Transcript 5- Chartering

Chartering
Chartering party :
• Ship owner
• Charterer – cargo owner/transport operator/any person
Chartering Types
Voyage Charter/Time charter/Bareboat charter
Shipbroker : as a third party and middle man
Chartering
Voyage Charter
• Single voyage – from one port to another port
• Shipowner to bear all running expenses
• Crew and master – provide by the shipowner
• Laytime (time to spend at port for loading/discharge)
• Laycan 20th/25th
• Carrier = shipowner
Chartering
Time Charter
• Can range from one month to years
• Shipowner to bear all running expenses and recruitment of
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crew and master
Crew and master – provide by the shipowner
Cargo capacity – control by charterer not shipowner
Carrier = shipowner or charterer
On/off hire survey : to ascertain condition of the vessel
Chartering
Bareboat Charter
• Shipowner gives up all management and control
• Charterer – responsible for managing/running of the crew
• Shipowner receive fixed rate of hire
• Common for financial institutions for ship finance
• Survey and docking – agreed beforehand to ascertain ship
conditions
• Option to purchase
• Charterer as carrier
Chartering
Contract of Affreightment
• Given quantity over a fixed period of time
• No specific vessel is nominated
• Freehand for ship owner to manage his fleet
Chartering
Standard Form of chartering
General characteristics
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Approved by recognized international organizations
Test in court – terms clearly defined and udnerstood
Additional inserts
Chartering
Baltic Exchange
Long history : 250 years already dated back to early 1700’s
Only international self-regulated broking market
Air brokers – Baltic Air Charter Association 1949
Freight Index : BFI – Baltic Freight Index
Chartering
Ship Broker
May work as shipowner broker/charterer agent/competitive
brokers
Duties : link with the market
a) Owner broker : to ensure all charterers know the details of his
Vessel
b) Charter Agent : to ensure all shipowner to aware of his need for a ship
c) Post fixture department : resolve disputes between owner and
charterers and to eliminate the need to resort to arbitration/courts
d) Research Department : latest development in the market
Chartering
Ship Broker
Commission
Agreed % of the freight to be paid
Usually 1.25% for all brokers involved in the transaction by the owner or
1% to an exclusive broker
Address commission – paid to the charterer to cover cost of managing the
ship while it is on charter – 1.25% to 2.5%