2. The Chartering process

Question 1

Standart charter party types?

Answer 1

GENCON 
OREVOY
COALCOY
AUSTWHEAT
for voyage chartering

NYPE
BALTIME
for time chartering

VOLCOA
for contracts of affreightment

BARECON
for bareboat chartering

Question 2

Most common categories of the business brokers specialize in?

Answer 2

The owner’s broker - appointed by owners to secure charters for their tonnage.

The Charterer’s broker - Act under instruction from the charterer.

The intermediate Broker - Neither owners’ nor charterers.

The sale&purchase broker - requires knowledge of ships tehnical and classification as well broader base of ships’ valuation.
Represents one party.

Question 3

Usual commission of the Sale&Purchase?

Answer 3

Usually approx. 1 percent.

Question 4

Broker’s role?

Answer 4

Match orders with positions and maintain a database of ships, positions and orders.

Monitor list of open cargoes (orders) and open tonnage (positions)

Consolidate market intelligence

Handle and assist communications

Draw up the charter party agreement

Deal with amendments

Deal with financial transactions

Question 5

Laytime?

Answer 5

Owner gives to the charterer a specific time which is period of time allowed in a voyage charter for the loading and unloading of cargo.

Question 6

Demurrage?

Answer 6

Charterer must pay damages to the owner in the form of demurrage at a negotiated sum per day in case if the charterer fails to load or discharge the cargo in the given period of laytime.

Question 7

Dispatch?

Answer 7

Form of reward to the charterer by owner for completing cargo operations earlier than laytime.

Question 8

NOR - Notice of Readiness

Answer 8

The point in time when laytime starts.

NOR informs the chartere that the ship has arrived at the port and is ready to load or discharge.

Question 9

2 types of contract for the carriage of goods by sea?

Answer 9

1. A contract evidenced by bill of lading.
2. Charter party

Although different things ship carrying cargo is often running under both.

Question 10

Bill of Lading?

Answer 10

Contract between a carrier and a shipper.

Question 11

Functions of Bill of Lading?

Answer 11

It is a receipt of the cargo shipped.

Receipt for the quantity of goods + condition of the goods.

It provides evidence of the contract of carriage.

Terms on which goods have been shipped.

Serve as document of title to the goods.

Question 12

Process connected with Bill Of Lading?

Answer 12

Once bill of lading is signed by the carrier goods will be handed over to the shipper.

Question 13

When Bill of Lading is not issued?

Answer 13

Until the cargo is shipped on board, and the shipper as owner of the goods becomes jointly and severally liable to the carrier for any nonpayment of freight due.

Question 14

Sea waybill?

Answer 14

Is not document of title but it bears the name of the consignee who must only identify himself in order to take delivery.

Question 15

Information included in bill of lading?

Answer 15

1. Accurate description of cargo
2. Ship’s name
3. Date of bill of lading
4. Name of shipper and consignee
5. Loading and discharging ports
6. Payment of freight
7. Number of bills of lading
8. Signature
9. Terms of carriage
10. Security of payment/ letter of indemnity

Question 16

Letter of indemnity? (LOI)

Answer 16

Mostly carrier will not give delivery of cargo without production of the fully negotiable bill of lading.

However carrier may decide to hand over the cargo if LOI presented from a reliable party (such as bank).

If the bill of lading is not available at a discharging port, Letter of Indemnity is used, which fully guaranteed by reputable bank.

Question 17

Order?

Answer 17

Charterer in need of ship entering the market.

Question 18

Position?

Answer 18

Shipowner seeking cargo entering the market.

Question 19

Order contained of?

Answer 19

1. Charterers name and domicile.
2. Type of cargo.
3. Volume of cargo and stowage factor.
4. Ports of loading and discharge.
5. Loading window/laycan - the dates when vessel is expected to be ready for loading.
6. Loading discharge rates (desired) and terms.
7. Freight indication
8. Charter party form to be used
9. Commission payable by owner.
10. Other information.

Question 20

DWT? SDWT?

Answer 20

The maximum weight (usually in tons) that can be loaded on ship.

Deadweight. or summer dead weight.

Question 21

Position?

Answer 21

1. Type of vessel, name, when and where it will be open.
2. Ship specifications, age flag, SDWT, draft, LOA, beam, GT, NT, speed, consumption
3. Hold and Hatch specification
4. Grain and bale capacity
5. Volume of cargo and SF
6. Loading/discharge rates (proposed)

Question 22

Offer?

Answer 22

If an owner is interested in responding to the order, he will make an offer.

Question 23

Laycan or L/C - Laydays Canceling?

Answer 23

Period denoted by two dates during which the shipowner must tender notice of readiness to the charterer that the ship arrived at the port of loading.