Skip to main content

Charter

CHARTERER - It is a person or company who hires a vessel for a specified voyage or a specified period of time. 

There are three types of chartering:

  1. Voyage charter
  2. Time charter
  3. Bareboat charter

VOYAGE CHARTER:
  • A voyage charter is the hiring of a vessel and crew for a voyage between a load port and a discharge port. The charterer pays the vessel owner on a per-ton or lump-sum basis. The owner pays the port costs (excluding stevedoring), fuel costs and crew costs. The payment for the use of the vessel is known as freight. A voyage charter specifies a period, known as laytime, for loading and unloading the cargo. If laytime is exceeded, the charterer must pay demurrage. If laytime is saved, the charter party may require the shipowner to pay despatch to the charterer.
  • In a voyage charter, laycan days are given to the owner. Laycan is a period of lay days plus canceling date. During this period vessel must arrive and be presented at the load port/place. If the vessel arrives before that date the charterer need not accept her until the commencement of the agreed lay days.
  • In case of any machinery breakdown takes place during the voyage and because of that if the vessel is not present at agreed port or place, the charterers are entitled to reject the vessel and cancel the charter.
  • So, it is the duty of chief engineer to check the main engine rpm so that vessel should be present at the port or place as specified in charter party and between laycan days.
  • Master can take the appropriate route to reach the port without the permission of charterer.
TIME CHARTER:
  • A time charter is the hiring of a vessel for a specific period of time; the owner still manages the vessel but the charterer selects the ports and directs the vessel where to go. The charterer pays for all fuel the vessel consumes, port charges, commissions, and a daily hire to the owner of the vessel.
  • In time charter vessel speed and fuel consumption are mentioned and agreed in the charter party.
  • As fuel is supplied by the charterer, so any deviation in case of fuel or speed, the owner has to pay the compensation to the charterer.
  • So, chief engineer has to maintain charterer required rpm to get the speed as specified in the charter party.
  • Master has to take permission from charterer before diverting the route. Route of the voyage should be approved by the charterer.
  • Similarly, the cargo operation time is also mentioned in the charter party.
  • And if it deviates from this, the vessel will be off hired for that particular period of time.
BAREBOAT CHARTER:
  • The charterer obtains possession and full control of the vessel along with the legal and financial responsibility for it. The charterer pays for all operating expenses, including fuel, crew, port expenses and P&I and hull insurance.
  • In case of the bareboat charter, all responsibilities regarding navigation, propulsion, and maintenance of shipboard machineries remain with the charterer itself.
  • The shipowner receives lower hire payment, because of lower exposure to risk.
  • Bareboat chartering is a financial tool, designed to help investors purchase ships. These investors then leave the operation and management of their ships to the experts in the shipping business.
  • Most often the contract is signed in BARECON standard charter party form. Charterer may have a purchase option at the end of the contract.

Comments

Popular posts from this blog

Difference Between A, B & C-Class Divisions?

IMO Symbol A Class Division  IMO Symbol B Class Division  SOLAS has tables for structural fire protection requirement of bulkheads and decks. The requirements depend on the spaces in question and are different for passenger ships and cargo ships. The Administration has required a test of a prototype bulkhead or deck in accordance with the Fire Test Procedures Code to ensure that it meets the above requirements for integrity and temperature rise. Types of Divisions: "A" Class "B" Class "C" Class "A" Class: "A" class divisions are those divisions formed by bulkheads and decks which comply with the following criteria: They are constructed of steel or equivalent material They are suitably stiffened They are constructed as to be capable of preventing the passage of smoke and flame to the end of the one-hour standard fire test. they are insulated with approved non-combustible materials such that the average tempera

Load Line & Why it is Important

Merchant ships have a marking on their hull know as the Plimsoll line or the Plimsoll mark, which indicates the limit until which ships can be loaded with enough cargo, internationally, the Plimsoll line on a ship is officially referred to as the international load line. Every type of ship has a different level of floating and the Plimsoll line on a ship generally varies from one vessel to another.  All vessels of 24 meters and more are required to have this Load line marking at the centre position of the length of summer load water line. There are two types of Load line markings:- Standard Load Line marking – This is applicable to all types of vessels. Timber Load Line Markings – This is applicable to vessels carrying timber cargo. These marks shall be punched on the surface of the hull making it visible even if the ship side paint fades out. The marks shall again be painted with white or yellow colour on a dark background/black on a light background.  The comp

Pump Shaft Alignment Procedure

Types of shaft alignment methods: Visual Line-Up Straightedge/Feeler Gauge Rim and Face Cross Dial Reverse Dial Laser Visual Line-Up The visual line-up method is the most common method of alignment. Used in initial installations, visual line-up allows technicians to analyze the working conditions and feasibility of installation. Straightedge/Feeler Gauge Straightedges are used to determine the offset between coupling halves. Corrections are made under all four of the machines feet. Feeler gauges or taper gauges measure the gap between coupling halves at the bottom and top of the coupling. Rim and Face This method is similar in principle to using a straightedge and feeler gauge, but more accurate since dial indicators are used. The rim reading measures the offset between the coupling halves. The face reading measures the angular difference between the faces of the coupling. Changes are calculated with the same formula as the straightedge/feeler gauge met