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Charter related problems at loading ports - procedure for cargo ships employment

If charterers repeatedly reject the vessel on grounds of unclean holds or tanks most charter parties have clauses dealing with cleaning of compartments before loading. Some charter parties give the master sole authority to decide when the vessel is sufficiently clean for loading to commence, while others require the vessel to be cleaned “to the satisfaction of the Charterer’s Inspector”, which may lead to the charterers repeatedly rejecting the vessel and asking for more cleaning to be done before acceptance. The charterers must be able to show that such rejections and requests were reasonable.

Unless the charter party provides otherwise, the master has final responsibility for deciding when cargo compartments are sufficiently clean for loading. If personally satisfied that compartments are clean enough for the intended cargo, the master should:

• act reasonably;
• bear in mind that he is acting in the interests of both the owners and the charterer;
• politely and firmly point out to the surveyor that the responsibility outlined above is the master’s;
• point out that the cost of any further cleaning will be for the charterer’s account; and
• note protest. If ordered to leave the loading berth before acceptance, the master should not agree to do so unless so instructed by the owners/disponent owners, or unless there is a clause in the charter party giving the charterers the right to order the vessel off the berth, in which case the order should come from the charterers to the master via the owners.




If charterers cannot provide a cargo on arrival

The mastershould tender notice of readiness in accordance with the charter party, and inform the shipowner.
The charterers are not in breach of contract until the agreed laytime has expired.
The vessel should “sit out” the laytime, the period of which should be computed from the charter party. If no cargo has been provided by the time of expiry of laytime, the master should note protest, stating that the owners’ obligations under the charter party have been met, and await instructions.


If charterers cannot provide the agreed cargo quantity

It is customary in the bulk trades for the charter party to allow for the actual weight intaken to be more or less (MOL) than the proposed weight by a margin of perhaps 10%, in either the charterer’s option (MOLCO) or the owners’ option (MOLOO).

If the weight loaded is less than the agreed margin, the charterers will be in breach of contract and liable for deadfreight. The owners will be entitled to take reasonable steps to find other cargo to fill the unused space.

In such a case the master should send a letter of protest to the charterer, contact the owners, and note protest. A deadfreight claim form may have to completed by the master, for submission to the charterer.



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Summarized below seagoing cargo ship various employment guide:
  1. Charty party forms

  2. defines the obligations, rights and liabilities of the shipowner and charterer. Recognised standard form (e.g. GENCON, BALTIME, NYPE)
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    Nature of a time charter
    The charterers agree to hire from the shipowner a named vessel, of specified technical characteristics, for an agreed period of time, for the charterer’s purposes subject to agreed restrictions.
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  3. Voyage charter advantages

  4. contract for the carriage by a named vessel of a specified quantity of cargo between named ports or places.
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  5. Terms of Bareboat charter and lease arrangement

  6. The vessel owners put the vessel (without any crew) at the complete disposal of the charterers and pay the capital costs, but (usually) no other costs.
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  7. Seaworthiness of vessel

  8. A vessel must be fit to encounter the “ordinary perils of the sea” (e.g. bad weather) and other incidental risks to which she will be exposed on the voyage..
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  9. International trade terms (INCOTERMS) in sea transportation

  10. INCOTERMS is a set of rules, published by the International Chamber of Commerce, for the uniform interpretation of the most commonly used trade terms used in international trade contracts.
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  11. Money transfer procedure in sea transport

  12. Money transfer system commonly used in overseas trade to enable sellers to obtain early payment, i.e. soon after shipment of the goods.
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  13. Contract between cargo seller and buyer

  14. The contract of sale between the seller and the buyer of the goods is separate from the contract of carriage which one party or the other, or a third party (such as a freight forwarder), will make with the carrier .
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  15. Parties involved in sea transportation of goods

  16. Forming links in the transport chain- Sea carrier, Freight forwarder, shipper, consignee,agent & banks
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  17. Carriage of goods by sea act 1992 (COGSA 92)

  18. Section 3 of COGSA 92 lays down guidelines establishing when liabilities under a bill of lading, sea waybill or ship’s delivery order will be transferred to a party who is not an original party to the contract of carriage (i.e. an endorsee or transferee). The party who takes or demands delivery of the goods to which a bill of lading, sea waybill or ship’s delivery order relate becomes subject to the same liabilities as the original shipper..
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  19. Laytime interpretation rules

  20. Rules, which were issued jointly by BIMCO, CMI, FONASBA and INTERCARGO, replace the Charter party Laytime Definitions 1980.
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  21. CIF ( Cost, Insurance and Freight ) used in international trade terms (INCOTERMS)

  22. “CIF” means Cost, Insurance and Freight (paid to a named place), e.g. CIF London.- is a contract based on the discharge port
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  23. FOB ( free on board ) used in international trade terms (INCOTERMS)

  24. “FOB” means Free On Board (named port of shipment), e.g. “FOB Newcastle NSW”. It is one of the most commonly used term (INCOTERMS) in sales contracts involving sea transportation of goods.
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  25. Ships employment baltic exchange

  26. Baltic Exchange members undertake to abide by a strict code of business practice, enshrined in the famous Baltic motto “Our Word Our Bond”.
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  27. Ships charter market place

  28. Most ships employed in the charter markets are dry bulk carriers, tankers, combination carriers (e.g. OBOs), or reefer vessels, although there is also a charter market for container ships and for vessels of various special purpose types
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  29. Common Chartering abbreviations

  30. Many terms commonly used by shipbrokers and others involved in ship chartering, mainly to save time and effort in communications. Shipmasters may come across many of the acronyms and abbreviations in documents relating to charters, e.g. in telexed voyage orders and market reports..
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  31. Tanker freight worldscale

  32. "Worldscale" is the code name for the “New Worldwide Tanker Nominal Freight Scale”, published by the Worldscale Association (London) Limited and the Worldscale Association (NYC) Inc
    More .....

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