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COMMERCIAL DOCUMENTATION

CHARTERING

Chartering

Chartering is hiring a ship to carry cargo for freight. The Charter Party is a contract between the Shipowner and the Charterer. Such a contract contains a number of clauses concerned a future employment. For example, requirements to a vessel, period of a contract and responsibilities of the contracting parties. They may be different because there are several principal methods of chartering a tramp ship.

The Voyage Charter. A ship is employed for a one-way voyage between specified ports with a specified cargo. The charterer provides the cargo for loading within an agreed period of time. At the same time the owner is responsible for the vessel’s preparations for loading and the voyage. After the cargo has been transported to the port of destination the vessel is free. The freight rate is paid per ton of cargo delivered or so called lump sum when payment for transportation of goods is fixed as a whole for a consignment but not for a cargo unit.

The Time Charter. The charterer undertakes to hire a ship for a stated period of time or for a round trip voyage¹. Charterer uses the vessel like it is his own one, however, there are some clauses about a cargo and ports of loading. The freight rate is paid per ton deadweight per month. Shipowner is fully responsible for the ship.

The Bare Boat Charter. This method of chartering is less used in commercial practice. The Shipowner delivers his ship to the Charterer for an agreed period of time without crew, stores, insurance. The Charterer is responsible for running the ship as if it were his own for the period of contract.

The Contract Charter (Contract of affreightment). This method is used if it is necessary to ship a large amount of cargo – too much for a single ship. The Shipowner agrees to undertake the shipment over a given period at a fixed price per ton of cargo but not necessarily by any specified vessel.

Freight is the remuneration payable to the Carrier for the carriage of the goods and paid under a voyage Charter Party, whereby the Charterer is concerned with the carriage of the goods and not the use of the ship itself.

When there is no provision to the contrary, freight is payable on the delivery of the goods and is calculated on the amount actually delivered. Sometimes, however, the parties agree that a lump sum freight shall be paid irrespective of the amount of cargo carried. A frequent provision is that freight is to be paid in advance. In certain cases a pro rata freight is payable. If the Consignee does not take delivery of the goods, the Shipowner may be entitled to a back freight. If a Charterer does not load a full cargo, damages for deadfreight may be claimed.

Types of freight. Lumpsum freight is an agreed amount of freight on a lumpsum basis for the use of the vessel to carry a particular cargo on a given stated voyage. When such freight payment is payable on delivery of the cargo at destination it is not necessary that the whole of the cargo should be delivered to entitle the Carrier to payment of the entire freight.

Advance freight or pre-paid freight is preferable with liner shipments. In many voyage charters, part of the freight may be payable in advance and in circumstances where the cargo may be lost during the course of the voyage, the freight so advanced is not recoverable by the shipper. Advance freight is at the risk of the person who makes the advance and is not returnable in the event that the cargo is not delivered in its entirety at the port of destination.

Deadfreight is paid when the Charterer has failed to load the vessel with a full and complete cargo within the terms of the contract.

There may be a number of reasons during the course of a voyage whereby the cargo on board a particular vessel cannot be delivered at the destination and has to be returned back to Shipper in respect of which the Shipowner is fully entitled to charge back freight for the return carriage of those goods.

Memorize!

to hire a ship to provide cargo lump sum to fix payment as a whole to undertake remuneration payable whereby to be concerned with to the contrary to calculate freight irrespective provision to be entitled to to claim deadfreight entire freight preferable circumstances recoverable returnable entirety full and complete cargo in respect of to charge freight to enter into a contract lawful merchandise to have a lien upon to earn money at the Charterer’s disposal dispute to make C/P to conclude C/P subject to these provisions to accept a vessel mutually agreed to warrant to set forth extension to apply amount value of the goods to take into consideration extra expenses

The shipowner or charterer or whoever enters into a contract with the shipper for the transportation of merchandise.

Time Charter Party

“This charter party is made and concluded in New York the first of October 19….between Marine Carriers Corporation, of New York, owners of the good American steamship Trident, and Neptune Shipping Company, of Philadelphia, Pennsylvania, charterers of the said steamship (which is described as being of the highest class at the American Bureau of Shipping, of 9,070 tons gross register, 6,133 tons net register, and 13,498 tons of deadweight capacity on summer freeboard, with a speed of twenty knots on seventy five tons of best grade fuel per day), now in service and trading.

It is agreed that the vessel is tight, staunch and strong and in every way fitted for the contemplated service. She is to be delivered to the charterers in New York, and redelivered to the owners in a safe United States Atlantic port north of Cape Hatteras, but not east of New York. The vessel is able to carry lawful merchandise except explosives, ammunition, mahogany logs, asphalt in bulk, and livestock, within the limits of the marine underwriters’ insurance policy, subject to these provisions.

1. The owners shall provide and pay for all provisions, wages and consular shipping and discharging fees of the crew; shall pay for the insurance of the vessel, and for all cabin, deck, engine room, and other necessary stores including boiler water, and shall maintain her class, and keep the vessel in a thoroughly efficient state in hull, machinery, and equipment for and during the life of the charter party.

2. The charterers shall provide and pay for all the fuel except that used for cooking, port charges, pilotage, agency commission, consular charges (except those pertaining to the crew) and all other usual expenses. If the vessel shall put into a port for causes for which the ship is responsible, all port charges shall be paid by the owner.

3. The charterers shall pay for the use and hire of the vessel at the rate of Twelve Dollars and Twenty Cents, United States currency, per ton (of the vessel’s total deadweight carrying capacity) per calendar month. Payment of this hire shall be semimonthly in advance.

4. The whole reach of the vessel’s holds, decks, and usual places loading shall be at the charterers’ disposal.

5. The master shall prosecute his voyages the utmost despatch, and his vessel logs shall be shown to the charterers on demand. The master shall be diligent in caring for the cargo.

6. Should the vessel lose any time through deficiency of men and stores, fire, breakdown or damage to the hull, machinery, or equipment, grounding, or drydocking for purposes of examining or painting the bottom, the payment for hire shall cease for the time thus lost.

7. The owners shall have a lien upon all cargoes for any amounts due under this charter, and the charterer shall have a lien on the ship for all monies paid in advance and not earned.

8. The vessel is to work day and night, as required by the charterers, and all winches are to be at the charterers’ disposal during loading and discharging.

9. Should any dispute arise between the owners and the charterers, the matter is to be referred to three persons in New York for arbitration.

10. A commission of 2 ½ % is payable to the brokers on the hire earned and paid under this charter.

By authority of:

Marine Carriers Corporation,

Jones&Monroe, brokers.

The original charter party is in our possession.

Jones&Monroe, brokers”.

Read Time Charter Party and translate the following sentences into English:

1. Пароход «Трайдент» в настоящее время находится в эксплуатации на коммерческих перевозках.

2. Настоящим согласовано, что означенное судно должно быть водонепроницаемым, остойчивым и во всех отношениях пригодным к обусловленным перевозкам.

3. Судно должно быть приспособлено для перевозки законных грузов в пределах района, обусловленного полисом морского страхования.

4. Судовладельцы обязаны обеспечить оплату заработной платы и питание экипажа, консульских сборов по перевозке и увольнению судовой команды.

5. Если судно вынуждено зайти в порт и это вызвано виной судна, то все портовые расходы оплачивает судовладелец.

6. Судовладельцы должны иметь залоговое право на все принадлежащие фрахтователю грузы на любую сумму, причитающуюся по условиям настоящего чартера.

7. Фрахтователи должны иметь залоговое право на судно в обеспечение сумм, уплаченных авансом, но не отработанных судном.

8. Комиссия, причитающаяся брокерам, уплачивается в размере 2.5% от суммы арендной платы, полученной и уплаченной по настоящему чартеру.

9. Судно должно быть передано фрахтователям в Нью–Йорке и сдано обратно судовладельцам в любом безопасном порту на Атлантическом побережье США.

10. Капитан обязан осуществлять все рейсы с наибольшей скоростью и представлять фрахтователю судовые журналы для просмотра по его требованию.

11. Оригинал чартер-партии находится в нашем владении.

Speak about:

1. The contracting parties to the above charter party.

2. The ship chartered.

3. Owners’ obligations and rights.

4. Charterers’ obligations and rights.

5. Master’s responsibilities.

6. What is to be done in case of disputes between the owners and charterers.

7. Brokerage.

TANKER TIME CHARTER PARTY (extracts for reading)

IT IS THIS DAY MUTUALLY AGREED between_____________, as owner ("Owner") of the m/t___________, as more fully described and warranted herein ("Vessel"), and _________(head charterers: Standard Tankers Bahamas Limited), as charterer ("Charterer"), that Owner lets and Charterer hires the use and services of the Vessel for the carriage of Crude and/or dirty petroleum products and/or condensates and/or clean petroleum products in bulk and such other lawful merchandise as may be suitable for a vessel of her description, for the term and on the terms and conditions hereinafter set forth in this time charter party ("Charter").

Firm Period

The term of the Charter shall be for a period of about one (1) year ("Firm Period") plus any extensions thereof as provided in Clause …. and Clause…. The Firm Period shall commence at the time when the Vessel is placed at Charterer's disposal as provided in Clause Error: Reference source not found. The word "about," as used in Clause , shall mean up to thirty (30) days more or less, at Charterer's option, and shall apply to the term of the Charter consisting of the Firm Period plus any optional periods or extensions as provided in Clause ….and/or Clause…. The term of the Charter, as stipulated in Clause…., shall hereinafter be referred to as ("Charter Term").