What is Ships Charter Party agreement ? - The Contract between one party who has control of a ship and another party who wishes to make use of the ship is known as a Charterparty.
-Types of Charterparty:
-Time Charter
-Time Charter
In a Time Charter the Owner hires the ship to the Charterer for a set period of time, usually with restrictions on trading limits and cargoes – so that the Owner’s interest is protected.
Time Charters can be for short (e.g. single voyages) or for long periods of time. Normally the Owner is paid a hire rate per day whilst the vessel is on charter, i.e. the Owner agrees to provide the vessel to the Charterer for his commercial use for an agreed period of time.
Time and vessel performance are key under time charter’s and of prime importance are meeting the C/P warranties with regard to speed and performance and to also avoid off-hire time as far as possible.
Details of the responsibilities of the Owner and Charterer under a T/C are as below:
Owner:
-Crew
-Stores & Provisions
-Maintenance
-Communications re ship
-Husbandry Fees
Owner:
-Crew
-Stores & Provisions
-Maintenance
-Communications re ship
-Husbandry Fees
Charterer:
-Fuel
-Port & Canal Dues
-Pilotage
-Towage/Linesmen
-Agency Fees (except husbandry)
-Communications re Voyage & Cargo
-Berth Dues (sometimes: see C/P)
-Wharfage (sometimes: see C/P)
-Stevedoring (sometimes: see C/P)
-War Risk Insurance
-Freight Tax
-Fuel
-Port & Canal Dues
-Pilotage
-Towage/Linesmen
-Agency Fees (except husbandry)
-Communications re Voyage & Cargo
-Berth Dues (sometimes: see C/P)
-Wharfage (sometimes: see C/P)
-Stevedoring (sometimes: see C/P)
-War Risk Insurance
-Freight Tax
Voyage Charter
In a voyage charter the ship is hired to carry a particular cargo (or a variety of cargoes) between specified places, usually either at a freight rate per MT of cargo carried or for lump sum freight to the Owner. i.e. The Owner agrees to provide the cargo carrying capacity of his vessel to the Charterer for a specific voyage(s).
In a voyage charter the ship is hired to carry a particular cargo (or a variety of cargoes) between specified places, usually either at a freight rate per MT of cargo carried or for lump sum freight to the Owner. i.e. The Owner agrees to provide the cargo carrying capacity of his vessel to the Charterer for a specific voyage(s).
The commercial operator will operate the vessel on a voyage charter and relay specific instructions from the Charterer to the Master. These instructions must be followed exactly, unless there is any safety or operational restrictions, in which case the commercial operator and/or DPA should be consulted immediately. Responsibilities of the Owner and Charterer under a V/C as below.
Owner:
-Ship
-Crew
-Stores & Provision
-Maintenance
-Communications
-Insurances
-Fuel
-Port & Canal Dues
-Agency Fees
-Towage/Linesmen
-Pilotage
-Berth Dues
-Wharfage
-Stevedoring
-Freight Tax (sometimes see C/P)
-War risk insurance
-Charterer
-Berth Dues (sometimes : see C/P)
-Wharfage (see C/P terms)
-Stevedores (see C/P terms)
-Cargo Dues/Freight Tax (see C/P)
-War risk insurance
-Ship
-Crew
-Stores & Provision
-Maintenance
-Communications
-Insurances
-Fuel
-Port & Canal Dues
-Agency Fees
-Towage/Linesmen
-Pilotage
-Berth Dues
-Wharfage
-Stevedoring
-Freight Tax (sometimes see C/P)
-War risk insurance
-Charterer
-Berth Dues (sometimes : see C/P)
-Wharfage (see C/P terms)
-Stevedores (see C/P terms)
-Cargo Dues/Freight Tax (see C/P)
-War risk insurance
Commercial awareness is knowing how to make the correct decisions to ensure that your vessel's commercial performance is optimal. In turn, this will boost the vessel's profitability significantly.
Contracts of Affreightment (COA)
Another type of contract is the COA. Under this contract the Owner agrees to provide his vessel or vessels to the Charterers for a series of voyages to carry a pre-specified amount of cargo, or to perform a pre-specified number of voyages. In this case the C/P terms will remain the same for each voyage with perhaps only the freight rates being adjusted for the prevailing market conditions.
Another type of contract is the COA. Under this contract the Owner agrees to provide his vessel or vessels to the Charterers for a series of voyages to carry a pre-specified amount of cargo, or to perform a pre-specified number of voyages. In this case the C/P terms will remain the same for each voyage with perhaps only the freight rates being adjusted for the prevailing market conditions.
Hierarchy of C/P’s:
The Master must be aware that there can be chains of charterers. Example:
-Owner to Head Charterer: (Time Charterer).
-Head Charterer to Sub Charterer: (Time Charter).
-Sub Charterer to Sub-Sub Charterer: (Time Charter or Voyage Charter).
If a voyage charter is involved then it will always be the last in the chain.
The Master must be aware that there can be chains of charterers. Example:
-Owner to Head Charterer: (Time Charterer).
-Head Charterer to Sub Charterer: (Time Charter).
-Sub Charterer to Sub-Sub Charterer: (Time Charter or Voyage Charter).
If a voyage charter is involved then it will always be the last in the chain.
The Master is to be guided by the head charterparty terms only and is advised that any subsequent sub charterparties received from charterers are to be used only for guidance.
Any conflicting clauses are to be brought immediately to the attention of his commercial operator.
This is also important because the Master will be required to sign for items such as Pilotage, tugs, canal dues, lashing material, etc., which although services supplied to the ship are, because of the Charterparties, a liability of one or other of the Charterers.
This is also important because the Master will be required to sign for items such as Pilotage, tugs, canal dues, lashing material, etc., which although services supplied to the ship are, because of the Charterparties, a liability of one or other of the Charterers.
The link below provides additional pages which contain somewhat larger lists of resources where you can find useful information:
-Dry Cargo Charterparties
-Tanker Time Charters
-Commercial Voyage Management
-Documentation & notices
-Function of bill of lading
-Port of refuge
-Seaworthiness for cargo ship, international navigational condition & procedure for Insurance claim
-Master's obligation to follow charterers routeing advise
-Dry Cargo Charterparties
-Tanker Time Charters
-Commercial Voyage Management
-Documentation & notices
-Function of bill of lading
-Port of refuge
-Seaworthiness for cargo ship, international navigational condition & procedure for Insurance claim
-Master's obligation to follow charterers routeing advise
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