CHARTER PARTIES: AN

INTRODUCTION

Presented By: Shivraj

Jadhav
MBA(ITL): 1803305017
WHAT IS A CHARTER PARTY?
 A Charter Party is a document of contract where the ship owner
agrees to lease and the charterer agrees to hire, the vessel, all the
cargo spaces or a part of it, on terms and conditions set out by the
Charter Party.

 In a charter party contract two parties are involved:

i. The ship owner.
ii. Charterer.

 The ship owner controls the navigation of the ship, whereas the
vessels carrying capacity is engaged by the charterer.

 If the terms of the Charter Party permit the Charter to do so, he

may enter into subcontracts with other shippers.
 TYPES OF CHARTER PARTIES:
1. Voyage Charter Party:
 Based on a specific single voyage.

 Freight is paid to the owner depending on the quantity of

cargo carried and the distance of transit.

 The ship owner and the charterer will also agree on a

number of terms such as the range of dates when the ship is
due to arrive ready to load the cargo, time the ship will take
to load and discharge the cargo.

 Charterer can also fix a series of same voyage with the

particular owner, known as ‘consecutive voyages’.
2. Time Charter Party:
 A contract for a specific period of time, may range from a
period of months to years.

 The charterer and the owner will agree on the terms such
as when and where will be delivered, how long the charter
will last, where the ship will be redelivered, range of
cargoes the ship may carry, range of countries the ship
may trade.

 More versatile than the voyage charter.

TIME CHARTER RESPONSIBILITIES
Ship owner Charterer
Crewing Employment
Repairs Bunkering
Maintenance and spares Port expenses
Classification Canal tolls
Surveys Stevedoring
Lubes Insurance of the cargo
Fresh water Insurance of bunkers
Insurance of vessel
Stores and provisions
3. Demise or Bareboat Charter Party:
 The charterer decides on what he wants in the whole ship,
without the involvement of the owner in running the ship.

 Charterer takes the responsibility of running the ship.

 Considered to be the owner of the ship for the purpose of

legal liability.

 The charterer pays for the supplies on the board the ship
and the maintenance of the ship.

 Ownership of the vessel passes on to the charterer on the

termination of the contract.
4. Contract of Affreightment:
 COA occurs when a carrier, enters in a contract to carry a
given quantity of cargo over several voyages

 Carrier can employ it’s own vessels or charter outside

vessels.

 Provides flexibility between the parties.

 Ship owner has a security of employment of his vessel.

 Advantageous for the charterer.

DIFFERENCE BETWEEN CHARTER PARTIES:
Voyage Charter Time Charter Demise Charter
Bunkers/Fuel Paid by owner Paid by charterer Paid by charterer
Loading/dischargi Paid by charterer Paid by charterer Paid by charterer
ng cost

Port costs Paid by owner Paid by charter Paid by charter

Canal charges Paid by owner Paid by charter Paid by charter
Crew employment Paid by owner Paid by owner Paid by charter
and costs

Insurance Paid by owner Paid by owner Can be paid by

either owner or
charterer
depending on
contract.
THANK YOU!