CHARTERING
Dinesh N. Kutty
1
FIXTURE NEGOTIATION
FIXTURE
OFFER
ENQUIRY
VOYAGE
TIME CHARTERING
CARGO
TYPE OF SHIP
PARCEL SIZE DURATION
COUNTER
VOYAGE
DESCRIPTION-SHIP
PARCEL SIZE
LOADPORT
TRADING AREA
FREIGHT
DISPORT
CARGO
DEMURRAGE
LAYDAYS
SPL.REQUIREMENTS C / PARTY.
LAYCAN
CONCLUSION
TIME CHARTER
DESCRIPTION
T/C PARTICULARS
SPEED
BUNKER CONSUMP.
PERIOD – RATE
EXCEPTIONS -CP
CHARTERING NEGOTIATIONS- IMPORTANT
ASPECTS
1.
FIRM OFFER
2.
COUNTER (there could be one/two or several counters exchanged)
3.
RECAP OF TERMS (FIXED ON SUBJECTS)
4.
CLEAN RECAP (FINAL FIXTURE RECAP)
5.
EXECUTION OF CHARTER-PARTY.
3
SUBJECTS
1. SUBJECT STEM.
2. SUBJECT SUPPLIERS.
3. SUBJECT RECEIVERS.
4. SUBJECT CHARTERERS MANAGEMENT APPROVAL.
CHARTERING NEGOTIATIONS
Step 1:
Enquiry
(Generally, Cargo enquiry inviting offers from owners through one or more broking
channels)
Step 2:
Offer
(Offer from Owners to Charterers giving details and main-terms)
Step 3:
Counters
(Counters are exchanged on Accept / Except basis)
Step 4:
Vessel put on Subjects
(After agreeing main terms, vessel on Charterers Subjects meaning Subject to
- Cargo Stem in order,
- Approval from Suppliers /Loadport
- Approval from Receivers/Disport and
- Charterers Management Approval
Step 5:
Subjects recap are drawn by the brokers with all main terms agreed.
Step 6:
Charter- Party terms are negotiated.
Step 7:
If all subjects are in order, Charterers shall lift subjects and vessel stands clean
fixed. Clean fixture meaning, Shipping contract is on and Charterers and Owners
are bound by the terms agreed between them.
Step 8:
Charter-party is executed.
TWO GOLDEN RULES
FOR CHARTERING PRACTITIONERS
• ALWAYS ACT WITHIN YOUR AUTHORITY
(working within one’s warranty of authority)
• NEVER TO OFFER SAME SHIP TO MORE THAN ONE
CHARTERER AT A GIVEN POINT OF TIME.
FIRM OFFER –VOYAGE CHARTER
- A CASE STUDY
(sent 27 August 2009/ 1700 IST)
1.
VALID :
27 AUGUST 2009 / 1800 HRS IST
2.
FOR ACCCOUNT OF:
GLENCORE, SINGAPORE
3.
NAME OF SHIP:
M.V. JAL DHOOT (OWNERS: PANUNION SHIPPING)
BUILT: 1997, IMO NO: 83211224
CLASS: ABS, DWT: 47352.5
LOA: 189 M, BEAM: 30.4 M
HOLDS /HATCHES : 5 NOS
CRANES: 5 CRANES
CRANE SWL : 25 TONNES
4.
CARGO DESCRIPTION:
COKING COAL IN BULK MIN 45,000 MT MAX. 47,000 MT
IN OWNERS OPTION
5.
LOAD PORT(S) / BERTH(S): 1 SB/ 1 SP NEW CASTLE, AUSTRALIA (AA)
6.
DISPORT(S)/BERTH(S): 1 SB/ 1 SP KAWASAKI OR CHIBA IN CHOPTION
7.
LAYDAYS/CANCELLING: 15 SEPT (0001 HRS) – 25 SEPT (2359 HRS)
7
FIRM OFFER –VOYAGE CHARTER (Contd…)
8. LOAD RATE:
15000 MT PD WWD SHINC
9. DISCHARGING RATE:
10000 MT PD WWD SHINC
10. FREIGHT:
USD. 25 PER MT, FIOST BASIS 1/1
11. DEMURRAGE RATE:
USD. 18000 PDPR ( 50 % Despatch)
12. LOAD / DISCH COSTS:
FIOST (CHARTERERS ACCOUNT)
13. ADDRESS COMMISSION:
1.25% ADDRESS COMMISSION
14. BROKERAGE:
TOTAL 2.5% ( 1.25% per broker)
15. CHARTERPARTY FORM:
LATEST GENCON
16. SUBJECTS:
ALL SUBJECTS 2 DAYS AFTER
FIXING MAIN TERMS.
8
COUNTER –VOYAGE CHARTER
(sent 27 August 2009/ 1745 IST)
-counter from charterer to owner
COUNTER BASIS ACCEPT / EXCEPT
1.
REPLY BY :
WITHIN 15 MINUTES
2.
NAME OF SHIP:
M.V. JAL DHOOT (Does the vessel have AHL?)
3.
LAYDAYS/CANCELLING: 15 SEPT (0001 HRS) – 20 SEPT (2359 HRS)
4.
DISCHARGING RATE:
15000 MT PD WWD SHINC
6.
FREIGHT:
USD.20 PER MT, FIOST BASIS 1/1
7.
DEMURRAGE RATE:
USD. 12000 PDPR ( 50 % despatch)
8.
ADDRESS COMMISSION:
2.5 % ON FREIGHT & DEMURRAGE
9.
ALL C/P TERMS GENCON 1993 SUB-REVIEW
10.
ALL SUBJECTS 3 WORKING DAYS (2 DAYS FOR MAIN TERMS AND 1 DAY FORC/P
TERMS)
9
COUNTER –VOYAGE CHARTER
(sent 27 August 2009/ 1755 IST)
-counter from owner to charterer
COUNTER BASIS ACCEPT / EXCEPT
1.
REPLY BY :
WITHIN 15 MINUTES
2.
M.V. JAL DHOOT HAS AHL. INSPECTED BY AMSA IN MAY 2009
3.
FREIGHT:
USD.22 PER MT, FIOST BASIS 1/1
4.
DEMURRAGE RATE:
USD. 15000 PDPR ( 50 % Despatch)
5.
SUBJECTS:
REPEAT LAST
10
CASE STUDY (Contd….)
1.
CHARTERERS AGREED TO OWNERS LAST COUNTER AND
VESSEL WAS PUT ON SUBJECTS ON MAIN TERMS (SO
CHARTERERS SUBS VALID TILL 29 AUGUST 2009 1800 HRS
IST).
2.
BROKERS PREPARE AND SUBMIT SUBJECTS RECAP.
3.
CHARTERERS AND OWNERS EXCHANGE COUNTERS ON C/P
TERMS.
4.
THE SUBJECTS ARE LIFTED BY CHARTERERS BEFORE EXPIRY
OF TIME AND VESSEL IS CLEAN FIXED.
5.
BROKERS PREPARE AND SUBMIT CLEAN RECAP.
6.
CHARTER-PARTY IS EXECUTED.
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CHARTERING PRACTICE – A CASE STUDY
(TANKERS)
9TH AUGUST 2007
1ST SEPT 2009
ENQUIRY
SUITABLE CRUDE OIL TANKER TO LIFT ABOUT 90 TMT – 100 TMT NHC IN AG
RANGE INTENTION. KUWAIT EXCL. IRAQ IN LAYDAYS 11-12 SEPT 2009 FOR
DISCHARGE SINGAPORE RANGE ON VOYAGE CHARTER, FREIGHT PAYABLE
LUMPSUM, LESS THAN 15 YEAR OLD PREFERRED.
13
FIRM OFFER –VOYAGE CHARTER
(sent 1st September 2009/ 1700 IST)
1.
VALID :
1 SEPT 2009 / 1720 HRS IST
2.
FOR ACCCOUNT OF:
MITSUI OIL PTE. LTD., SINGAPORE
3.
NAME OF SHIP:
M.T. OCEAN CROWN (OWNERS: OCEAN GROUP)
BUILT: 2003, IMO NO: 89011224
CLASS: LRS, DWT: 113018 MT
LOA: 244.16 M, BEAM: 42.035 M
VSL IS DOUBLE HULL & COILED
TTBOOK APPROVED BY SHELL, BP & PETRONAS
4.
CARGO DESCRIPTION:
ABOUT 90,000 MT – 100,000 MT NHC, 1/2 GRADE WVNS.
5.
LOAD PORT(S) / BERTH(S): 1 SB/ 1 SP MINA AL AHMADI
6.
DISPORT(S)/BERTH(S): 1 SB/ 1 SP SINGAPORE
7.
LAYDAYS/CANCELLING: 11 SEPT (0001 HRS) – 12 SEPT (2359 HRS)
8.
ITINERARY: MT OCEAN CROWN SAILED VISAKHAPATNAM 27 AUG 2009 ETA FUJAIRAH
FOR BUNKERING 7 SEPT 2009 ETA MINA AL AHMADI 10 SEPT 2009 AGW, WSNP.
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FIRM OFFER –VOYAGE CHARTER
(Contd…)
9. FREIGHT:
L/S. USD. 1.5 MILLION BASIS 1/1
10. DEMURRAGE RATE:
USD. 25,000 PDPR
11. LAYTIME:
72 HOURS SHINC
12. TOTAL COMMISSION:
3.75% INCLUDING 1.25% ADD. COMM & 2.5% BROKERAGE
TO BE SHARED EQUALLY BETWEEN WEBER, SINGAPORE
AND SHIPNET, NEW DELHI ON ALL FREIGHT &
DEMURRAGE PAYABLE.
13. CHARTERPARTY FORM:
ASBATANKVOY
14. SUBJECTS:
CHARTERERS SUBJECTS VALID TILL 3 SEPT 2009
1800 GMT.
RIDER CLAUSES.
1.
CONOCO WEATHER CLAUSE TO APPLY.
2.
OWNERS OPTION TO BUNKER AT LADEN PASSAGE.
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COUNTER –VOYAGE CHARTER
(sent 1 Sept 2009/ 1740 IST)
-counter from charterer to owner
COUNTER BASIS ACCEPT / EXCEPT
1.
REPLY BY :
WITHIN 10 MINUTES
2.
NAME OF SHIP:
M.V. OCEAN CROWN (Has the vessel called Mina Al Ahmadi?)
3.
CARGO DESCRIPTION:
ADD “ CHOPTION TO LOAD UPTO FULL CARGO BASED ON TANK
CAPACITIES”
4.
LAYDAYS/CANCELLING:
11 SEPT (0001 HRS) – 12 SEPT (1600 HRS)
5.
DISCHARGE PORT(S):
1 SB/ 1 SP/ 1 STS SINGAPORE
6.
FREIGHT:
L/S. 1 MILLION BASIS 1/1
7.
DEMURRAGE RATE:
USD. 15000 PDPR
8.
ADDRESS COMMISSION:
2.5 % ON FREIGHT & DEMURRAGE
9.
LAYTIME:
96 HOURS SHINC
10.
CHARTERERS SUBJECTS VALID TILL 4 SEPT 2009 / LONDON CLOSING
RIDER CLAUSES
1.
OWNERS OPTION TO BUNKER IN LADEN PASSAGE ENROUTE WITHOUT ANY MAJOR DEVIATION FOR
PASSAGE FROM LOADPORT TO DISCHARGE PORT.
16
COUNTER –VOYAGE CHARTER
(sent 1 September 2009/ 1755 IST)
-counter from owner to charterer
COUNTER BASIS ACCEPT / EXCEPT
1.
REPLY BY :
WITHIN 5 MINUTES
2.
M.T. OCEAN CROWN LAST CALLED MINA AL AHMADI IN NOVEMBER 2008
3.
FREIGHT:
USD. 1.15 MILLION (FIXING)
4.
DEMURRAGE RATE:
USD. 20000 PDPR (FIXING)
5.
LAYTIME:
84 HOURS SHINC
6.
SUBJECTS:
REPEAT LAST
RIDER CLAUSES
1.
ALL STS COSTS AT DISCHARGE PORT TO BE FOR CHARTERERS ACCOUNT.
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CASE STUDY (Contd….)
1.
CHARTERERS AGREED TO OWNERS LAST COUNTER AND VESSEL WAS PUT ON
SUBJECTS ON MAIN TERMS. (SO CHARTERERS SUBS VALID TILL 3 SEPT 2009 1800
HRS GMT).
2.
BROKERS PREPARE AND SUBMIT SUBJECTS RECAP.
3.
CHARTERERS AND OWNERS EXCHANGE COUNTERS ON C/P TERMS.
4.
THE SUBJECTS ARE LIFTED BY CHARTERERS BEFORE EXPIRY OF TIME AND
VESSEL IS CLEAN FIXED.
5.
BROKERS PREPARE AND SUBMIT CLEAN RECAP.
6.
CHARTER-PARTY IS EXECUTED.
END CASE STUDY
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DOS AND DONTS FOR A CHARTERING MANAGER (IN OWNERS OFFICE)
DOS
1.
CHECK CHARTERERS BACKGROUND.
2.
GET THE NAMES OF LOAD PORT / DISPORT, IDENTIFY RESTRICTIONS AT THESE PORTS AND
OTHER REQUIREMENTS.
3.
CLEAR DESCRIPTION ON CARGO QUANTITIES AND VESSELS MAX. LOADABLES. CALCULATION
OF FREIGHT IF ON CARGO QUANTITIES SHOULD BE CLEARLY TRANSACTED AND MENTIONED IN
COUNTERS AND FIXTURE RECAP.
4.
COMPLIANCE TO MANDATORY CONDITIONS AT LOADING AND DISCHARGING PORTS VIZ. COFR,
FITTINGS OF AHL, HELI PADS ETC.
5.
CHECK WITH AGENTS REGARDING LOAD/ DISCHARGE RATES ACHIEVED.
6.
REALISTIC VOYAGE ESTIMATE. (KEEP PROFORMAS OF VOYAGE ESTIMATES READY).
7.
STUDY THE CURRENT MARKET RATES (DO NOT BELIEVE IN RUMOURS).
19
8.
CLARITY ON LOAD / DISCHARGE TERMS VIZ. SHINC, SHEX, FIO ETC.
9.
LAYDAYS.
10.
CHARTER-PARTY – CP FORM, UNDER TCP CRTICAL TERMS VIZ. TERMS OF HIRE,
TRADING LIMITS, PLACES OF DELIVERY AND RE-DELIVERY, ON-HIRE / OFF-HIRE
SURVEY, WAR CLAUSES AND ICE CLAUSES, CARGO EXCLUSIONS ETC.
DONTS
1.
DO NOT NEGOTIATE ON THE BASIS OF “TBN” CHARTERERS.
2.
DO NOT USE TOO MUCH OF ABBREVIATED LANGUAGE IN OFFER/COUNTERS
2.
DO NOT BACK TRADE.
3.
DONOT OVER-DESCRIBE OR UNDER-DESCRIBE VESSEL PERFORMANCE WHEN
VESSEL IS PUT ON TIME CHARTER.
4.
DO NOT AGREE FOR VERY LONG TIME FOR CHARTERERS SUBJECTS.