Voyage Charter

Voyage Charter

5/20/15 16:15

I. Definition and features of tramp vessel 1. Definition - Tramp vessel carries the goods among 2 or many oceans ports depend on the demand of the cargo owner. The carriage is based on a transport contract. 2. Features - Tramp vessel sail only when there is a sufficient quantity of cargo on board; they do not operate on a fixed sailing schedule. - These vessels generally carry cargo in bulk, such as coal, grain, timber, sugar, ore, fertilizer, cement clinker, copra, bauxite and phosphates - Tramp vessel’s speed is relatively slower than liner’s one - Carriage, freight, loading and discharging expense conditions are clearly prescribed in the contract of carriage II. Voyage Charter Party 1. Definition - The charter party is the written agreement between the ship owner and the charterer and is in fact the enactment (or charter) of their negotiations that contains the agreed terms and conditions. 2. Standard forms - Recommended charter parties offer numerous advantages: • they are used commonly; • they are suited for several traffics and are everywhere available; • their wordings is nearly watertight and they are generally accepted by the courts; • they are without any doubt fair to both parties. - Uniform standard forms: GENCON, NUVOY, SCANCON… - Specific standard forms: NORGRAIN, CEMENCO, CUBARSUGAR, RUSSWOOD, EXONVOY, MOBILVOY, SHELLVOY… 3. Content of voyage charter party 3.1. Introduction • the name and the address of the contracting parties • the name and a short description of the ship

• • • • •

the the the the the

position of the ship date the ship expected to load loading and charging ports or places cargo freight

3.2. Vessel clause • name of the ship: “Ship named Hope and/or substitute sister ship” • age of the vessel • flag • type of ship • speed of the ship • classification society and the class • length and breadth • draft 3.3. Expected ready to load - The date on which the ship must be ready to start loading must be indicated in the contract. • On Nov 25, 2009, the named ship must be ready to start loading at the loading port • On about Nov 25, 2009, the named ship must be ready to start loading at the loading port => Anyway, the ship owner (or the operator) must keep the charterer (or his broker) informed (via tel, fax, telex, email) of the arrival the ship in the first (or only) port of loading. (Notice of arrival- NOA) - Canceling date: the latest date on which the vessel must be ready to load at the port. 3.4. Cargo - Name of cargo: • Clearly states the name of cargo • And/or: 1000 MT rice and/or maize • And/or any lawful goods - Packing: types of packing, marks and numbers - Quantity:

• •

X metric tons About X metric tons: o 5% more or less in Owners’ option (moloo) o 5% more or less in charterers’ option (molco) o 5% more or less in Master’s option (molmo) -> most common

3.5. Port of loading, port of discharge • A fixed berth, e.g.: berth 2 at Haiphong port • A fixed port: one safe port La Havre • A fixed area : one safe port/ one safe berth Australia/one good/safe port Northern range • A port or an area to be indicated later: US gulf for order • Several ports: berth 1 at Fort the France and one safe berth at port of Spain => Anyway, the loading and discharging ports in the charter party must be safe ones in terms of both of nautical and political features. • There is no nautical and political obstacles to reach the port/berth with a loaded ship “at all times of the tide always afloat” “Not always afloat but safely aground (NAABSA)” Note: “… or so near thereto as she may safely get and lie always afloat…” 3.6. Freight and charge - Freight in the ordinary mercantile sense, is the reward payable to the carrier for the carriage and arrival of the goods in a merchantable condition, ready to be delivered to the merchant”. - Freight rate: the freight per unit of cargo - Freight unit: weight (heavy goods), volume/ measurement (light goods) - Quantity: • On taken quantity • Delivery quantity - Time to pay: • In advance: Freight Prepaid/ Freight payable at Loading port • Freight to Collect: o Freight payable on commencement of discharge o Freight payable concurrent with discharge

o Freight payable on completion of discharge o Freight payable on actual and proper completion of discharge 3.7. Loading/Discharging expense - Liner term/ Gross term/ berth terms - Free In and Out (FIO): exempt the carrier from the loading and discharging expenses, the charterer will bear these costs- FIOST - FI: exempt the carrier from the loading cost, but he should bear the discharging cost. The charterer’s liability is in contrast to the carrier’s one. - FO => Those above terms and conditions about Loading/discharging expense should accompanied by the freight rate in the charter party. => The most important things is during negotiation, the charterer should choose the most suitable Loading/discharging expense condition so that: • he can avoid to pay double Loading/discharging expenses for the carrier and the shipper • he can save foreign exchange • he may create favorable conditions for Loading/discharging the cargo 3.8. Laydays/Laytime - Is the time, which according to the charter party, is allowed for the loading and discharging of the cargo (the allowed time) - Manners: • according to a fixed number of days/hours which are necessary for the loading and/or discharging operations • without a fixed number of days/hours (with customary dispatch, customary quick dispatch, as fast as the vessel can receive, etc.) • according to a quantity to be loaded or discharged - Unit expressions • Running days/consecutive days/days • Working days • Working days of 24 consecutive hours • Weather working days • Sundays and holidays

o 15 WWD, S.H. EX, U.U (Cargo to be loaded in 15 weather working days of 24 consecutive hours, Sundays and holidays excepted, unless used) o 15 WWD, S.H. EX, E.U (Cargo to be loaded in 15 weather working days of 24 consecutive hours, Sundays and holidays excepted, even if used) - The laytime starts from the moment that the NOR is tendered and accepted by the charterer, unless the charter party stipulates differently. - Before accepting the NOR, the cargo owner should check: • The ship must have arrived at her loading/discharging berth as indicated in the charter party • The ship must in all respects be ready to load or discharge • the ship is in order with all formalities such as custom formalities, quarantine formalities, etc. - Note: “W, W, W, W” • WIPON: Whether in Port or not • WIBON: Whether in Berth or not • WIFON: Whether in Free Pratique or not • WICON: Whether in Custom Cleared or not - GENCON standard form: • The laytime starts from 1p.m if the NOR is tendered in office hour before 12a.m • The laytime starts from 6 a.m of the next day if the NOR is tendered in office hour after 12a.m • Excluded time starts from 1p.m of Saturday or of the working day before holiday to 7a.m of the next Monday or the day after the holiday. 3.9. Demurrage/ Dispatch - Demurrage • If the ship needs more time to load or discharge than foreseen by the laydays, then the ship will be in days of demurrage. The Charterer will have to pay for this a certain compensations to the ship owner called demurrage. • “Once on demurrage, always on demurrage” • Demurrage rate = 2 X dispatch rate

-

-

-

• Demurrage money = demurrage time X demurrage rate Dispatch • Dispatch money is a compensation which the ship owner must pay to the charterer when the ship is loaded and/or discharged more rapidly than provided by the laydays that were foreseen. • “Dispatch money for all time saved” • “Dispatch money for all working time saved” • Dispatch = 1/2 X demurrage rate • Dispatch money = Dispatch time X Dispatch rate Calculation of demurrage/ dispatch money • Mutually complement • Individually complement Statement of facts Time sheet: • Date and hour of arrival in the roads or in the port • Date and hour of arrival in the loading or discharging place • Date and hour on which the ship is ready in all respects to start loading or discharging, as stated in the NOR • Date and hour on which the NOR was tendered • Date and hour on which the NOR is accepted by charterer, receiver or his agent • Date and hour on which, according to the charter,, the laydays started • Loading and discharging speed according to charter party • Statement of days, which could not be worked • Statement of the time allowed for loading and discharging • Date and hour on which the loading/discharging was terminated

3.10. Carrier/ship owner’s responsibility and exceptions - Responsibilities: • To make the vessel in all respects seaworthy by due diligence • Secure that the vessel is properly manned, equipped, and supplied • Issue B/L after receiving the goods • Guide for loading and discharging the shipment • Liable for loss, damage or delay in delivery of the goods caused by nautical fault

Control the vessel with proper speed, avoid deviation unless in case of force majeure. - Exceptions: • Act of God • Perils of the sea • Force majeure • Hostile activities •

3.11. Arbitration and Law - Arbitration is a kind of private court assigned by both parties in the contract. They obey all of its rules spontaneously. - All disputes arisen out of the charter party may be solved and addressed only if there is an arbitration negotiation in advance or an arbitration clause in the charter party. - Requirements for An arbitration negotiation/clause: • Full and correct name of arbitration organizations • Procedural law/rule to deal with the matter • Place and Language for judging, number of arbitrators - Sample of arbitration clause: • “All disputes arising out of or in relation to this contract shall be finally settled by the Vietnam International Arbitration Center at the Vietnam Chamber of Commerce and Industry in accordance with its Arbitration Rules” 3.12. Both to Blame Collision 3.13. General Average and New Jason Clause