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Worldwide Tanker Nominal Freight Scale - "Worldscale"

What is worldscale

“Freight” is the remuneration payable by the charterers to the owners for the performance of the contract . It may be called charter party freight in the contract.

"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., which are controlled by panels of leading tanker brokers in London and New York City respectively.

Because an oil cargo may be bought and sold many times whilst aboard a tanker at sea, the cargo owner requires great flexibility in his choice of discharge options. If tanker fixtures were priced in the same way as dry cargo fixtures the shipowner would have to calculate a different freight rate for each discharge port that the charterers may opt for. Worldscale avoids this problem in that it provides a set of nominal rates designed to provide roughly the same daily income irrespective of the place of discharge.

Worldscale is a schedule of nominal tanker freight rates used as a standard of reference by means of which rates for all voyages and market levels in the crude and oil products tanker trades can be readily compared and judged. This is aimed at making the business of fixing tankers simpler, quicker and more flexible.

Worldscale is based on an average vessel with average costs earning an average rate. It works on the basis that, using the realistic costs of operating an imaginary standard tanker of “average” size on an “average” 15,000- mile round voyage, the break-even freight rate for that ship on that route can be calculated. This “Worldscale Flat” rate is calculated in US dollars per metric ton of cargo carried on a standard loaded voyage between a loading port and a discharge port with a ballasted return voyage.

The freight rate actually negotiated in a fixture, using the Worldscale Flat rate as a basis for negotiation, is called the “Worldscale Freight Rate”. This negotiated rate will depend on the strength of the market and will be quoted in market reports in Worldscale points in the way outlined above.

Pumping Clause

Tanker charter parties often contain a clause under which the owner warrants that the vessel will discharge her full cargo within 24 hours, or will maintain a specified manifold pressure (e.g. 188 psi), provided that the shore facility is capable of receiving at the stated rate.

The clause further provides that if the vessel fails to comply with the stated warranty, the charterer will have the right to order the vessel to be withdrawn from the berth at the owner’s time and expense until such time as the berth again becomes available for discharging the balance of cargo remaining on board.

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
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