CHARTERING

INTRODUCTION
Vessels plying on a regular scheduled service between group of ports and subsequently container vessels / passenger vessels are termed as Liners. Vessels not operating on a fixed sailing schedules were termed as tramp as they trade all parts of the world in search of cargo. The contract of carriage of goods by sea in tramp ships is usually contained in a document called the CHARTER PARTY.

PARTIES INVOLVED
A] One owns and operate a ship owner or carrier. B] The owner of cargo The Shipper C] The negotiater between the above two parties The ship broker D] The person who charter the vessel from the owner (some cases shipper themselves) is called the Charterer

CONTRACT OF AFFREIGHTMENT/ CHARTER PARTY

COA is an agreement by a ship owner to carry goods by water or to furnish a ship for the purpose of so carrying goods in return for a sum of money called freight or hire. C/P is a contract whereby a ship owner agrees to place a ship or part of it at the disposal of a merchant or other person (known as charterer) for the carriage of goods from one port or ports to another port or ports on being paid freight or to let his ship for a specified period, the remuneration then being known as hire. The terms, conditions and exceptions under which the goods are carried are set out in the charter party. After the goods are shipped a Bill of Lading is issued which serves as a receipt by the ship owner.

COMPARISON
LINER Regular service between nominated ports Freight rates in accordance with tariff Regulated by individual liner companies B/Note, DTR and B/L Loading and unloading arranged and paid by the ship owner.

TRAMP Operating in open market seeking cargo wherever available Freight rates negotiated by ship owner and charterer. Chartering market governed by law of supply and demand C/P B/L issued pursuant to a C/P. Loading and discharging arranged and paid by the ship owner/charterers as per the terms of the charter party.

TYPES OF CHARTER PARTIES A] DEMISE OR BAREBOAT CHARTER B] NON DEMISE CHARTER Demise The ship owner puts at the disposal of the charterer merely the ship for a specific period of time normally a longer period. The charterer appoints and pays the wages to the Master, officers and crew. Charterer provides the cargo and meet all expenses of technical/admin and operational nature. Non Demise The ship owner provides the ship and the crew while the charterer provides the cargo.

comparison
Time Charter Ship hired for an agreed period or agreed tripa on time basis. Consideration charter hire payable per day or 15 days or calender month. Used for full load in tramp trade or in liner trade. Ship goes off hire during gear break down or engine failure. Voyage charter Carry cargo from one port to another port. Consideration freight per TON cargo carried or lumpsum freight. Usually for full load. Time allowed for loading / unloading is called laytime. Extension of time allowed incur demurrage and pre completion is entitled for despatch. All charges like port charges, canal dues and all risk of voyage delays are bornby the ship owner.

SHIP TONNAGE/LOAD LINE DIMENSION & CARGO

Ships and markets The division of commercial ships can broadly be made as follows: * passenger liners, ferries * container * general cargo * bulk carriers * tankers * car carriers * specialised, eg dredgers, cable and pipe layers, heavy lift, tugs, tenders * semi-submersible

Crude Oil Tanker: British Spirit Official No: 703252: Built: 1983. Tonnage: 66,024 gross; 36,229 net; 127,778 dwt Length: 260.99m Breadth: 39.65m Draft: 16.22m
Bulk Carrier: Iron Newcastle: Official No: 851596. Built 1985. DWT: 148,140Mt. Length 283.5m, Breath: 47.07m, Draft 15.901m

Liquefied Natural Gas Carrier: NorthWest Sanderling Official No: 853416 Built: 1989. Length: 272m, Breath: 47.2m, Draft: 10.95m, LNG Capacity : 125,000 cubic metres Container Ship: OOCL Longbeach: IMO No: 9243409. Built 2003. GRT 89,097. Length: 322.97m, Breath: 42.80m, Draft: 14.528m. Container Capacity: 8,063 teu.

General cargo ship: Iron Flinders Official N0: 854086. Built: 1985 Gross tonnage: 13,380. DWT: 17,373Mt. Length: 158.07m, Breath: 23.09m, Draft 10.102m. Container Capacity 928 TEU.

Parts and Directions of a Ship Parts ahead bow forward port < beam > starboard amidships aft astern stern

 draught, load line marks and freeboard

The draught is the actual depth of the submerged part of the hull below the waterline to the lowest part of the hull. Draught marks are engraved and painted at the bow and the stern. They are important to check during loading to assist with balance and trim.

Through the advocacy for reform of a 19th centuryBritish politician, Samuel Plimsoll, the marking on the ship of the safe maximum loading grew up:the Plimsoll line. The Pimsoll line is painted through a circle called the load line disk (seediagram below). There is now an internationalconvention on load linesBecause weather and seas vary according to placeand season, the amount of freeboard (distancefrom waterline to the vessels uppermost complete water-tight deck) varies. Amidships there is marked on each side the position of the uppermost watertight deck

TF tropical fresh F fresh T tropical S summer W winter WNA winter North Atlantic

TF F L R T S W WNA

VOYAGE CHARTER Ship name and particulars viz dwt,dft,yr of built, flag no.of ho/ha,cargo gear SWL

TIME CHARTER

Ship name and particulars viz dwt,dft,yr of built, flag no.of ho/ha,cargo gear SWL, speed and bunker consumption. Cargo and qty with 5T/C period or one time 10% MOLOO/chopt charter trip (tct) or round voyage Loading and discharging Places or areas /range ports, berth and of ports for delivery and anchorages redly

Lay days and cancelling Lay days for delivery (laycan) for presenting and redelivery the ship ready for loading
Loading and discharge rates eg.4 running days for loading and 3000mt per wwdshex for disch Demurrage and despatch terms Freight rates and terms of payment Geographical and trading exclusions if any specified. Quantity/quality of bunker on Dly/redly Charter hire rate and terms of payment

Charter party form e.g ferticon/gencon

Total commission (totcom) including address commission

c/p form eg.Baltime

Total commission (totcom) including address commission

Subjects if any i.e. cargo Subjects as may be availability in the given specified e.g.owners lay days management approval of charterers

TYPE PERIOD

BAREBOAT USUALLY LONG USD / DAY

TIME LONG/MED TRIP USD / DAY

VOYAGE ONE OR MORE VOYAGE USD PER TON

HOW PAID

INFO ON SHIP

CONSIDERAB LE SHIP DETAILS

CHARTERS

SHIP DETAILS LAY TIME / BUNKER LOAD DISCH CONSUMPTION RATE

CHARTERERS SHIP OWNERS

PROBLEMS

FORMS

SPECIFIC

STANDARD BUT CLAUSES NEGO

STD BUT CLAUSES NEGO

WHEN TO USE

OFTEN FINANCING SHIP OWNERS USE BEFORE MARKET DOWN OWNER PAYS CAPITAL COST AND CHT PAYS DAILY RUNNING COST + VOY COST OWNER PAYS CAPITAL COST AND DAILY RUNNING COST AND CHT PAYS VOY COST + HIRE

SHIP OWNERS USE ON RISING MARKET OWNER PAYS CAPITAL COST AND DAILY RUNNING COST / VOY COST AND CHARTERER PAYS LOADING/DISC H COST + FREIGHT.

COSTS

ETHICS IN CHARTERING
DEALING WITH STRANGERS GUARD AGAINST MALPRACTICES DEAL WITH REPUTED COMPANIES CLEAN FINANCIAL RECORD AND PROFESSIONAL COMPETENCE. PROFESSIONALISM AND SACRED TRUST- A FIDUCIARY DUTY. UPHOLDING HONESTY AND INTEGRITY. DO AS YOU WOULD BE DONE BY CHANNEL OF COMMUNICATION WORKING WITHIN ONES WARRANTY OF AUTHORITY.
DO NO HARM.