MT1003 > Charterparties > Flashcards

Charterparties Flashcards

Lecture 6 (45 cards)

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1
Q

What are the 4 shipping markets?

A
  1. Freight Market
  2. Demolition market
  3. Sale & Purchase market
  4. New Building market
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2
Q

What are the impact on cash for the 4 shipping markets?

A
  1. Freight Market - cash inflow
  2. Demolition market - cash inflow
  3. Sale & Purchase market - Not change in cash
  4. New Building market - cash outflow
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3
Q

Who are the parties involved in the freight Market?

A
  1. Shipowner/charterer
  2. Cargo owner
  3. Ship broker
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4
Q

Capital costs

A

All costs to acquire the vessel, either new or second-hand

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5
Q

Operating costs

A
  1. Crews’ wages
  2. Insurance
  3. Ship maintenance, repairs, stores & supplies etc.
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6
Q

Voyage costs

A

Costs that are involved directly in a specific voyage.
1. Port costs - terminally handling charges, berthing charges, pilotage fees
2. Bunker costs - length of voyage and price of bunker

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7
Q

What is a charterparty

A

A charterparty is a contract for the use of the ship, concluded between the shipowner and the charterer

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8
Q

What are the 3 types of charter parties?

A
  1. Voyage Charter
  2. Time Charter
  3. Bareboat Charter
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9
Q

In a voyage charter, which stakeholder handles the 3 costs?

A
  1. Capital cost - owner
  2. operating cost - owner
  3. Voyage cost - owner/charterer
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10
Q

In a time charter, which stakeholder handles the 3 costs?

A
  1. Capital cost - owner
  2. Operating cost - owner
  3. Voyage cost - charterer
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11
Q

In a bareboat charter, which stakeholder handles the 3 costs?

A
  1. Capital cost - owner
  2. operating cost - charterer
  3. voyage cost - charterer
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12
Q

What is a voyage charter?

A

Shipowner contracts to carry a specific cargo in nature and volume from the port of loading to the port of discharge in a specific ship for a negotiated price per ton

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13
Q

What is the tolerance margin for cargo quantity in a voyage charter?

A

5% more or less

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14
Q

Dead freight

A

Dead freight is the freight amount for non-provided cargo by the charterers to the shipowner as agreed in the charterparty. This compensation offsets the lost revenue caused by unused cargo space. Protects shipowners from potential financial losses and ensures accountability in shipping contracts.

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15
Q

Lump Sum Freight

A

A payable amount regardless of amount of cargo transported

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16
Q

What has to be decided at the stage of charterparty negotiation in a voyage charter?

A

If the shipowner or charterer is responsible for cargo handling costs at both loading and discharging ports

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17
Q

Lay Days

A

Period of specific days during which S/O must present the vessel for loading

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18
Q

Lay Can

A

The final lay day which, if the chartered vessel has not been presented for loading, the charterers may reject and cancel the charter

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19
Q

Lay Time

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A

Period allowed to Charterers for loading and/or discharging without additional freight payment.

20
Q

Demurrage

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A

Money payable to S/O for delay in loading/discharging beyond the lay time

21
Q

Despatch

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A

Money payable to Charterer if ship is loaded/discharged in less than lay time

22
Q

What is a Consecutive Voyage Charter?

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A

Special variation of voyage charter where the vessel is contracted for several voyages which follow consecutive upon one another

23
Q

What are the 2 characteristics of a CVC?

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A
  1. It must be a named ship
  2. Proceeds from loading port to discharging port and to return in ballast and repeat the voyage
24
Q

What is a contract of affreightment?

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A

S/O contracts to carry regular quantities of a specific cargo on a particular route over a given period of time using ships of his choice within specific restrictions. S/O is allowed to arrange backhaul cargoes to improve utilisation.

25
What is a time charter?
An agreement between S/O and charterer to hire the ship, complete with crew, operated by the shipowner under instructions from the charterer, for a fee per day, month or year
26
Trip time charter
Takes the vessel from one place to another exactly under voyage charter but here charterer is paying per day, instead of freight per ton
27
Round voyage time charter
Usually occurs where the delivery and re-delivery of the vessel will take place in the same geographical area
28
What is a bareboat charter?
Charterer has full operational control of the ship. Ship is provided bare with the hull and engine without any crew.
29
Advance freight
Part or whole of the freight is prepaid to protect the right of the S/O. Cannot recover amount from S/O even if cargo is lost
30
Always accessible
Charterer guarantees the provision of available loading or discharging berth upon ship's arrival at the port, which the ship can reach safely without delay. Same goes for leaving the Berth safely and promptly.
31
AWRI
Additional War Risk Insurance. Extra amount paid by time charterer to S/O if charterer wish to direct ship in a port or area where military hostilities take place and ship's insurers require additional premium to cover the corresponding war risk.
32
APS
Arrival Pilot Station. Location used as the place of delivery of a ship by the S/O to the charterer at the commencement of a time charter
33
Ballast Bonus
Lump Sum amount paid to S/O as a Bonus compensating him for the Ballast trip carried out by the ship from the last Port of call or the last Port of the previous charter to the next Port where the next charter begins. Represents cost of fuel and time spent to reach Port of next charter.
34
DHD
Demurrage Half Despatch. Used in voyage charter negotiations - despatch money to be paid at half the daily rate of demurrage
35
FD
Free of Despatch. No despatch amount is to be paid even if cargo-handling operations finished earlier than allowed time.
36
FIO
Free In and Out. All cargo handling costs are carried out by the charterer. Used in voyage charter.
37
MOLCHOPT
More or less in charterer's option. Option allowed to a voyage charterer to load up to a certain quantity, normally expressed as a percentage or a number of tons, over or under quantity specified in the charter party.
38
NOR
Notice of Readiness. Clause in a voyage charter that the S/O or Master must advice the charterer when ship has arrived and is ready to load/discharge for playtime to start.
39
Off Hire
When Time charterer is deprived the use of a ship through no fault of his own. Hire money temporarily ceases to be paid.
40
Paramount Clause
Clause in B/L or C/P which stipulates that the contract of carriage is governed by Hague Rules or Hague-Visby Rules
41
SHEX
Sunday holidays Excluded from laytime
42
SHINC
Sunday holidays included in laytime
43
WIBON
Whether in Berth or Not. If the designated loading or discharging berth isn't available upon arrival, the ship, upon reaching any usual waiting place at the Port, is entitled to Tender NOR from it and laytime commences per the charterparty
44
WWD
Weather Working day. A working day or part thereof during which cargo operations can proceed without weather interruptions. If work is stopped due to weather, the stopped duration to a 24h period is added to the end of the laytime
45
WWR
When Where Ready. Refers to the determination of the time and place re-delivery of the ship by the charterer to the shipowner
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