
not . The reason f or t hese excl usi ons i s t hat t he nat i ons i nvol ved i n t hese
t wo areas ( i ncl udi ng Fi nl and) are st r onghol ds of t he I nt ernat i onal
Transport Workers Federat i on - known as t he I TF. Thi s i s an
i nt ernat i onal organi sat i on set up t o assi st seamen t o mai nt ai n wages
and condi t i ons at cert ai n l evel s. The I TF demands t hat shi p owner s
i nt ernat i onal l y shoul d compl y wi t h t hese rest ri ct i ons but , i n general , t he
I TF i s concer ned mai nl y wi t h vessel s f l yi ng so-cal l ed f l ags of
conveni ence (eg Panamani an or Li ber i an), as t hey al l ege t hat t he
condi t i ons of t he cr ews aboard such vessel s i s f requent l y bel ow t hose
st andards set by t he I TF.
I n t hose nat i ons l i st ed above, t he I TF (support ed) by l ocal uni ons)
may have t he power t o hol d vessel s unt i l t he wages and condi t i ons are
brought up t o t hei r requi rement s, i ncl udi ng back -pay t o whi ch t he crew
may become ent i t l ed. Thus, f or vessel s f l yi ng f l ags of conveni ence,
Aust ral asi a, Scandi navi a and Fi nl and are usual l y excl uded. Anot her
st ri ngent uni on requi rement i n Aust ral asi a and Fi nl and, and i n cert ai n
part s of Scandi navi a, i s t hat dr y-cargo vessel s must be f i t t ed wi t h hol d-
l adders conf ormi ng t o a cert ai n st yl e and di mensi ons, as def i ned by t he
Wat ersi de Workers Federat i on. These r equi re t hat , f or ever y si x met re
drop i n t he l adder, a rest i ng pl at f orm must be const ruct ed. I t i s not
al ways necessar y provi di ng, t hat cargo compart ment s are compl et el y
cl ean and when l oadi ng bul k cargoes t hat can be poured i nt o t hose
compart ment s, f or vessel s t o have t hose l adders of t hat desi gn.
However, i f t here i s any probl em wi t h cargo hol ds and t he
workers are requi red t o descend i nt o t he compart ment s, t hey wi l l do so
onl y i f t he l adders conf orm t o t he est abl i shed desi gn. Aust ral asi an
Wat ersi de Uni ons ar e ver y st rong and di ct at ori al . For shi ps di schargi ng
i n Aust ral i a, f or exampl e, and t hen rel oadi ng, i t i s al most cert ai n t hat
t he uni ons i s wi l l i nsi st on cl eani ng hol ds af t er di scharge and prepar i ng

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t hem f or t he next cargo - at a consi derabl e cost - f ar more t han woul d
normal l y be pai d t o t he shi p s crew. Not onl y t hat , but t he vessel wi l l be
del ayed i n port whi l st t he work i s carri ed out . Thi s can be anot her
reason why Aust ral asi a i s f requent l y an excl uded area f or shi ps, no
mat t er what f l ag t hey f l y.

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Port Restri cti ons : Once agai n ref erence t o Port I nf ormat i on books i s
essent i al t o gauge j ust what i s i nvol ved i n a prospect i ve voyage. Many
port s have hi dden rest ri ct i ons t hat one onl y di scovers by appropr i at e
ref erence. Doual a ( Cameroon) f or exampl e, i s what i s t ermed a neap
port , where t i dal l evel s change dr amat i cal l y over ever y week or so,
meani ng t hat at cert ai n t i mes a vessel may be pr event ed f rom bert hi ng
f or some days due t o i nsuf f i ci ent wat er. Saf i (Morocco) has a harbour
bar whi ch, at t i mes when At l ant i c Ocean rol l er waves are predomi nant ,
means ext reme di f f i cul t y f or shi ps of cert ai n dr af t s i n ent er i ng t he port .
Part i cul ar bert hs i n Genoa (I t al y) have an ai r -draf t rest ri ct i on not a
physi cal rest r i cat i on, but one nonet hel ess ri gorousl y i mposed by t he
port aut hor i t i es because of t he danger t o ai rcraf t overf l yi ng t he port
area t o and f rom Genoa ai rport . Many port s on t he west coast of Sout h
Ameri ca are badl y af f ect ed f rom t i me t o t i me by st eep waves causi ng
rangi ng damage t o shi p and/ or bert h. I n But t er wort h ( Mal aysi a) bert hi ng
pri or i t y i s gi ven t o gas t ankers, so much so t hat a part l y di scharged or
l oaded vessel may have t o l eave t he bert h t o t he gas t anker, ret urni ng
onl y af t er t he t anker has compl et ed i t s cargo operat i ons.
Port rest ri ct i ons are not necessar i l y onl y di mensi onal . The hours
t hat shi ps are worked by port l abour, hol i days, et c. al l need
consi derat i on. BI MCO (The Bal t i c and I nt ernat i onal Mari t i me Counci l )
publ i sh an annual Hol i day Cal endar l i st i ng wor l dwi de nat i onal and
l ocal hol i days and port worki ng hours a val uabl e t ool i n any shi ppi ng
of f i ce. Port cost s al so var y wi del y. The charges i n some port s are
subsi di sed i n or der t o at t ract busi ness, whi l st ot hers have t o be sel f -
support i ng and prof i t abl e. The cost s vary enormousl y, of t en not onl y
bet ween adj acent count ri es, but bet ween port s i n t he same count r y.


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Let us t ake as an exampl e a Panamax bul kcarri er t hat mi ght t rade
t o var i ous European count ri es and t he approxi mat e port charges t hat
mi ght be i mposed assumi ng, or course, t hat exact l y t he same shi p, f l ag
and crew i s i nvol ved : -
US $
Rot t erdam 60, 000
Hamburg 65, 000
Bordeaux 80, 000
Hel si nki 170, 000
Li verpool 160, 000
Sout hampt on 160, 000
Port Tal bot 65, 000
Li sbon 15, 000
Genoa 35, 000

As t he reader can see, qui t e a di spar i t y. The secret , of course, of
avoi di ng unpl easant surpri ses i s t o check bef ore f i xi ng. One means i s
f rom ref erence books, such as produced by BI MCO and ot hers.
Al t ernat i vel y, and t he means f avoured by many i n t he i ndust ry, vi a a
l ocal port agent . Apart f rom port cost s, anot her charge t hat mi ght be
encount ered i s t hat of f rei ght t axes. These can be ext remel y hi g h -
Syri a i mposes somet hi ng l i ke 13% of f rei ght , Turkey not f ar behi nd at
over 10%. These ar e i mposed on t he r eci pi ent of t he f rei ght - not t he
organi sat i on payi ng, al t hough i t may be deduct ed at source by l ocal
l aw. To compl i cat e mat t ers, t here are bi l at eral agreement s bet ween
nat i ons over t he i mposi t i on of f rei ght t axes, so t hat not al l shi p
owner s/ operat ors ar e requi red t o pay, or need t o pay onl y a part of t he
t ot al cost t o t he shi ps of non-approved nat i ons.

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Most f rei ght t axes are i mposed agai nst t he vessel s f l ag, but
some agai nst t he nat i on of t he reci pi ent of t he f rei ght - i e perhaps a
di sponent owner i n t he case of a t i me-chart ered vessel . As f or port
cost s, f orewarned i s f orearmed and al l owance f or t hi s deduct i on can be
i ncl uded i n t he cost i ng of t he exerci se when consi der i ng t he busi ness.
BI MCO agai n publ i sh a usef ul ai d an annual bock on worl dwi de f rei ght
t axes an exempt i on t heref rom. Ot herwi se i t i s anot her message t o t he
l ocal port agent .
Sel f Assessment Questi ons
1. Usi ng your at l as, l ocat e :
i ) Cape Passero, i i ) Skaw, i i i ) Torres St rai t s
i v) Dar danel l es
2. The f ol l owi ng port s al l have cert ai n rest ri ct i ons whi ch shoul d be
t aken i nt o account when cont empl at i ng f i xi ng vessel s t o t hem. What are
t hey : -
Buenavent ura
Tol edo
Cal cut t a
Bangkok
Churchi l l
3. What i s t he maxi mum draf t i n t he St . Lawr ence Seaway?
4. What is the new Chinese name for the Port of Whampoa?

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Ti me Ti me i s vi t al t o t he work of a dr y-cargo shi pbroker, whet her
worki ng under t i me- const rai nt s when negot i at i ng chart ers; mai nt ai ni ng
cont act wi t h, f or exampl e, pri nci pal s, brokers or shi p s mast ers;
cal cul at i ng t i mechar t er durat i on; or est abl i shi ng est i mat ed dat es of
arri val of shi ps. However, i t i s i mport ant t o underst and how t i me i s
cal cul at ed.
On a gl obal basi s, Ti me can be sai d t o st art at t he Greenwi ch
Mer i di an, whi ch passes cl ose t o cent ral London and whi ch i s t aken t o
be zero degrees or 0. From t hi s st ar t i ng poi nt , i magi nary l i nes of
l ongi t ude are drawn, west wards and east wards, f or 180 each maki ng a
t ot al of 360 f or a compl et e ci rcumf erence of t he gl obe. Thus, i f t hree
hundred and si xt y meri di ans (or l i nes of l ongi t ude) ar e drawn f rom pol e
t o pol e at equal i nt erval s, t hey wi l l be 1 of l ongi t ude apar t . St art i ng
f rom t he Greenwi ch Mer i di an and t ravel i ng east wards (t owards I ndi a),
t i me advances one hour f or ever y 15 of l ongi t ude. Thus, a compl et e
ci rcl e of t he Eart h comi ng back t o t he st art i ng poi nt of t he Greenwi ch
by 24 hours, or by one day. West wards f rom Greenwi ch (t owards t he
Uni t ed St at es) wi l l have t he r everse ef f ect . One hour wi l l be l ost f or
ever y 15 and upon ret urni ng t o t he Greenwi ch Meri di an, one day wi l l
have been l ost .
Where t hose t raci ng east wards and west wards passages meet
hal f way round i t t he 180 meri di an ( i n t he cent ral Paci f i c Ocean) i s
l ocat ed t he i magi nar y I nt ernat i onal Dat e Li ne (or I DL) f or short , whi ch
i s not compl et el y st rai ght , t aki ng mi nor devi at i ons so as not t o bi sect
smal l i sl ands or af f ect l and masses. Thus, by t ravel i ng east wards cross
t he east ern hemi sphere f rom t he Greenwi ch Meri di an, l ocal t i me
advances hour by hour unt i l 180 East or t he I DL i s reached, at whi ch
st age one i s 12 hours ahead of Greenwi ch Mean Ti me (GMT f or
short ). Movi ng i n t he opposi t e di rect i on f rom t he Greenwi ch Meri di an
across t he west ern hemi sphere, one l oses 12 hours i n reachi ng 180
west .

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Consequent l y, t he dat e i s one day earl i er t o t he east of t he I DL
t han t o t he West and t hi s, of course, af f ect s vessel s t radi ng t rans -
Paci f i c. A shi p proceedi ng east wards f rom Japan t owards t he Nort h
Ameri can Cont i nent wi l l t heref ore gai n one day upon crossi ng t he I DL.
Shi ps t ransmi t t i ng i n t he opposi t e di rect i on wi l l l oss one day. I t i s
i mport ant t o t ake t hi s i nt o consi derat i on when cal cul at i ng est i mat ed
dat es or arri val and cancel i ng dat es i nvol vi ng voages across t he Paci f i c
Ocean. But wherever shi ps are i n t he wor l d, i f t ravel i ng general l y
east war ds or west wards, smal l t i me di f f erences are el i mi nat ed by
adj ust i ng cl ocks and wat ches by one hour, ei t her f orwards or,
backwards, when passi ng f rom one t i me zone t o anot her, t hese t i me
zones bei ng i dent i f i ed i n t he wor l d map of any good at l as.
Most mer i di ans are st rai ght , but some, l i ke t he I DL are bent
here and t her e so as t o make al l one count r y (or st at e i n t he USA) i n
t he same zone. So exact l y how i s dr y- cargo chart eri ng af f ect ed by
t i me?Per haps most i mport ant l y dur i ng chart er i ng negot i at i ons.
I gnori ng dayl i ght savi ng schemes (such as t he UK s summer t i me,
when t i me i s advanced by one hour f rom GMT) when i t i s 1200 hours i n
London i t i s 0700 hours i n New York and 2100 hours i n Tokyo. Thus, i n
any of t hese cent res a dr y-cargo execut i ve i s i n t he mi ddl e of t he
worki ng day when one of hi s count erpar t s i s bet ween br eakf ast and t he
of f i ce and anot her i s t hi nki ng of goi ng t o bed.
There i s t hus l i t t l e poi nt i n maki ng f i rm of f ers wi t h repl y t i mes
where t here i s l i t t l e chance of pri nci pal s bei ng cont act abl e. Cases of
emergency are anot her mat t er and al l shi ppi ng peopl e t end t o be
prepared t o sacr i f i ce sl eep and conveni ence at one t i me or anot her. I t i s,
of course, vi t al t o st at e i n f i rm of f ers not onl y what t he of f er expi r y t i me
i s, but i n whose t i me i t i s t o be expressed. Repl y 1200 hour s coul d be
mi si nt erpret ed. Repl y 1200 hours London t i me i s cl ear. More easi l y
overl ooked can be t he t i me f act or af f ecti ng t i me chart er del i ver i es and
redel i veri es. Let us assume t hat a vessel del i vers on t i mechart er i n
London f or a t ri p t o Bombay, where she wi l l redel i ver. Let us al so

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assume t hat t he voyage wi l l t ake exact l y 30 days (720 hour s) and t he
dai l y hi re rat e of t he vessel i s US $ 9, 000
I f t he t i me chart er part y st i pul at es t hat del i ver y and redel i very are
t o be cal cul at ed i n l ocal t i me, t he ef f ect woul d be t hat t he vessel wi l l
remai n on hi re f or some f i ve hours i n excess of t he act ual t i me t aken
(see t he chart bel ow) - and t hi s can be of benef i t t o a vessel s owners,
who wi l l undoubt edl y cl ai m ext ra hi re of US $1, 875 f or t hose f i ve hours.
On t he ot her hand, a vessel proceedi ng on t he same t erms i n t he
reverse di rect i on wi l l l ose f i ve hours of hi re an advant age, t heref ore,
t o her t i me chart erer s. Those i nt erest ed i n equi t y wi l l doubt l ess ask why
a t i mechart erer shoul d pay more hi re t han f or t he peri od a shi p act ual l y
spends on t i mechart er, or as shi power recei ve l ess t han t he t i me a shi p
i s hi red out . I n t hi s t hey woul d echo curr ent Engl i sh Law on t he subj ect ,
whi ch has est abl i shed t he pr i nci pl e of el apsed t i me per haps more
easi l y underst ood by most of us as st op-wat ch t i me.
To underst and el apsed t i me, one has t o assume t hat a st op- wat ch
i s st art ed t he moment a shi p del i vers and t i me runs cont i nuousl y (l ess
any of f -hi re per i ods) unt i l i t i s hal t ed upon redel i ver y. The t i me t hat has
accumul at ed i s t he el apsed t i me and i s t he l egal per i od on hi re, unl ess
t he part i es have speci f i cal l y agreed i n t hei r cont ract t o be bound by
l ocal t i mes f or del i very and/ or redel i ver y. Anot her way of achi evi ng a
t i mechart er peri od based on el apsed or st op- wat ch t i me i s t o appl y a
st andard t o del i ver y and redel i ver y, such as GMT. The ef f ect of t hi s
approach as an al t ernat i ve t o l ocal t i me i s i l l ust rat ed bel ow. The
i mport ant t hi ng i s t o speci f y i n a t i me chart erpart y whet her l ocal t i me or
GMT i s t o appl y t o del i ver y and r edel i ver y t i mes. I f t he chart erpart y
remai ns si l ent on t hi s aspect , i n t he event of a l egal di sput e t he resul t
depends on t he l egal code whi ch appl i es t o t he cont ract , and t here can
be var yi ng resul t s. A recent Amer i can ar bi t rat or, f or exampl e, f ound t hat
i n t he event of si l ence i n t he chart erpart y, l ocal t i me woul d be deemed
t o appl y. Engl i sh Law, as expl ai ned above, woul d speci f y act ual

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el apsed t i me, or t i me est abl i shed by a common st andard such as GMT
at bot h ends of a t i mechart er.

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(West) Timecharter Duration Fax
London 30 days Bomb
Delivery Redelivery
(A) 1200 hrs. (Owner gains 5 Hours) 1700 Hrs. Local T
Local Time
(B) 1200 hrs. GMT (Equity) 1200 Hrs.
Redelivery Delivery
(C) 0700 Hrs. (Owner loses 5 Hours) 1200 hrs. Local
Local time
(D) 1200 hrs. Gmt (equity) 1200 hrs
Sal i ni t yShi ppi ng execut i ves shoul d be abl e t o underst and how sal i ni t y
cal cul at i ons are perf ormed as t hey may expect t o encount er port s where
t he cargo i nt ake needs t o be cal cul at ed, and where t he pr evai l i ng wat er
may be sal t , f resh or bracki sh (a mi xt ure of bot h). As you know, a
vessel i n f resh wat er wi l l be deeper draf t ed t han i f she wer e i n more
buoyant sal t wat er. Sal i ni t y af f ect s many t rades, f or exampl e t he
Panama Canal i s a f reshwat er canal , and t he avai l abl e draf t so
expressed. Fort unat el y, t he cal cul at i on i s rel at i vel y si mpl e, gi ven t he
f resh wat er al l owance (FWA) of a vessel , usual l y shown on t he shi p s
capaci t y pl an and t he densi t y of t he prevai l i ng wat er i n t he port or canal
(obt ai nabl e f rom port i nf ormat i on books or f rom t he l ocal port agent ).
Assumi ng, f or exampl e, t hat t he vessel s FWA i s 200 mm and t he
bracki sh wat er densi t y i s 1015 kg/ m3, the appl i cat i on of t he f ol l owi ng
f ormul a provi des : -

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RWA x (Densi t y of Sea Water Densi ty of Bracki sh Water)
Densi t y of Sea Wat er Densi t y of Fresh Water
Theref ore: I ncreased Draf t = 200mm x (1025 1015
1025-1000
Theref ore: I ncreased Draf t = 200mm x 10
25
Theref ore: I ncreased Draf t = 2000
25 = 80mm
Sel f Assessment Questi ons
1. I f i t i s Monday noon i n Tokyo what day/ t i me i s i t i n New York?
2. How many degrees of l ongi t ude represent one hour gai ned (or
l ost )?
3. Where woul d you expect t o l oad Kaol i n and what precaut i ons
shoul d be t aken i n i t s carri age?
4. What commodities would you expect to be carried in a reefer?
Test Questi on
The m. v. WHI MBREL, a Lakes f i t t ed, geared bul kcarr i er, perf orms t he
f ol l owi ng l oaded voyages: -
HOLLAND - CREAT LAKES
GREAT LAKES - VENEZUELA
U. S. GULF - W.C. MEXI CO
U. S. WEST COAST - JAPAN

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JAPAN - GERMANY
St at e t he number of days t he vessel woul d reasonabl y t ake t o perf orm
each l aden voyage and bal l ast l eg; gi ve t he name of one l oadi ng and
one di schargi ng por t i n each area; st at e a probabl e cargo and cargo
si ze, (each cargo must be di f f erent ) t hat t he vessel coul d l oad on each
voyage and suggest sui t abl e bunkeri ng port s.
Appendi x 8: 5a

I NTER-CLUB NEW YORK PRODUCE EXCHANGE AGREEMENT
( As amended May, 1984)

Preambl e: Memorandum of Agreement (herei naf t er ref erred t o as t he
Agreement ) as t o t he apport i onment of l i abi l i t y f or cargo cl ai ms ari si ng
under t he New York Produce Exchange Char t er bet ween
Assurancef oreni ngen Gard, Assurancef oreni ngen Skul d. The Bri t anni a
St eam Shi p I nsurance Associ at i on Li mi t ed. The Li verpool and London
St eamshi p Prot ect i on and I ndemni t y Associ at i on Li mi t ed. The London
St eam-Shi p Owners Mut ual I nsur ance Associ at i on Li mi t ed, Newcast l e
Prot ect i on and I ndemni t y Associ at i on. The Nort h of Engl and Prot ect i ng
& I ndemni t y Associ at i on Li mi t ed. The St andard St eamshi p Owners
Prot ect i on and I ndemni t y Associ at i on Li mi t ed. The St andar d St eamshi p
Owners Pr ot ect i on and I ndemni t y Associ at i on (Bermuda) Li mi t ed. The
St eamshi p Mut ual Under wri t i ng Associ at i on (Bermudal ) Li mi t ed. The
Sunderl and St eamshi p Prot ect i ng & I ndemni t y Associ at i on, Sver i ges
Angf art ygs Assurans Foreni ng. The Uni t ed Ki ngdom Mut ual St eamshi p
Assurance Associ at i on (Bermuda) Li mi t ed and The West of Engl and
Shi p Owners Mut ual Prot ect i on and I ndemni t y Associ at i on
(Luxembourg) (herei naf t er t oget her ref erred t o as t he part i es).
(1) Appl i cati on and I nterpret ati on of the Agreement Subject to the
undermentioned conditions the formule as set forth in Clause 2 shall apply in

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respect of Charters on the New York Produce Exchange form entered into
after the 1
st
June 1984.
(i )I t shal l be a condi t i on precedent t o set t l ement under t he Agreement
t hat t he cargo cl ai m, i ncl udi ng any l egal cost s i ncurred t her eon, shal l
have been proper l y set t l ed or compromi sed and t he cargo carri ed under
a bi l l or bi l l s of l adi ng i ncorporat i ng t he Hague or Hague-Vi sby Rul es or
cont ai ni ng t erms no l ess f avourabl e. Ex grat i a set t l ement s made f or
busi ness or ot her r easons where t here i s no l egal l i abi l i t y t o pay t he
cl ai m shal l be bor ne i n f ul l by t he part y by whom t he payment i s made
and f or t he purpose of t hi s Agreement no regard shal l be had t o such
payment s.
(i i ) (a)For t he Agreement t o appl y, t he cargo responsi bi l i t y cl auses i n
t he New York Produce Exchange Chart er must not be mat eri al l y
amended. A mat er i al amendment i s one whi ch makes t he l i abi l i t y f or
cargo cl ai ms, as bet ween Owners and Chart erers, cl ear. I n part i cul ar
t he addi t i on of t he words and di scharge i n Cl ause 8 shal l not be
deemed t o be a mat eri al amendment .
(b)However t he addi t i on of t he words and responsi bi l i t y wi t h ref erence
t o t he words under t he super vi si on i n Cl ause 8 t oget her wi t h t he
addi t i on of t he wor ds car go cl ai ms i n t he second sent ence of Cl ause
26 shal l render t he Agreement i noperat i ve. The addi t i on of t hese t wo
amendment s, or t he addi t i on onl y of t he words cargo cl ai ms i n Cl ause
26, wi t hout any ot her mat eri al provi si on i n t he Chart er shal l mean t hat
Owners shal l bear al l cargo cl ai ms subj ect t o Chart erers cont ri but i on
under t he Bert h St andard of Average Cl ause/ Chart erers Cont ri but i on
Cl ause (1971), i f appl i cabl e.
(c)I f t he onl y mat eri al amendment i s t he addi t i on of t he words and
responsi bi l i t y wi t h ref erence t o t he words under t he supervi si on i n
Cl ause 8, i t i s agreed by t he part i es heret o t hat i t shal l mean t hat t he

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apport i onment of cargo cl ai ms as set out i n Cl ause 2 shal l be vari ed i n
t he f ol l owi ng manner : -

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Cl ai ms f or l oss of or damage t o cargo due t o
unseawort hi ness and cl ai ms f or condensat i on
damage resul t i ng sol el y f rom i mproper vent i l at i on 100% Owners
Cl ai ms f or damage (i ncl udi ng sl ackage/ ul l age) due
t o bad st owage or handl i ng, and cl ai ms f or
condensat i on damage resul t i ng ot her wi se t han f rom
i mproper vent i l at i on
50% Owners
50% Chart er ers
Except as provi ded i n t he second paragraph of
Cl ause (2), short del i ver y cl ai ms (i ncl udi ng
pi l f erage) and cl ai ms f or overcarri age
50% Owners
50% Chart er ers

(i i i )The Agreement shal l appl y regardl ess of t he pl ace of Arbi t rat i on or
t he l egal f orum and whet her or not t he Chart er cont ai ns a Cl ause
Paramount i ncorpor at i ng t herei n t he Hague or Hague-Vi sby Rul es
and/ or t he Bert h St andard of Average Cl ause (ot her wi se known as t he
General St andard of Cl ai m Cl ause)/ Chart erers Cont ri but i on Cl ause
(1971).
(i v)Any cl ai ms pursued under t hi s Agreement by or on behal f of ei t her
Chart erers or Owner s shoul d be not i f i ed t o t he ot her part y i n wri t i ng as
soon as possi bl e but i n any event wi t hi n t wo years f rom t he dat e of
di scharge or t he dat e when t he goods shoul d have been di scharged,
f ai l i ng whi ch any r ecover y shal l be deemed t o be wai ved and t i me
barred. Such not i f i cat i on shoul d record bi l l of l adi ng det ai l s and t he
nat ure and amount of t he cl ai m.
(v)Where t he Chart er cont ai ns t he Bert h St andard of Average
Cl ause/ Chart er ers Cont r i but i on Cl ause (1971), such cl ause i s t o be
appl i ed af t er l i abi l i t y has been apport i oned i n accordance wi t h Cl ause
(2) or Cl ause (1)( i i )( c) as t he case may be and Chart er ers cont ri but i on

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under such cl ause shal l be per cargo voyage and not per bi l l of l adi ng
or parcel of cargo not wi t hst andi ng anyt hi ng t o t he cont rar y cont ai ned
t herei n.
(vi )Where Sub-Chart ers are i nvol ved t he Agreement , unl ess t he part i es
heret o ot her wi se agr ee i n any speci f i c case, shal l be appl i ed i n st ages
st art i ng wi t h t he part y who f i rst set t l es t he cargo cl ai ms. For exampl e i n
t he case of a si ngl e sub-chart er, i f t he cargo cl ai ms ar e set t l ed by t he
Sub- Chart erers, t he sai d cl ai ms shal l f i r st be apport i oned bet ween t he
Sub- Chart erers and t he Chart erers i n accordance wi t h t he Agreement ,
t he Chart erer s bei ng t reat ed f or t he purpose as i f t hey were t he
Owners, t he bal ance f al l i ng t o Chart erers account t hereaf t er bei ng
apport i oned bet ween t he Chart er ers and Owners i n accordance wi t h t he
Agreement .
(vi i )The Agreement i s not bi ndi ng on Members but i n al l cases t he
part i es wi l l recommend wi t hout qual i f i cat i on i t s accept ance t o Members
(2) Apporti onment of Cargo Cl ai ms
I n al l cases where t he Agreement appl i es cargo cl ai ms shal l be
apport i oned as hereunder: -
Cl ai ms f or l oss of or damage t o cargo due t o
unseawort hi ness 100% Owners
Cl ai ms f or damage (i ncl udi ng sl ackage/ ul l age) due t o
bad st owage or handl i ng 100% Chart erers
Except as provi ded i n t he succeedi ng paragraphs of
t hi s cl ause, shor t del i ver y cl ai ms (i ncl udi ng
pi l f erage), cl ai ms f or overcarri age, and cl ai ms f or
condensat i on damage
50% Owners
50% Chart er ers

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As regards short del i ver y and overcarr i age cl ai ms, where t here i s
cl ear and i rref ut abl e evi dence t hat t he short age or overc arr i age, as t he
case may be, was due t o act , negl ect or def aul t on t he part of Owner s
or Chart erers ser vant s or agent s, t hen t he part y whose ser vant s or
agent s were at f aul t shal l bear t he cl ai m i n f ul l . Thus i f t here i s
corroborat ed eye wi t ness evi dence t hat t he short age was due t o
pi l f erage by a st evedore, t he cl ai m wi l l f al l 100% t o t he account of
Chart erers, but i f by a crewmember, t hen 100% t o Owners, subj ect i n
t he l at t er case t o Chart erers cont ri but i on under t he Bert h St andard of
Average Cl ause/ Chart erers Cont ri but i on Cl ause (1971).
Cl ai ms f or condensat i on damage shal l be apport i oned as pr ovi ded
i n t he f i rst paragraph of t hi s cl ause, except where t her e i s cl ear
evi dence t hat t he damage was due sol el y t o bad st owage i n whi ch event
such cl ai ms shal l f al l 100% t o Chart erers account but where t here i s
cl ear evi dence t hat t he damage r esul t ed sol el y f rom i mproper
vent i l at i on, such cl ai ms shal l be borne 100% by Owners.
(3)Extensi on of Agreement I t shal l be open t o t he part i es t o appl y i n
whol e or i n part t he Agreement i f t hey so desi re not wi t hst andi ng t hat i t
i s not st r i ct l y appl i cabl e by reason of any of t he mat t ers set f ort h i n
Cl ause 1.
(4)Durati on The Agreement shal l cont i nue i n f orce unt i l vari ed or
t ermi nat ed. Any vari at i on t o be ef f ect i ve must be approved i n wr i t i ng by
al l t he part i es but i t i s open t o any Associ at i on t o wi t hdraw f rom t he
Agreement on gi vi ng t o al l t he ot her part i es not l ess t han t hree mont hs
wr i t t en not i ce t hereof , such wi t hdrawal t o t ake ef f ect at t he expi rat i on of
t hat per i od. Af t er t he expi r y of such not i ce t he Agreement shal l
nevert hel ess cont i nue as between all the parties, other than the party giving
such notice who shall remain bound by and be entitled to the benefit of this
Agreement in respect of all cargo claims arising out of charters commenced

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prior to the expiration of such notice.For example if the Standard Association
gave written notice of withdrawal from the Agreement on the 1
st
of January
1985, it would be bound to apply the Agreement in respect of cargo claims
arising out of charters commenced at any time on or befor e t he 31
s t
March
1985.
(5)Operati onNot hi ng herei n cont ai ned shal l af f ect any set t l ement
al ready concl uded bet ween t he part i es t o t hi s Agreement .

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CHAPTER- 10
DI SPUTES AND PROFESSI ONAL I NDEMNI TY
I t i s i nevi t abl e t hat t here wi l l be di sagreement s bet ween
cont ract i ng part ners f rom t i me t o t i me, al t hough most di f f erences wi l l be
set t l ed ami cabl y and wi t h a mi ni mum of t roubl e and expense. A f ew
di sput es, t hough, wi l l cause much more di f f i cul t y and i t may be t hat
out si ders wel l - versed i n commerci al l aw wi l l need t o be cal l ed i n t o
provi de i ndependent set t l ement . I n such cases i t i s i mport ant t o
est abl i sh t he l egal code t hat wi l l appl y, si nce l aws var y f rom pl ace t o
pl ace, and di f f erent deci si ons mi ght be reached on t he same set of
ci rcumst ances dependi ng on t he j ur i sdi ct i on t hat i s t o appl y. We have
seen f rom earl i er Lesson mat er i al how t he pl ace of resi dence of t he
cont ract i ng part i es t he pl ace where t he cont ract was made, or speci f i c
ref erence t o a part i cul ar pl ace or appl i cabl e l aw may each have a
bear i ng on where a di sput e shoul d be consi dered, debat ed and set t l ed.
Consequent l y, i t i s advi sabl e t o speci f y i n a chart erpart y or ot her
shi ppi ng cont ract t he l egal code t hat i s appl i cabl e f or t he ref erence of
any di sput es t hat may ar i se eg Engl i sh Law t o appl y and t o spel l
out t he f ormat of any l egal heari ng i . e. whet her di sput es are t o be
ref erred t o Court or, as i t al most al ways t he pref erence of t hose
engaged i n shi ppi ng cont ract s, t o Mar i t i me Arbi t rat i on. Much of
i nt ernat i onal shi ppi ng i s conduct ed i n t he Engl i sh l anguage and, gi ven
t he l ong hi st or y of deepsea t radi ng duri ng t he f ormul at i ve years of
commerci al shi ppi ng over recent cent uri es by t he Bri t i sh nat i on, i t
f ol l ows t hat a wi de rangi ng and adapt abl e commerci al l egal code has
evol ved whi ch many ci t i zens of t he worl d of non-Br i t i sh background
sel ect i n t i me of di sput e. Thus i t i s qui t e common t o f i nd, f or exampl e, a
Greek Shi powner and a Japanese Chart erer resol vi ng a dr y cargo
chart erpart y di sput e bef ore a London Arbi t rat i on based, of course, on

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Engl i sh Law. Equal l y, mi ght a Sout h Ameri can Cargo Recei ver and a
Scandi navi an Shi p Operat or have a di sput e hear d bef ore a j udge i n t he
Engl i sh Commerci al Court . That i s not t o say t hat ot her codes do not
f i nd i nt ernat i onal f ayour, and t here ar e i mport ant arbi t rat i on cent res i n
New York (The Soci et y of Mar i ne Arbi t rat or s) and i n Par i s (t he
arbi t rat i on f aci l i t i es of t he I nt ernat i onal Chamber of Commerce),
al t hough by f ar t he l argest number of shi ppi ng di sput es are conduct ed
i n London under t he t erms of Engl i sh Law.
Accordi ngl y, t here have grown up i n London t he Head Of f i ces of
numerous P & I Cl ubs; t he London Mar i t i me Arbi t rat ors Associ at i on, and
a l arger number of l awyers speci al i zi ng i n shi ppi ng di sput es.
Consequent l y, compani es and i ndi vi dual s f rom t he worl d over l ook t o
London and t o Engl i sh l aw f or gui dance on t he draf t i ng of shi ppi ng
cont ract s and f or resol vi ng di sput es t hereunder.
The Engl i sh Courts. A shi ppi ng di sput e t hat i s t o be resol ved i n t he
Engl i sh Court s woul d be ref erred t o a j udge i n t he Commerci al Court i n
t he f i rst i nst ance, t he Commerci al Court bei ng part of t he Queen s
Bench Di vi si on of t he Hi gh Court , i n London. Many t i mes t he di sput e wi l l
end wi t h j udgement at t hat st age, al t hough i t may be possi bl e t o appeal
agai nst t he ver di ct t o t he deci si on of a panel of j udges si t t i ng i n t he
Court of Appeal and, si mi l ar l y, agai nst t hei r j udgement t o t he hi gest
Court i n Engl and, t he House of Lords. Al l t hi s i s expensi ve and l i kel y t o
be t i me consumi ng however, as a consequence of whi ch, most part i es
sel ect i ng Engl i sh Law opt i n t hei r cont ract f or any di sput es t o be
ref erred t o Mar i t i me Arbi t rat i on i n London.
Engl i sh Mari ti me Arbi trati on. Al t hough t he pract i ce of shi ppi ng
arbi t rat i on i s not rest ri ct ed t o i t s members, most act i ve London-based
mari t i me ar bi t rat ors are f ul l members of the London Mar i t i me Arbi t rat or s
Associ at i on, an associ at i on present l y numberi ng around f i f ty mar i t i me
arbi t rat ors. Thei r backgrounds are ext remel y di verse and, t o pl ace t he
si gni f i cance of t hi s organi zat i on i nt o per spect i ve, i t s member s bet ween

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t hem publ i sh around 500 awar ds annual l y, recei vi ng around 4000
appoi nt ment s each year, probabl y more t han al l ot her mari t i me
arbi t rat i on cent ers added t oget her. These di sput es cover a wi de range
of subj ect s, i ncl udi ng chart erpart y, bi l l of l adi ng, sal e and purchase,
shi p operat i on, shi pbui l di ng, commodi t y and oi l t radi ng cont ract s.
Whereas i n some j uri sdi ct i ons arbi t rat or s may i n ef f ect be abl e
subst ant i al l y t o di sr egard any st em of l aw, LMAA members (and ot her
Engl i sh arbi t rat ors) are bound t o and consi st ent l y appl y Engl i sh
commerci al and mari t i me l aw. As we have seen, t hi s code of l aw i s now
so hi ghl y devel oped as t o be wi del y r egarded and appl i ed as i f i t wer e
t he i nt ernat i onal l aw of commerce and shi ppi ng. I t cont i nues t o deveop
i n or der t o meet changi ng needs l argel y due t o t he possi bi l i t y of
appeal i ng f rom deci si ons awards of arbi t rat ors, mai nl y i n t hose
cases where commerci al publ i c i nt erest i s i nvol ved. Under t he Engl i sh
Arbi t rat i on Act , 1950, as amended by t he Arbi t rat i on Act , 1979, as
amended by t he Arbi t rat i on Act , 1979, appeal s are rest ri ct ed, but t hose
t hat are grant ed are heard i n t he Commerci al Court (see above) whose
j udges have great experi ence i n commer ci al and mar i t i me ar bi t rat i on, a
f act or t hat of t en f aci l i t at es equi t abl e compromi se i n di sput es of t hi s
nat ure.
The i dea of arbi t rat i on was or i gi nal l y concei ved as a di st i nct l y
non- l egal met hod of sol vi ng di sput es and t he ar bi t rat or s pref erred and
chosen weremen wi t h a commerci al background rat her t han wi t h l egal
qual i f i cat i ons. I t was t hought t hat t hey woul d l end f ai rer and l ess
st rai ght -l aced mi nd t o t he di sput es on hand and i nt erpret t he
provi si ons of t he rel evant chart erpart y or ot her commeci al agreement
wi t hout bei ng st ri ct l y concerned wi t h t he l egal ni cet i es and sheer
accuracy or non-accuracy of t he l anguage used i n t he chart erpart y
wordi ng. One of t he best known of al l arbi t rat i on cl auses t he
Cent rocon Arbi t rat i on Cl ause requi res t he appoi nt ment of men
engaged i n t he shi ppi ng and/ or grai n t rades and who are Members of
t he Bal t i c Exchange , and, of course, where t he chart er part y i s pecul i ar

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t o a part i cul ar t rade, t hi s i s a most reasonabl e and l ogi cal st i pul at i on.
Nevert hel ess, over t he years, some mi ght say i nevi t abl y, t he procedure
of arbi t rat i on has gradual l y assumed a l egal f l avour.
When a chart er part y cal l f or each par t y t o appoi nt t hei r own
arbi t rat or (and i f t hey are unabl e t o agree, an umpi re of t he mut ual l y
appoi nt ed), i t mi ght be t hought t hat t her ei s a t endency t owards t he
arbi t rat ors bei ng advocat es f or t hei r appoi nt ers. Thi s, however, i s a
mi sconcei ved i dea si nce an arbi t rat i on i s a pr i vat e j udge rul i ng
i mpart i al l y bet ween t he part i es whet her si t t i ng as sol e arbi t rat or or as
member of a l arger t ri bunal . However, t he f ormal i t y of t he concept of
arbi t rat i on must not be underest i mat ed. Though i t may have been
i nt ended or i gi nal l y t o have a non-l egal f l avour, i t must nevert hel ess
ret ai n somet hi ng of t he j udi ci al si nce i t i s af t er al l an al t er nat i ve , i n f act
t he onl y al t er nat i ve i n t he absence of an ami cabl e sol ut i on bet ween t he
part i es t hemsel ves, t o court proceedi ngs. Al t hough t he agreement t o
arbi t rat e any di sput e may ori gi nal l y be an or al agreement bet ween t he
cont ract i ng part i es i t i s usual and advi sabl e f or t he agreement t o be
cont ai ned i n wr i t i ng ei t her as an expr ess cl ause i n t he chart erpart y
cont ract (see Mul t i f orm Cl ause 30 & NYPE Cl ause 17) t hough i t i s
unl i kel y t hat a court of l aw woul d grant a st ay of proceedi ngs i n f avour
of arbi t rat i on.
Such ar bi t rat i on cl auses can, and f requent l y do, cont ai n a t i me
l i mi t wi t hi n whi ch appoi nt ment s of arbi t rat ors shoul d be made and t he
l eadi ng case of t he I on (1971 Ll oyds 541) provi des a court r ul i ng as t o
what happens when an arbi t rat i on cl ause provi si on of 3 mont hs t i me
l i mi t (Cent rocon) conf l i ct s wi t h t he 12 mont h (Cl ause Paramount
Hague Rul es) pr ovi si ons whi ch appl i ed t o t he same cont ract . The Hague
Rul es l i mi t at i on per i od prevai l ed.Whet her an arbi t rat i on cl ause i n a
chart erpart y can be bi ndi ng upon t he i nnocent hol der of a bi l l of l adi ng
i ssued pursuant t o a chart erpart y i s dependent ent i rel y upon t he
i ncorporat i ng wor ds i n t he bi l l of l adi ng, when, i f suf f i ci ent l y
comprehensi ve, coul d ent i t l ed shi powner/ carri er t o compel a bi l l of

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l adi ng hol der t o arbi t rat i on under an arbi t rat i on agreement (or vi ce
ver sa).
An arbi t rat i on agreement t o be bi ndi ng and t o have t he prot ect i on
af f orded by t he Uni t ed Ki ngdom s Arbi t rat i on Act s, 1950 and 1979, must
be i n wr i t i ng and shoul d be expl i ci t i n i t s t erms. Thus a chart erpart y
cl ause wi t h wordi ng such as Arbi t rat i on, i f any, t o be hel d i n New York
i s not a bi ndi ng agreement t o arbi t rat e. I t merel y agrees t o arbi t rat e i n a
cert ai n named pl ace i f t here i s agreement t o arbi t rat e at al l a ver y
di f f erent t hi ng. An agreement t o arbi t rat e, bei ng cont ract ual i n nat ure,
must f or t hi s reason be preci se, umambi guous and cl ear i n i t s t erms
and wordi ng. The Uni t ed Ki ngdom Act gi ves a def i ni t i on of an arbi t rat i on
agreement as a wr i t t en agreement t o submi t present or f ut ure
di f f erences t o arbi t r at i on, wet her an ar bi t rat or i s named or not . How
wi de i n scope t he agreement t o arbi t r at e i s, depends agai n on t he
act ual wordi ng of t he cl ause. I f i t cont ai ns such words as al l mat t ers i n
di f f erece t he scope i s of course ext remel y compr ehensi ve, but t he
more commonl y used wordi ng i n mari t i me cont ract s di sput es ari si ng
out of t he cont ract woul d by i t s f ace val ue sense excl ude a di sput e
as t o whet her t he cont ract was ever ent ered i nt o i n t he f i rst pl ace.
The i ncl usi on of an arbi t rat i on agreement i n a chart erpart y does
not aut omat i cal l y excl ude t he j uri sdi ct i on of a Court of Law t o t r y
di sput es. Despi t e bei ng a part y t o an arbi t rat i on agreement an
aggri eved part y i n a chart erpart y agreement i s not barred f rom t aki ng
l egal act i on t hrough t he machi ner y of t he l aw. What occurs i n such a
si t uat i on i s t hat t he Court has a di scret i onar y power t o deci de whet her
i t wi l l st ay proceedi ngs i n f avour of arbi t rat i on or whet her i t wi l l t r y t he
i ssue. I t shoul d be remembered t hat even i f t he Court st ays pr oceedi ngs
i n f avour of arbi t rat i on, t hei r i nt er vent i on may become i nevi t abl e as a
means of enf orci ng any arbi t rat i on awar d t hat may event ual l y be made,
or al t ernat i vel y t o set si de an award when t here may have been
mi sconduct of an ar bi t rat or or umpi re or t he award has been f or some
reason i mproperl y secured, or si mpl y t here has been an error on t he

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f ace of t he award. To el aborat e on t hi s l ast phrase an error of l aw on
t he f ace of t he award has been descr i bed as some l egal proposi t i on
cont ai ned i n t he award, or document s i ncorporat ed i nt o i t , whi ch i s t he
basi s of t he award and whi ch can be sai d t o be erroneous. The error,
however, must appear on t he f ace of t he award ot her wi se t he Court s
have no di scret i onar y power t o set asi de.
Who may be appoi nt ed an arbi t rat or? Cert ai nl y not a madman, an
i di ot , an i nf ant or an out l aw. These are r ecogni zed di sabi l i t i es. An abl e
arbi t rat or i s a person of suf f i ci ent ski l l i n t he mat t er under di sput e and
i s not i mpeded l egal l y or nat ural l y f rom gi vi ng good sound j udgement .
The cat egory of persons may be limited and defined as indeed it is in the
Centrocon Arbitration clause where the idea is to appoint persons versed in
the shipping and/or grain trades. It is important, naturally to be impartial
and have no bias, interest or leaning towards one or the other party. This is
a ground for disqalification. If, of necessity, an arbitrator becomes a witness
in the arbitration, this is also ground for di squal i f i cat i on. The produce t o
be f ol l owed i n arbi t rat i on proceedi ngs i n chronol ogi cal order i s as
f ol l ows. Fi rst , t he ar bi t rat or(s) must be appoi nt ed by t he part i es t o t he
di sput e and accept t he appoi nt ment . Secondl y t he arbi t rat or(s) may
wi sh t o meet wi t h t he part i es t o t he di sput e i nf ormal l y pri or t o an of f i ci al
hear i ng. Thi rdl y, t he mat t er goes t o a heari ng, t he t i me and pl ace bei ng
t he choi ce of t he ar bi t rat or(s) unl ess ot her wi se speci f i ed. Al t ernat i vel y,
i f t he part i es choose, t he mat t er may be r esol ved on document s al one .
Each part y s counsel may be present at a hear i ng, at t hei r opt i on,
provi ded suf f i ci ent not i ce i s gi ven t o t he opposi ng part y. Al l evi dence
must be f ul l y heard and t he ar bi t rat ors have absol ut e r i ght t o deci de
whet her evi dence i s admi ssi bl e or not . Great care shoul d be exerci sed
si nce t he wr ong admi ssi on of evi dence coul d be such a f undament al
mi st ake as t o l ead event ual l y t o t he set t i ng asi de of t he arbi t rat i on
award. Af t er concl usi on of t he hear i ng t he arbi t rat ors must pr epare t he
Award whi ch i s t he document cont ai ni ng t hei r deci si on. The a ward i s
f i nal and f or t hi s reason must be cl ear, unambi guous and deci si ve.

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The ref erri ng of a di sput e t o arbi t rat ors i s known t echni cal l y as
t he ref erence . Di st i nct i on shoul d be made bet ween t he cost s of t he
ref erence and t he cost s of t he awar d. Basi cal l y, t hese are i n t he
di scr et i on of t he arbi t rat ors. The cost s of t he ref erence i ncl ude al l t hose
general and speci al expenses i ncurred i n t he course of enqui ri es ei t her
by t he part i es or by t hei r l egal advi sers. The cost s of t he award are t he
remunerat i on and expenses due t o t he arbi t rat or and whi ch he has a
ri ght t o demand as a condi t i on pr ecedent t o hi s del i veri ng hi s award.
The usual rul e r egardi ng cost s i s t hat t hey f ol l ow t he event . That i s t o
say t hat t he part y whi ch i s unsuccessf ul bears al l t he cost s. The
arbi t rat or may, however, i n hi s di scr et i on var y t hi s and may, f or
exampl e di rect t hat each part y bears hi s own cost s ( i . e. hi s own cost s
of t he ref erence) and hal f t he cost s of t he award.
The 1979 Act abol i shed t he case st at ed procedure ori gi nal l y
i nt roduced by Sect i on 21 of t he 1950 Act . I n sweepi ng away t hi s
procedure t he new Act al so r emoved t he ri ght t o have an arbi t rat i on
award set asi de because of an error of f act or of l aw on t he f ace of t he
award. Thi s was a l ong st andi ng ri ght under t he Common Law. I t was
due t o t he st rengt h of t hi s ri ght t hat Mari t i me Arbi t rat ors have
t radi t i onal l y gi veh t he reasons f or t hei r award i n a separ at e document
f or t he i nf ormat i on of t he part i es, not t o be consi dered as an of f i ci al
part of t he awar d i t sel f .
The new Act i nt roduced a new procedure of Appeal excl usi vel y
concerned wi t h an error i n Law. To some ext ent al so t here i s st i l l
l i mi t ed l at i t ut e gi ven t o an Arbi t rat or or ei t her of t he part i es, i f , duri ng
t he course of t he arbi t rat i on proceedi ng a di f f i cul t quest i on of l aw
ari ses, t o appl y t o t he Hi gh Court f or an answer. The quest i on,
however, must be of real i mport ance subst ant i al l y af f ect i ng the ri ght s of
one or bot h part i es and one whi ch mi ght pot ent i al l y mean subst ant i al
savi ng on t he part i es cost s.
When t he Act f i rst became ef f ect i ve i t was t hought general l y t hat

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an appeal f rom an award woul d be t he except i on rat her t han t he rul e
but i t soon became apparent t hat i t was t he ot her way round. Losi ng
part i es r ushed t o appeal . The resul t of t hi s was t hat i t has now
becomed di f f i cul t t o get l eave t o appeal . The vast maj ori t y of
appl i cat i ons have been t urned down. I t i s i mport ant , t heref ore, t o regard
t he Arbi t rat ors as t he f i nal arbi t ers (part i cul ar l y so i f t he part i es j oi nt l y
expressed t hei r wi shes t o t hat ef f ect i n t he wordi ng of t he arbi t rat i on
agreement ), unl ess t he f i ndi ngs were so obvi ousl y wrong t hat , i n t he
i nt erest s of j ust i ce t hey have t o be correct ed. For a j udge t o reverse t he
deci si on of an arbi t r at or on pur el y t echni cal poi nt s of l i t t l e si gni f i cance
t o t he real i ssues, was not what t he dr af t ers of t he l egi sl at i on had i n
mi nd. One gui del i ne suggest ed was t hat i f , f or exampl e, t he
chart erpart y cl ause i n di sput e was a one-of f cont ract whi ch was
unl i kel y t o ar i se agai n, l eave t o appeal shoul d be deni ed unl ess t he
arbi t rat or was so obvi ousl y wr ong i n hi s deci si on t hat i t woul d be
i nequi t abl e not t o di st urb hi s awar d.
One sect i on of t he 1950 Act whi ch has remai ned unaf f ect ed by
t he 1979 Act , al l ows rel i ef i n cert ai n ci rcumst ances when one part y ha s
st ri ct l y rai sed agai nst t he ot her t he t i me bar, due t o t he f ai l ure by t he
ot her part y t o appoi nt hi s arbi t rat or wi t hi n t he t i me al l owed (perhaps
t hi s i s a f eat ure of what Lord Denni ng meant when he sai d t he l aw was
about j ust i ce and not st ri ct ness). I f t o stand f i rm on t he t i me bar woul d
cause t he ot her part y undue hardshi p, t hen t he Court i s empower ed t o
ext end t he t i me at i t s di scret i on. I n t he VI RGO case (1978 2 Ll yods) t he
Court of Appeal sai d t hat i t woul d be qi t e wr ong i f shi powner/ i s P & I
Cl ub, coul d prof i t f rom t hei r own l axness/ i nact i vi t y dur i ng i nvest i gat i on
of a cl ai m, by l eapi ng i n and screami ng t i me bar . The t i me bar cannot
be appl i ed absol ut el y and st ri ct l y i f t o do so woul d resul t i n undue
hardshi p, whet her t he t i me bar i t sel f i s regarded as t ot al l y ext i ngui shi ng
t he cl ai m or as merel y barr i ng t he remedy. Can an Arbi t rat or award
i nt erest ? Yes, he i s cl oaked wi t h t he same aut hor i t y as any commerci al
j udge and i s gi ven ampl e di scret i on, provi ded t hat i t i s j ust and
equi t abl e t o do so.

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I nt erest i s i n ef f ect compensat i on f or a person who i s bei ng kept
f rom hi s money. What shoul d be t he i nt erest rat e? Shoul d i t be t he
l endi ng or t he borrowi ng rat e? I . e. shoul d t he part y be compensat ed
because he has had t o borrow money t o meet a commi t ment whi ch he
woul d not have had t o borrow had be been t i mel y pai d t he capi t al sum
due t o hi m or because he has been robbed of t he opport uni t y t o t i mel y
i nvest t he capi t al sum due t o hi m and t hus earn i nt erest ? One vi ew has
been t hat a sui t abl e rat e of i nt erest shoul d be t he mi ni mum l endi ng rat e
of i nt erest shoul d be t he mi nmum l endi ng rat e pl us 1% t o arri ve at a
reasonabl e borrowi ng rat e (Wal l erst ei ner v Moi r 1975 I QB 373).
Not e part i cul ar l y t he Techno I mpex case (1981 1 Ll yods) whi ch
conf i rms t hat t he Ar bi t rat or s di scret i onary power i n r el at i on t o awardi ng
i nt erest i ncl udes even si t uat i ons where t he pri nci pal sum has act ual l y
been pai d bef ore or af t er t he arbi rat i on has been commenced or bef ore
or af t er t he ward has been made. Thus i t seems t hat Arbi t r at ors have
power t o award i nt er est where, e. g. t he respondent has pai d up onl y at
t he el event h hour bef ore t he award t he made.
Any doubt as t o t he correct rat e of i nt erest shoul d be resol ved i n
t he l i ght of any f act ors rel evant t o t he currency i n whi ch t he award i t sel f
i s made. I n many ways, ar bi t rat ors are even more qual i f i ed t han j udges
t o award i nt erest , si nce arbi t rat ors ar e commerci al l y mi nded men and
what i s mor e commerci al l y or i nent at ed t han t he concept of i nt erest ?The
pract i ce and procedures f or mari t i me ar bi t rat i on i n London have become
hi ghl y devel oped and have been condi f i ed i nt o t he LMAA Terms, t he
l at est versi on i n 1987 part i cul ar l y encouragi ng speed and earl y
hear i ngs, t he power of arbi t rat ors t o order t he pr ovi si on of securi t y f or
cost s, and t o order rect i f i cat i on of a cont ract i n cert ai n ci rcumst ances.
There is now also a codified small claims procedure to simplify smaller
cases, and which limits costs to a fixed, modest sum, whilst concilation and
mediation procedures are also possible.I t may al so be usef ul t o not e t hat t he
LMAA recommends a part i cul ar arbi t r at i on cl ause f or i nsert i on i nt o

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cont ract s, and t hi s i s reproduced i n Appendi x 10 : 1. The LMAA Clause
does not refer to the small claims procedure, but parties to shipping
contracts are not precluded from adding an extra sentence to their arbitration
clause, such as Not wi t hst andi ng t he above condi t i ons, al l di sput es up t o
a val ue of $25, 000 are t o be deal t wi t h under t he t erms and condi t i ons
of t he LMAA Smal l Cl ai ms procedure, 1989.
Sel f Assessment Questi ons
1. Where are t he mai n Mar i t i me Ar bi t rat i on cent ers?
2. What are names of t he arbi t rat i on associ at i ons i n London and i n
New York?
3. I n London, t o wher e woul d one appeal f ol l owi ng an Arbi t r at i on
Awar d and on what grounds?
4. What i s t he dat e of Engl and s l at est Arbi t rat i on Act ?
Protection and Indemnity Associations (P & I Clubs)
Much has been ment i oned about P & I Cl ubs i n var i ous l essons i n
t hi s Course, and t he act i vi t i es of t hese organi zat i ons permeat e al most
ever y sect i on of t he dry-cargo shi ppi ng i ndust r y. But what exact l y ar e
t hey?There are several t ypes of Cl ub, al t hough by f ar t he l argest and
f i nanci al l y st rongest sect or are Shi powners Prot ect i on and I ndemni t y
Associ at i ons, mut ual non-pr of i t maki ng organi zat i ons whi ch provi de
i nsurance cover f or shi powners and operat ors whi ch i s compl ement ar y
t o t he i nsurance cover pl aced on t he i nsurance market , and whi ch was
di scussed br i ef l y i n Lesson Ei ght . Al t hough t here i s no preci se di vi di ng
l i ne bet ween t he cover af f orded by i nsurance compani es and t hat
provi ded by P & I Cl ubs ( i n f act pandi i nsurance (pandi = P & I ) i s al so
avai l abl e t o a l i mi t ed degree f rom t he i nsurance market , whi l st cl ubs

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t radi t i onal l y provi de one quart er of a shi powner s col l i si on i nsurace
l i abi l i t y), i n gener al t erms i t mi ght be sai d t hat Ll oyds under wr i t ers and
i nsurance compani es i nsur e shi ps and cargoes, whi l st shi powners P & I
Cl ubs i nsur e t hei r l i abi l i t i es.
Two of t he f act ors whi ch cont r i but ed t o t he f ormat i on of
shi powners P & I Cl ubs wer e t he addi t i onal r i sks whi ch sh i powner s had
t o assume f ol l owi ng t he al most uni versal accept ance of t he Hague
Rul es ( whi ch we al so l earned about i n Lesson Ei ght ), and t he
rel uct ance of under wr i t ers t o accept more t han t hr ee-quart ers of an
owner s l i abi l i t y f or damage done t o anot her shi p i n a col l i si on.
Accordi ngl y owners associ at ed t oget her on a mut ual basi s, f ormi ng t he
di rect i ng boads of the Cl ubs, whose managers are most l y prof essi onal
l egal part nershi ps wi t h l egal exper i ence. Subscr i pt i ons ( or cal l s ) are
made annual l y based on t he t onnage ent ered and on t he record of t he
part y i nvol ved. A hi gh cl ai ms r ecord shoul d mean t hat t he cal l s wi l l be
l evi ed at a hi gher rat e t han f or an ent ered owner wi t h a l ow cl ai ms
record. I f f orecast ed cl ai ms are hi gher t han expect ed, suppl ement ar y
cal l s wi l l need t o be l evi ed t o enabl e t he Cl ub t o pay i t s way.
Prot ect i on woul d deal wi t h mat t ers such as : - One quart er of
owner s col l i si on l i abi l i t y; personal i nj ur y; cr ew l i abi l i t i es; damage t o
pi ers; and removal of wrecks. I ndemni t y woul d i nvol ve : - l oss of or
damage t o cargo, a shi p s proport i on of General Average; and cust oms
f i nes. A t hi rd sect i on of cover Frei ght , Demurrage and Def ence
woul d be concerned wi t h t he enf orcement of l egal proceedi ngs f or
col l ect i on of f rei ght and hi re; conduct of at i ons and arbi t rat i ons, and
general l egal advi ce t o members.
Some shi powners Cl ubs seek t o at t ract Chart erers and Operat ors
as members whi l st speci al i zed Chart er ers P & I Cl ubs exi st t o provi de a
range of ser vi ces f or chart erers such as cover f or cost s and expenses
i ncurred i n assert i ng or def endi ng court act i ons or arbi t r at i ons ( i . e.
Def ence cover) and i ndemni t y f or l i abi l i t i es t owards shi powners,

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di sponent owners and cargo owners under voyage and t i me
chart epart i es ( i . e. Li abi l i t y cover).
The t hi rd Cl ub t ype Prof essi sonal I ndemni t y I nsurance exi st s
f or t he benef i t of Shi pbrokers and Agent s, provi di ng servi ces f or
members act i ng i n t he exerci se of thei r pr of essi on as agent s i n
chart eri ng, sal e and purchase of shi ps, port agency, f rei ght f orwardi ng,
l i ner agency, t ravel agency, ai rbroki ng, bunker broki ng and shi p
management , t hi s cover i s avai l abl e f rom one speci al i st cl ub, based i n
London t he shi pbrokers Agent s and Managers Mut ual I nsurance
Associ at i on (SAMI A) brought about by t he merger of t he Transport
I nt ermedi ar i es Mut ual (TI M) and Chart erers I nt ernat i onal Shi p Brokers
and Agent s Cl ub (CI SBA). The cover i s desi gned t o assi st i n t he
recover y of brokerages and port di sbursement , and i ndemni f i es
members agai nst err ors, omi ssi ons and negl i gence, i ncl udi ng breach of
warrant y of aut hori t y, a subj ect di scussed i n det ai l earl i er i n t hi s
Course. Somewhat si mi l ar cover may be obt ai ned on t he Lyoyds market
and f rom a f ew i nsur ance compani es.

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I n t hei r Non Mandat ory Rul es f or Shi ppi ng Agent s UNCTAD
requi re an appropr i at e l evel of l i abi l i t y i nsurance whi l st i t i s mandat or y
f or Members of t he Bal t i c Exchange and f or Company Members of t he
I nst i t ut e of Chart ered Shi pbrokers t o have sat i sf act ory prof essi onal
i ndemni t y i nsurance cover.
Unknown Carterers and Owners By f ar t he maj ori t y of chart erers,
operat ors, shi powners, brokers and agent s are honest , al t hough i n most
cases shrewd and keen t o t ake t he maxi mum advant age of t radi ng
opport uni t i es. I n f act , t he f unct i oni ng of t hi s most compl ex of market s
depends t o a great ext ent upon mut ual t rust . Consequent l y, an
unscrupul ous t rader or shi powner does have t he opport uni t y t o expl oi t
t he t rust of ot hers (al bei t br i ef l y). I t i s t her ef ore i mperat i ve t hat
shi powners encount eri ng previ ousl y unknown chart erers and chart erers
uncert ai n about t he credent i al s of a new shi powner shoul d i nvest i gat e
t he ot hers background.
Can t he newcome provi de a bank ref erence and/ or guar ant ee
bef ore compl et i ng busi ness? Are ot hers who have conduct ed busi ness
wi t h t hem bef ore prepared t o of f er r ecommendat i on? Have t hey come t o
t he not i ce of bodi es such as BI MCO, The Bal t i c Exchange, or t he
I nt ernat i onal Mari t i me Bureau (t he br anch of t he I nt ernat i onal Chamber
of Commerce, deal i ng wi t h unscr upul ous act i vi t i es)? What has market
gossi p t o say about t hem?
Professi onal Survi val Shi ppi ng can be a l ot of f un and an ent ert ai ni ng
career. But i t can al so be commerci al l y dangerous. I t i s essent i al t o
l ear n f rom experi ence, t o arm onesel f wi t h knowl edge, and t o devel op
gui de and abi l i t y, at t he same t i me gai ni ng a reput at i on f or i nt egri t y. I f
al l t hi s can be al l i ed t o obt ai ni ng a prof essi onal qual i f i cat i on, such as
t hat of f ered by t he I nst i t ut e of Chart ered Shi pbrokers, so much t he
bet t er. Al l t hi s may seem a t al l or der. But l i ke any ot her obj ect i ve i t
needs t o be anal ysed and a means of achi evi ng t hese ai ms pl anned out .
That done, i t wi l l not appear an unat t ai nabl e goal .

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Fi rst one needs to acquire knowledge, not only of day to day market
events but also of more basic data. A good start in this direction will be
membership of various bodies, either individually or as an employee of a
corporate entity. Valuable shipping organizations involved in dry-cargo
shipping i ncl ude : -
1) The Baltic Exchange (open now to associates who do not necessarily
attend daily who may be resident outside the UK).
2) I nst i t ut e of Chart ered Shi pbrokers bot h i ndi vi dual and corporat e
t he f ormer t hrough exami nat i on and l eadi ng t o f el l owshi p st at us
whi ch qual i f i es t he i ndi vi dual t o be t ermed a Char t ered
Shopbroker.
3) The Bal t i c I nt ernat i onal Mari t i me Counci l open t o shi ppi ng
organi zat i ons and pr ovi di ng val uabl e expert i se and f aci l i t es t o t he
i nt ernat i onal shi ppi ng communi t y.
4) I nt ernat i onal Mari t i me Bureau one of Shi ppi ng s Pol i ce f orces
t here t o pr ot ect i t s members f rom deal i ng wi t h l ess desi r abl e
corporat i ons and i ndi vi dual s.
5) P & I Cl ubs an essent i al f or owner s and chart erers al i ke
al t hough i t i s surpri si ng how many chart erers st i l l carr y on wi t hout
t he prot ect i on of a P & I Cl ub behi nd t hem.
6) Prof essi onal I ndemni t y Cl ub becomi ng more and more essent i al
f or such as brokers and shi p managers.
Secondl y, despi t e a possi bl y busy wor k-schedul e, t i me shoul d

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al ways be f ound t o be s wi de-read as possi bl e. Apart f rom readi ng your
l ocal shi ppi ng press (such as Ll oyd s Li st i n t he UK), i t i s i mport ant al so
t o keep up t o dat e wi t h bot h i ndust ri al and i nt er nat i onal news i n or der t o
be prepared f or i t s i mpact upon she shi ppi ng wor l d.
I n addi t i on, bui l d up a personal and/ or a corporat e l i brar y of such
t ext books t hat are di rect l y rel evant t o your busi ness act i vi t i es, al ways
keepi ng al ert f or new books or new edi t i ons of exi st i ng ones.
Some of t he organi zat i ons l i st ed above (eg BI MCO) publ i sh regul ar
magazi nes as part of t hei r membersi p whi l st ot hers (eg Lyod s of
London Press) i ssue per i odi cal report s on mar i t i me af f ai rs such as
current l aw cases. Al l of t hi s, however, i s of t i t l e prot ect i on, i f great care
i s not exerci sed i n dai l y t radi ng and especi al l y i n t he draf t i ng of
cont ract s. Here t he chart erpart y l i brar y r ef erred t o ear l i er i n t hi s course
wi l l assi st but t here i s l i t t l e sust i t ut e f or exper i ence and wi de-readi ng
i nt o adapt ed cont ract cl auses. Fi nal l y, i t hel ps great l y t o operat e i n an
ef f i ci ent , encouragi ng envi ronment , br i ngi ng us t o t he i mport ant t opi c of
of f i ce organi zat i on.
Offi ce Organi sati onThere are some of f i ces wi t h l ow overheads whi ch
regul arl y produce a hi gh i ncome and t urnover wi t h l i mi t ed st af f
numbers. On t he ot her hand, t here are over -st af f ed organi zat i ons,
whi ch perf orm badl y. I t i s not t hat st af f i n ei t her group work part i cul ar l y
harder t han i n t he ot her, al t hough personal mot i vat i on i s an i mport ant
f act or. The mai n di f f erence comes down t o organi sat i on .
I n t he dr y-cargo market wi t h i t s var i et y of pl ayers rangi ng f rom
shi powners t o chart erers, f rom t raders t o operat ors, and f rom brokers t o
agent s, di f f erent sect ors requi re di f f erent oragni sat i on t echni ques.
Consequent l y, i t i s di f f i cul t here t o do more t han t o general i ze, except
t o ment i on t hat wi t h comput er i zat i on, many of t he l abour and t i me-
demandi ng t asks can now be t ackl ed f ar more ef f ect i vel y. I t shoul d
t hereore be an essent i al dut y of anyone gi ven t he r esponsi bi l i t y f or

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of f i ce admi ni st rat i on t o consi der caref ul l y and regul ar l y how essent i al
act i vi t i es may be bet t er perf ormed, at t he same t i me gi vi ng st af f an
i nt erest i ng and responsi bl e opport uni t y t o conri but e t o t he over al l ai ms
of t he company.
For shi powners, of f i ce personnel numbers can be rel at ed t o t he
number of vessel uni t s at sea i n or de t o assess whet her or nor
admi ni st rat i on st af f i s bei ng kept t o reasonabl e proport i ons. Obvi ousl y,
wi t h a smal l f l eet of , say, l ess t han f i ve shi ps, of f i ce personnel per
vessel wi l l probabl y be at a hi gher rat i o t han i s necessar y f or a l arger
f l oeat .Wi t h a l arge f l eet i t i s possi bl e t hat ef f ect i ve cont rol f rom t he ver y
t op of t he organi zat i on may be weakened unl ess st ri ngent report i ng
procedures are l ai d down and adhered t o. One way of exerci si ng
ef f ect i ve cont rol i s t o creat e t eams of admi ni st rat ors operat i ng
i ndi vi dual f l eet s wi t hi n t he whol e, t hereby doi ng away wi t h
depart ment al i zat i on t hat woul d ot her wi se be requi red and whi ch t ends
t o creat e unnecessary ri val r i es, rat her t han t o bui l d up a mor e heal t hy,
compet i t i on amongst i nt ernal f l eet s, whi ch i s t o be encouraged.
Whet her depart ment al i zed or di vi ded i nt o f l eet uni t s t he act i vi t i es
whi ch need adequat e cover age mi rror shi p-management dut i es, such as
operat i ons chart er i ng, port capt ai ncy, t echni cal , i nsurance, st ori ng and
provi si oni ng and account ancy. The si ze of shi pbr oker s organsat i on
depends on t he number f cl i ent s t hey ser vi ce by t hey chart erers,
operat ors or shi powners. The more cl i net s, t he more brokers. The more
brokers t he more back-up st af f such as t hose engaged i n post -f i xt ure
and account ancy rol es.
The i nt roduct i on of desk-t op personal comput ers i n shi pbroki ng
has l argel y el i mi nat ed secret ari al assi st ance, i n t he more t echni cal l y
advanced shi pbrokers of f i ces but t her e are st i l l t wo maj or areas of
di f f i cul t y t endi ng t o prevent a t rul y t horough comput er i zed syst em. The
f i rst i s t he di f f i cul t y of prepar i ng chart er part i es, near l y al l f orms bei ng
based on paper of odd di mensi ons and i n ol d-f ashi oned pr i ned t ext t hat

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i s f requent l y amended duri ng negot i at i ons, cal l i ng f or accuracy of
preci se del et i ons and i nsert i ons when dr af t i ng.
Secondl y, al t hough t he f acsi mi l e machi ne and ef f i ci ent couri er
ser vi ces have reduced i f not ent i rel y el i mi nat ed t he necessi t y f or j uni or
st af f t o spend much t i me runni ng errands out si de shi pbroker s of f i ces,
t hose of f i ce j uni ors st i l l empl oyed f i nd more and more of t hei r t i me
spent f eedi ng comput ers wi t h t onnage posi t i on dat a i ncl udi ng shi p
charact er i st i cs, wher eabout s and avai l abi l i t y al l desi gned t o speed t he
i dent i f i cat i on of pot ent i al l y sui t abl e vessel s f or chart erers seeki ng
t onnage.
I t woul d seem t hat a cent ral bur eau t o whom shi powners coul d
pass det ai l s of avai l abl e t onnage and f rom whom enl i st i ng si pbrokers
coul d ext ract appropri at e dat a woul d be t he answer t o t hi s probl em.
Thi s, however, overl ooks t he demand f or secrecy, bot h f rom owners
who wi sh t o di sgui se f rom t he general market t he avai l abi l i t y of some or
al l of t hei r shi ps, and secondl y f rom t he more ef f i ci ent br okers who do
not wi sh t o gi ve away t hei r advant age. I n f act , t he l ast t hi ng t hat any
shi pbroker want s i s f or chart erers and owners t o communi cat e di r ect l y,
as t hi s wi l l reduce demand f or shi pbr oki ng servi ce.
The admi ni st rat i on of a chart erer s of f i ce depends ver y much on
t he si ze and t ype of chart erer. What many shi ppi ng personnel t end t o
overl ook, however, i s t hat a shi pchart er i ng depart ment of a chart erer
may be a ver y smal l and perhaps i nsi gni f i cant part of t he organi zat i on
as a whol e. I n many such organi zat i ons t he maj or rol e i s i n market i ng
t hei r product s. Wi t h st eel works, f or exampl e, t he suppl y of a power
source such as coal i mport ant t hough i t may be t o t he wel l -bei ng of
t he company may rank ver y l ow i n order of corporat e pri or i t y.
Si mi l arl y wi t h t rader s, where t he Li on s share of prof i t s i s t o be made i n
successf ul buyi ng and sel l i ng of product s rat her t han i n shi pment
act i vi t i es. Some such compani es recogni ze t he need t o be ef f i ci ent i n
chart eri ng as i n al l ot her corporat e act i vi t i es and hi re t al ent ed and

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ef f ect i ve st af f t o perf orm t hese dut i es. Ot hers, however, rel y heai l y on
out si de shi pbroki ng expert i se. The f ormer wi l l obvi ousl y t end t o be mor e
hi ghl y st af f ed t han t he l at t er.
Putti ng your Knowledge I nt o Effect I t i s cont i nual l y sur pri si ng t hat f or
such a prof essi onal and l ong-est abl i shed act i vi t y as i nt ernat i onal
shi ppi ng, cont ract cl auses ar e f requent l y poor l y-draf t ed and open t o
var i ous i nt er pr et at i on. Here are t wo real exampl es of such cl auses t hat
t he wr i t er of t hi s course encount ered i n recent weeks, one f or a t i me-
chart er and t he ot her f or a voyage chart er : -
1) The ti me charter exampl e Thi s t i mechart er i s f or 18 mont hs, wi t h
Chart erers opt i on of a f urt her 12 mont hs, t o be decl ared mi ni mum 3
mont hs pr i or expi r at i on of f i rst peri od. Pl us or mi nus 1 mont i n
Chart erers opt i on on f i nal peri od. I t i s cl ear t hat no l at er t han f i f t een
mont hs i nt o t he chart erpart y peri od t he Chart erer has t o dec l are
whet her t he opt i on t o ext end t he chart er by a f urt her t wel ve mont hs i s
t o be exerci sed or not . I t i s al so cl ear t hat , havi ng decl ared t hat opt i on,
t he Chart erer can r edel i ver t he vessel somewhere bet ween 29 and 31
mont hs af t er del i ver y on t o t i mechart er.
What i s not cl ear i s what happens i f t he Chart erers do not decl are
t he ext ensi on opt i on. I t i s al most i mpossi bl e t o redel i ver a vessel af t er
exact l y ei ght een mont hs, unl ess t he vessel i s kept i dl e f or some t i me
f ol l owi ng compl et i on of her di scharge i mmedi at el y previ ous t o t he
expi rat i on of ei ght een mont hs. Thi s mi ght mean l eavi ng t he vessel i dl e
f or some days, i f not weeks. Yet on t he f ace of i t t hat i s what t he cl ause
requi res t he Chart er ers t o do. There i s no one mont h more or l ess t o
be appl i ed t o t he st rai ght ei gheen mont hs per i od. Thi s may me l egal l y
i mpl i ed. Equal l y i t may not . I t i s an exampl e of a poor l y draf t ed cl ause.
2) The voyage charter exampl e The cargo t o be l oaded at Pusan
(Sout h Korea) and di scharged at Bangkok and Port Kel ang. The
Chart erers ordered t he vessel f i rst t o Port Kel ang and t hen t o Bangkok

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t o di scharge, l i ght eni ng at Port Kel ang down t o Bangkok draf t . The
Owners i nsi st ed on di schargi ng f i rst at Bangkok (l i ght eni ng l ocal l y at
Kohsi chang) and t hen compl et i ng at Port Kel ang, because t hi s woul d
save t hem ext ra st eami ng and bunker consumpt i on. St udy t he at l as and
you wi l l see what t he argument was al l about . No ment i on was made i n
t he chart er part y of di schargi ng i n geographi c rot at i on, nor was t here
any cl ause maki ng di scharge port rot at i on i n Chart erers or i n Owner
opt i on. There i s apparent l y no l egal precedent i n Engl i sh Law whi ch
i ndi cat es who was r i ght or wrong, but advi ce ranged f rom di schargi ng i n
t he order as shown i n t he chart erpart y ( but i f t hi s was so what woul d
t he owner say i f di scharge was t o be at Bangkok and Bombay - and
Bombay was f i rst ment i oned?) t o ref erence t o st andard t ext books whi ch
ref er t o t he reasonabl e, di rect rout e. I s i t reasonabl e t o al l ow f or
l i ght eni ng at Bangkok or t o di sregard t hi s?
None of us shoul d bel i eve t hat we are not capabl e of drawi ng up
cl auses t hat are equal l y pot ent i al l y di f f i cul t t o i nt erpr et . We are al l
l i abl e t o do so. But we must al l guard agai nst t hi s t o t he best of our
abi l i t y unl ess we wi sh t o end up i n ar bi t r at i on or a court of l aw!
Test Questi on
The rel el vant cl auses of a voyage chart erpart y read as f ol l ows : -
Cl ause 7 : Cargo t o be di scharged at t he aver age rat e of . Tones per
weat her worki ng day of 24 runni ng hours. Ti me f rom noon Sat urday, or
a day pr ecedi ng a hol i day, t hr ough t o 0800 hours Monday, or t he day
f ol l owi ng a hol i day except ed, unl ess used ( when act ual t i me used t o
count ).
Cl ause 9 : Ti me at di schargi ng port t o commence at 0800 hours on t he
worki ng day f ol l owi ng t he day Mast er has t endered vessel s not i ce of
readi ness t o di schar ge t o Recei vers duri ng busi ness hours, whet her i n

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bert h or not , whet her i n f ree prat i que or not , whet her cust oms cl ear ed
or not . Busi ness hours are 0800 hours t o 1700 hours on weekdays, and
0800 hours t o noon on Sat ur days.
The vessel arr i ved of t he di scharge port on a Sat urday at 1345 hour and
t he Mast er t endered not i ce i mmedi at el y. The vessel bert hed at 1415
hours and commenced di scharge at 1500 hour s. Thereaf t er di scharge
progressed more or l ess cont i nuousl y (except f or meal breaks, shi f t i ng
al ong t he bert h, and occasi onal shor e crane repai rs) t hrough t o
compl et i on of di scharge on t he f ol l owi ng Fri day.
The St at ement of Fact s shows t hat t he port agent s accept ed t he not i ce
of readi ness on Sat urday at 1345 hours.

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Owners mai nt ai n t hat , i n accor dance wi t h Cl ause 7, l ayt i me commences
wi t h commencement of di scharge and t hat t i me act ual l y used duri ng t he
weekend count s as l ayt i me. Chart et er s mai nt ai n t hat , as per Cl ause 9,
no t i me count s as l ayt i me bef ore Tuesday 0800 hours, whet her t he
vessel was di schargi ng or not .
Prepare a wr i t t en submi ssi on of ei t her (A) Owner s or ( B) Chart erer s
case f or present at i on t o t he arbi t rat or ( your Course Tut or) appoi nt ed t o
resol ve t he di sput e. Expl ai n (1) why you bel i eve your Pri nci pal s poi nt
of vi ew i s corr ect and (2) why, i n your opi ni on, t he ot her si de i s wrong.
(NB. You wi l l not l ose any marks i f your Course Tut or di sagrees wi t h
your opi ni on. We merel y want t o gi ve you t he opport uni t y and pract i ces
of t hi nki ng about a t ypi cal di sput e, provi di ng a l ogi cal and wel l -
reasoned argument and expressi ng i t cl earl y i n wr i t i ng t he t ype of
act i vi t y shi ppi nt peopl e engaged i n dr y- cargo chart eri ng have t o do i n
t hei r ever yday work).
Sel f Assessment Questi ons
1. What t ypes of dr y cargo woul d an owner t ry t o avoi d even t hough
t hey are not act ual l y cl assi f i ed as Dangerous and why?
2. The Owner of a general cargo vessel negot i at es wi t h a Li ne
Operat or t o permi t t he carri age of any I MO Dangerous Goods up t o a
maxi mum of 1000 t onnes, except i ng Cl asses 1, 2, 6, 7 and 9. What t ype
of dangerous goods i s permi t t ed f or carri age?
Test Questi on
Toxi c Wast es have been much i n t he news i n recent mont hs. What are
t he probl ems associ at ed wi t h t he carri age of t oxi c wast es, and t o whom
shoul d shi powners l ook f or advi ce bef ore cont ract i ng t o carry such a

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cargo?
MOCK EXAMI NATI ON
DO NOT t urn t o t he next page unt i l you have f ol l owed t he suggest i ons
set out bel ow.
Over l eaf i s a sampl e exami nat i on paper. I n your own i nt er est do not
l ook at i t yet but i nst ead do t he same revi si on of t he course as you
woul d do f or any exami nat i on.
On compl et i ng your revi si on, put away your not es, have pens and
papers ready and set asi de t hree hours when you wi l l not be
i nt errupt ed, i n ot her words cr eat e as near as possi bl e exami nat i on room
condi t i ons.
Carr y out t he i nst ruct i ons on t he quest i on paper and send your answer s
t o your t ut or f or marki ng. (Not e your st art and f i ni sh t i me on t he f ront
answer paper).
Arbi trati on Cl ause
As t he advant ages whi ch i t i s bel i eved t he Terms wi l l of f er become
more wi del y known, part i es may wi sh t o consi der t he use of an
arbi t rat i on cl ause whi ch expressl y provi des f or t he proceedi ngs t o be
subj ect t o t he L. M. A. A. Terms. A suggest ed f orm of cl ause i s set out
bel ow. I t pr ovi des f or t he const i t ut i on of a t ri bunal i f t he part i es do no t
agree upon a sol e arbi t rat or. The cl ause can readi l y be modi f i ed i f t he
pref erence shoul d be f or a t ri bunal composed of t wo arbi t r at ors, wi t h
power t o appoi nt an umpi re i f t hey di sagree.

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Agreement upon a sol e arbi t rat or has obvi ous economi c at t ract i ons,
part i cul arl y i n t he case of arbi t rat i ons on document s or where t he
amount at st ake i s modest . I t woul d be i n t he part i es i nt er est normal l y t o
appoi nt persons who are U. K. Pr esi dent and t hus readi l y avai l abl e t o
part i ci pat e i n an arbi t rat i on t o be hel d i n London.

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L. M. A. A. ARBI TRATI ON CLAUSE
Al l di sput es or di f f erences ar i si ng under or i n connect i on wi t h t hi s
cont ract whi ch cannot be ami cabl y r esol ved shal l be ref erred t o
arbi t rat i on i n London. Unl ess t he part i es agree upon a sol e arbi t rat or,
one arbi t rat or shal l be appoi nt ed by each part y. I n t he case of and
arbi t rat i on on document s, i f t he t wo arbi t rat ors so appoi nt ed are i n
agreement t hei r deci si on shal l be f i nal . I n al l ot her cases t he arbi t rat ors
so appoi nt ed shal l appoi nt a t hi rd arbi t r at or and t he ref erence shal l be
t o t he t hree man t ri bunal t hus const i t ut ed.
I f ei t her of t he appoi nt ed arbi t rat ors ref uses t o act or i s i ncapabl e
of act i ng, t he part y who appoi nt ed hi m shal l appoi nt a new arbi t rat or i n
hi s pl ace. If one party fails to appoint an arbitrator, whether originally or by
way of substitution for two weeks after the other party, having appointed his
arbitrator, has (by telex or letter) called upon the defaulting party to make the
appointment, the President for the time being of the London Maritime
Arbitrators Association shall, upon application of the other party, appoint an
arbitrator on behalf of the defaulting party and that arbitrator shall have the
like powers to act in the reference and make an award (and, if the case so
requires, the like duty i n relation to the appointment of a third arbitrator) as if
he had been appointed in accordance with the terms of the agreement.
This contract is governed by English law and there shall apply t o al l
proceedi ngs under t hi s cl ause t he Terms of t he London Mar i t i me
Arbi t rat or s Associ at i on current at t he t i me when t he arbi t rat i on
proceedi ngs were commenced. Al l appoi nt ees shal l be members of t he
Associ at i on.

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EXAMI NATI ON PAPER SAMPLE PAPER
DRY CARGO CHARTERI NG COURSE
Ti me Al l owed Three hours
Answer any FI VE quest i ons. Al l quest i ons carry equal marks.
1. Your company has an obl i gat i on t o t ransport several cargoes
f rom t he Great Lakes t o Europe. Pr epare a proposal f or your
Board of Di rect or recommendi ng t i mechart er t o f ul f i l t hi s
commi t ment .
2. Consi der i n det ai l al l t he f act ors whi ch have t o be t aken i nt o
consi derat i on i n t he carri age of bagged ri ce.
3. Sel ect one of t he f ol l owi ng areas and wr i t e a market report of
about 35 words t o ei t her a Shi powner or t o a Chart erer (st at e
whi ch) : -
(a) US Gul f / Japan grai n
(b) Nort h Sea and Bal t i c Sea
(c) Paci f i c Coast of Sout h Ameri ca
(d) Aust ral asi a
4(a) From t he f ol l owi ng dat a f or t he bul k carri er MUSCOVY, whi ch
l oaded 73, 000 t onnes of coal i n bul k, cal cul at e l ayt i me and resul t i ng
demurrage or di spat ch :
- arri ved r oads Thursday 4t h 0300

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- bert hed 0500
- not i ce t endered and accept ed 0900
- commenced l oadi ng 0600
- compl et ed l oadi ng Monday 8t h 1600
- sai l ed 1700
Worki ng hours : 0600/ 1400 and 1400/ 2200 t hroughout
St oppages : Sat urday 6t h : 1300/ 1900 st ormy weat her
Sunday 7t h : 0700/ 1130 l oadi ng bel t breakdown
Monday 8t h : 1330/ 1400 dr af t check
Vessel f i xed on FI OT t erms wi t h rel evant cl auses readi ng : -
Ti me t o count f rom 1400 hours i f not i ce of readi ness t o l ead t endered
wi t hi n of f i ce hour bef ore noon and f rom 0600 hour s next wor ki ng day i f
not i ce t endered wi t hi n ordi nar y of f i ce hours af t er noon. I f l oadi ng
commences bef ore not i ce expi res, hal f such t i me used t o count as
l ayt i me.
Cargo t o be l oaded at an average rat e of 20, 000 t onnes per weat her
worki ng day of 24 consecut i ve hours, Sundays and hol i days i ncl usi ve.
Demurrage US $10, 000 dai l y/ hal f di spat ch on l ayt i me saved.
(b) Expl ai n t he si gni f i cance of t he l ayt i me cl ause except i ng t i me
count i ng f or any br eakdowns caused by reasons Beyond chart erer s
cont rol .
5. A cl ean bi l l of l adi ng i s of paramount i mport ance t o Shi ppers.
Di scuss.

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The Mast er of my SHELDUCK wi shes t o cl ause a bi l l of l adi ng i n
respect of rust i ng and i ndent at i on of st eel cargo brought f or ward f or
l oadi ng, but t he Shi ppers ask hi m t o l oad t he goods and l eave t he bi l l
cl ean, of f eri ng a l et t er of i ndemni t y hol di ng Mast er and Shi p owner s
harml ess i n case of cl ai ms brought agai nst t hem by Recei vers. Advi se
t he Mast er.
6. Anal yse t he basi c di vi si on of responsi bi l i t i es bet ween Shi p
owner s and Chart erers under a dr y-cargo t i me chart erpart y.
7. You are t he Di sponent Owner of t he OBO TEAL open i n
Bal t i more and descri bed as : -
- 66, 000 t onnes sdwt on 45 f t . sswd
- 2, 491, 000 cubi c f eet grai n
- f wa : 12 i nches
- t pi : 175
- const ant s : 500 t onnes
- 13 knot s on 45 t onnes I FO (180 c/ s) pl us 3 t onnes DO dai l y
l aden at sea 41 t onnes pl us 3 t onnes when i n bal l ast .
- port consumpt i on : 3 t onnes DO dai l y.
- dai l y hi re cost : US $10, 000
Your peri od t i mechart er of t he vessel i s comi ng t o an end, and i n order
t o redel i ver t o her Owners DOP saf e port UK/ CONTI NENT or i n
Chart erers opt i on, upon passi ng Cape Passero or Skaw west bound
you are consi deri ng t he f ol l owi ng cargo, whi ch you bel i eve you can f i x
as f ol l ows : -
- 50, 000 t onnes (5% mol oo) Green Del ayed Pet coke
(st owi ng maxi mum 47 cubi c f eet per t onne).
- Lake Char l es (40 f eet swsd)/ I skenderun

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- 15,000 tonnes shine load/10,000 tonnes shex discharge
- $15. 00 per t onne f i ot 5% t ot al commi ssi on.
Cal cul at e t he net t dai l y ret urn t hi s f i xi ng opport uni t y wi l l pr ovi de. You
wi l l need t he f ol l owi ng dat a : -
- Di st ances : Bal t i more/ Lake Char l es 1, 600 n mi l es
Lake Char l es/ I skenderun 6, 500 n mi l es
I skenderun/ Cape Passero 1, 000 n mi l es
- Bunkers : Remai ni ng on board at Bal t i more 500 I FO/ 75
DO Saf et y Sur pl us : al l ow 200 I FO and 30 DO
(do not charge t hese t o t he est i mat e)
Pri ces (del i vered) I FO DO
Remai ni ng on boar d $125 $125
Bal t i more 150 250
Lake Char l es 145 250
I skenderun 175 275
- Port cost s : Lake Char l es US #31, 000
I skenderun $39, 000
For t he purpose of t hi s cal cul at i on t he onl y draf t rest ri ct i on
appl i es at Lake Chari es : t he TEAL uses summer marks
t hroughout ; assume t he vessel i s cl eaned and ready t o l oad dry-
cargo and any i nf ormat i on not provi ded i s requi red.
8. The coast er WI DGEON arri ves at her l oadi ng port t he morni ng
bef ore l aydays commence, but her hol ds are prepared and her Mast er
t enders not i ce of hi s vessel s readi ness i n al l respect s t o l oad.
However, t he l oadi ng bert h i s occupi ed and t he Chart erers
represent at i ves ref use t o accept t he not i ce f or t he WI DGEON on t he

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basi s t hat t he Mast er i s not ent i t l ed t o t ender not i ce bef ore hi s vessel s
l aydays.
Advi se t he part i es.



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