Exam 2 Flashcards
(29 cards)
For a voyage charter, the gross revenue to the Owner is
Freight and demurrage
Capital costs
(cost of any vessel financing)
May have an effect on Ows attitude towards long term employment, but usually disregarded when estimating on spot business
laying up the vessel
stop using it for a period of time
Laytime is usually expressed in either of two ways:
A fixed number of days (or even hours)
A fixed tonnage of cargo per day (or occasionally per hatch/hook/crane per day)
Non-reversible laytime
The time used is subtracted from the time allowed at load port, and the same method is followed for the discharge port. Demurrage/despatch, if any, is payable on completion of loading and likewise on completion of discharge
In simple terms, you treat load and disch calculations/laytime usage separately
Non-reversible laytime is the general rule, in the absence of specific agreement to the contrary
Reversible laytime
Under this method, the total laytime allowed for the load and discharge ports is calculated and added together, and from that is deducted the total loading and discharging time used. The demurrage or despatch is calculated from the resulting net figure
This method favors charterer’s interests in a couple of ways:
If laytime is exceeded at load port, you can make it up at the disport
Demurrage, if any, can only be calculated after disch. So payment of demurrage to ows is delayed as long as possible
WORLDSCALE
code for “new worldwide tanker nominal freight scale”
The tanker industry’s reference for calculating freight rates (like the stock price)
Who runs Worldscale?
Calculated and maintained by two non-profit associations, in London and New York. Both Associations coordinate with regard to policy and publication of the schedule. Each association is under the control of a Management Committee which consists of senior figures from leading tanker broking companies
Important points about Worldscale
There is no compulsion to use Worldscale (not mandatory)
It is a reference index and does not pretend to protect the user on any particular transaction
Both parties to a contract are free to negotiate any variation of Worldscale if they so choose
What are the components of the Worldscale rates?
Vessel dwt (of 75,000 metric tons)
Vessel’s average service speed (14.5 knots)
Bunker consumption
What are the constants of the Worldscale rates?
Rates are expressed in US$ per metric ton
Rates are calculated assuming a round voyage from load port or ports to discharge port or ports and back to the first loading port
Shex
Sundays and Holidays Excluded
Shinc
Sundays and Holidays Included
Components of the voyage estimate
do not determine the market
Basically a method for calculating the estimated return to the vessel owner or operator
The estimating aids the owner in deciding which cargoes or employment to pursue
Even if used, unless used
EIU and UU
working days
comprises 24 hours, running from midnight to midnight. This does not mean that the hours from when time starts to count until the first midnight do not count; it is just that the calculation of whole days starts from midnight
Laytime
the period of time allowed the charterer under the provisions of the charter party to load and/or discharge the ship’s cargo
Before laytime can commence, there are certain conditions the owner must meet:
The ship must have “arrived” at the loading (or discharging) berth or port as stipulated in the charter party
The ship must be, in all respects, fully prepared to load (or discharge)
The ship must have tendered the Notice of Readiness (NOR) as prescribed, to the shippers (or receivers)
NOR
(doesn’t always have to be in writing)
Notice of Readiness
calculate laytime
reversible and non-reversible
Canal tolls
based on vessel’s canal net tonnage (typ found in description), typically higher than the flag net tonnage, canal authority will usually measure tonnage on vessels first transit and issue permanent tonnage certificate
Daily net returns or T/C Equiv
gross revenue - commissions - voyage expenses/total voyage days
In regular turn
meaning that the charterer is under no obligation to work the vessel out of his regular turn. Thus laytime will not commence until the vessel is on the berth. This is rarely used today
Operating costs
“running costs”
crew wages, stores and supplies, lube oil, maintenance and repair, insurance and any management fees
In more instances, you would not include these costs and would just look at the T/C equiv, in general
