Shipping & Chartering

Concluding a Fixture

Ho Chi Minh City

November 25, 2004

Tor Nordby
Transfield-ER Shipping Inc.

Agenda

• Concluding a fixture
• Voyage Calculation
• Making a Firm Offer
• Negotiations
• The Recap

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Firm Offer
• 1. Name of Charterer/Owner
• 2. Reply time
• 3. Vessels name, short description and itinerary
• 4. Charterer’s name (and background)
• 5. The cargo – full description (dangerous?)
• 6. Load port (s) berth (s) anchorage (s)
• 7. Discharge port (s) berth (s) anchorage (s)
• 8. Laycan (Laydays/Cancelling)
• 9. Load terms

Firm Offer
• 10. Discharge terms
• 11. Tendering Notice of Readiness
• 12. Freight incl. cost allocation
• 13. Payment of freight
• 14. Demurrage/Despatch
• 15. Agents
• 16. Charter Party Form
• 17. (Subjects) – Owners will not give any subjects
• 18. Commission

2
Reply Time
• The reply time shows the validity of the offer

• If the other part confirms the offer within the validity of the offer,
there is a clean fixture

The Vessel
• Vessel’s name including x names
• Short, but exact description
• Type of vessel
• Built and flag
• DWT with draft - TPC/TPI
• GRT/NRT
• Loa/Beam
• Nos holds and hatches
• Nos of cranes and capacity
• Cubic capacity
• Last cargoes
• Speed and consumption (only when doing t/c)
• Vessel’s itinerary

3
Cargo
• Description of cargo (dangerous?)
• Estimated intake based on draft or cubic capacity
• Weight of Cargo – DWCC = Dead Weight Cargo Capacity
• Stowage Factor – Vessels Cubic Capacity
• Restrictions in
• load port
• discharge port
• channels/approaches
• load line zones
• war zones

Load and Discharge Ports

• Often in areas (tank)
• Charterers have to give safe port (s) berth (s) one or more
• Owners must check all restrictions
• Draft – at entrance/port/berth
• Loa/Beam
• Water Line Top of Hatcoamings/Top of Mast
• Others
• Owners must check if the following will be required and if, for
which account
• Shifting/Rotation/Lightering/Hauling

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Safe Port
A port which during the relevant period of time the vessel can
reach, enter, remain at and leave, without, in the absence of an
abnormal occurance, being exposed to a danger which cannot be
avoided by good navigation and seamanship.

Laycan (Laydays/Cancelling)
• Laycan 15-21 November

• Laydays
• The days agreed for commencement of loading
• Charterers are not obliged to start loading before October 15,
even if the vessel should be ready to load prior to October 15.

• Cancelling
• Cancelling date is the latest date on which the vessel must be
ready to load.

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Load and Discharge Terms
• MT/Day Per Weather Working Days
• 24 hours or not?

• Time counting
• SHINC = Sundays Holidays Included
• SHEX = Sundays Holidays Excepted

• UU = Unless Used (if used half actual time used to count)

• EIU = Even If Used

• TURNTIME = The vessel will take her turn in the order of arrival with
other ships
USCIWCHTUTC = Unless Sooner Commenced In Which
Case Half Time Used To Count

Tendering Notice of Readiness

The master must advise charterers in writing as soon as his vessel
is ready to load or to discharge.

As ship is ready to load or to discharge as soon as the following

conditiond have complied with:
1. The ship must have arrived at the place of loading or discharging as
laid down in the charter party or as soon as near thereto as she can
safely get.
2. The ship must be actually ready to load or to discharge in every
respect.

WIBON/WIPON/WIFPON/WCCON

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Freight
• USD per weight/unit
• ”A full and complete cargo”
• Lumpsum
• Fixed price and the charterers can use as much as they want
• Guaranteed quantity, everything in excess at 50%
• Very much used in oil trades

All cost related to loading, discharging, stowing and trimming has

to be established

• On T/C - rate per day or month (or per dwt)

Payment of Freight
• Freight Prepaid
• Freight is payable on completion of loading, so that the exact
quantity of cargo is known and the Bills of Lading have been
signed by the master.
• ”freight shall be considered as fully earned upon shipment and
non returnable in any event whether or not the voyage shall be
performed and wether or not the vessel and/or cargo shall be lost
or not”.
• Freight prepaid is also an acknowledge of receipt of the freight.

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Payment of Freight
• Freight payable on right and true delivery of the cargo
• Freight cannot be collected until completion of discharge.
• The ”lien on the cargo” obviously loses its value in the event
shipowners no longer have control of the cargo.
• BBB = before breaking bulk

• Freight payable as per CharterParty

• 95 pct payable within 7 banking days after signing/releasing Bill of
Lading market ”freight payable as per charterparty”, balance
payable within 30 days after completion of discharge.

Demurrage and Despatch

• Demurrage
• In case a vessel does not complete the loading and/or discharge
within the time allowed in the charter-party, the owners are
entitled to a compensation for the extra delay beyond the agreed
time, on the understanding that the delay is not due to
circumstances beyond charterers control, as enumerated in the
charter-party.
• Despatch
• If the charterer saves time by carrying out the loading and/or
discharge more quickly than agreed he is entitled to claim
compensation.

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The Agent
• Pre arrival
• Collect port charges
• Inform about port/berth conditions
• Notify port authorities
• The port call
• Attending the vessel immediatley after anchoring or berthing
• Serve the captain/owner
• Review the ship/cargo operation
• After sailing service
• Prepare statement of facts (SOF)
• Prepare final disbursement account

Commission
• Address commission
• A reduction of the rate of freight as no special services are
performed by charterers in return.
• A certain percentage of commission is due to charterers on the
amount of freight on signing Bills of Lading.
• Normally used to cover expenses for the chartering department.

• Broker commission
• 1.25% to each broker for the services performed to conclude the
fixture.
• Will also cover services given over time (reports/market update)
• Calcullated on freight/deadfreight and demurrage or hire

9
Charter Party Forms
• Voyage Charter
• DRY
• Amwelsh
• Gencon
• TANK
• Asbatankvoy
• Exxonvoy
Time Charter
• NYPE 93
• Shelltime
Bareboat Charter
• Barecon

• Always with reference to a dated charter party

Common Subjects
• Sub details
• Sub stem (subject to enough merchandise)
• Sub suppliers approval
• Sub receivers approval
• Sub charterers reconfirmation

• Sub management approval

(long term business)

10
Terminology of Negotiating
a) Firm offer
b) Decline your offer and reoffer

a) Firm offer
b) Accept/Except
a) Repeat last offer except

a) Firm offer
b) Accept/Except

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