Exam 1 Flashcards
(37 cards)
Chartering
When someone who needs a ship or space on a ship contracts with a shipowner for that space.
The term charter party came from the Latin phrase Carta Partita which means “divided document”
DNRVAOCLONL
discountless nonrefundable vessel and or cargo lost or not lost
FIOS L/S/D
free in/out and stowed ; lash, secure and dunnage
FLT
full liner terms
FILO
free in liner out
LIFO
liner in free out
BASIC RESPONSIBILITIES OF ALL BROKERS
To act strictly in accordance with authority given by the Principal
To exercise due diligence and skill in the execution of the assigned functions
To communicate all pertinent information to his Principal which might affect the Principals attitude in the negotiation
To render when requested strict account of any monies handled on behalf of the Principal (this has become less common, although the Broker still typically checks on status of bank wire transfers)
Not in any way to work for or further the interest of the other party to the deal
(BROKER WORKS FOR PRINCIPAL)
CHARTERING BROKER AUTHORITY
!!The Charter Broker acts on the strict authority of his Principal!!
If a Broker concludes business that is clearly executed with the authority, of his principal, then the principal is legally bound
If the Broker exceeds his authority, the principal clearly is not bound by the result. The Broker could be held liable to an injured party
Thus it is very important, as a Broker, to always know the limits of your granted authority. This is especially important as regards freight rates or hire
It is important to remember that a Broker is merely a conduit of information and advice. You give your principal as much information as you have, but the final decision is completely up to the principal.
AGW-WOG-WP-UCE or
All going well - without guarantee - weather permitting - unforeseen circumstances expected or fluid
Subjects
Most of these are the details contained in all Charter Party agreements but not main negotiated terms.
Terms falling into this category are subject to Time Bar.
Typical “Subjects” are:
Subject Details
Subject Stem
Subject Board of Directors Approval
Subject Management Approval
Subject Supplier Approval of Nomination
Subject Owner’s Approval of Charterer
Subject Open/Unfixed
What are the major societies today?
Lloyd’s Register (London)
American Bureau of Shipping (New York)
Bureau Veritas (Paris)
DNV GL (Norway-Germany)
Nippon Kaiji Kyokai (Tokyo)
They are completely independent of the insurance industry and the countries in which they reside
They carry out and supervise the annual and “special” surveys (4-5yrs)
Length-over-all (LOA)
The linear distance from the most forward point of the stem to the aftermost point of the stern (important for potential business).
Extreme breadth
The linear distance from the most outboard point on one side to the most outward point on the other side. This includes any projections on the ship’s side.
Draft
The depth of the ship below the waterline measured vertically to the lowest part of the hull. (NAABSA - not always afloat but safely aground)
Air Draft
The vertical distance from the vessel’s waterline to the highest fixed point on the ship, typically a signal mast on the top of the bridge. (important when traveling across bridges for the height, most newer bridges are tall enough to accommodate ships)
WLTHC (Water Line To Hatch Coaming)
Height of the vessel’s hatch coamings above the waterline. (start from the bow when numbering hulls)
Needed to determine if vessel can fit under intended Id or discharge equipment, if shore equipment will be used
Off Hire
The vessel itself is not in the condition expected for which it’s to sail (declares the vessel as off hire due to whatever the reason, the ship must be in class or it cannot sail)
LNG Characteristics
(liquified natural gas)
Consists primarily of methane which has a boiling point of -162 deg C.
Carried fully refrigerated at -162 dec C, in large insulated tanks. It cannot be liquified with pressure alone
The vessels have a high cubic capacity with relatively little draft
The vessels did not typically have reliquefaction equipment, so they usually had fairly quick running speeds. Newer vessels are being outfitted with liquefaction equipment
Some “boil off” occurs and is used as fuel for the vessel
Broker Negligence
Misrepresentation of creditworthiness
Misrepresentation of the vessel’s description or capacity
Failure to pass on firm offers
Passing on ETA for a voyage charter in bad faith or without qualification
Failure to pass load port nominations or redelivery notices
Failure to pass on demurrage claims or comply with time bars on submitting claims
Failure to lift subjects in time. In a volatile market this is worse
Overvaluation in financing on S&P deals
Duties and Responsibilities of Owner
To make the vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied
The Owner must also arrange to have the vessel delivered or made ready for loading/discharging at the proper place and time in accordance with the Charter Party (laycan)
It is CRUCIAL that Owners know background, past performance history and the financial positions of potential Charterers (ie. Enron, Andre)
Duties and Responsibilities of Charterer
In a voyage charter, the Charterer must be ready to either start loading or discharging operations when the vessel is properly tendered, by the Owner
In the case of a time charter, the Charterer must be ready to take delivery of the vessel at the time and place stipulated in the charter.
Is is becoming increasingly important that Charterers have the same understanding of Owners, before concluding business with them
DOP vs APS
DOP = delivery dropping outward pilot station (at last port of discharge from previous voyage)
APS = Arrival pilot station (at new port)
Important Point: these are time charter terms not voyage charter terms
What makes a successful ship broker
Integrity and ethics makes a successful ship broker. A broker can only function effectively if he has the trust of the concerned parties and more broadly, his concerned market. Accuracy is absolutely essential, but so is imagination and creativity
Broker
An agent who arranges marriages
An agent who negotiates contracts of purchase and sale
