Key Principles and Definitions

Question 1

What key information must be included in a laytime calculation?

Answer 1

Arrival time, NOR tendering time, laytime commencement, loading periods, delays (e.g. weather, technical), weekends/holidays, and any exceptions.

Question 2

When does laytime commence if NOR is given after noon?

Answer 2

At 0700 hours the next working day.

Question 3

What is the common mistake students make regarding weekends in laytime?

Answer 3

Incorrectly including or excluding weekends without considering charter party terms (e.g. FHEX clauses).

Question 4

What are the four typical disbursement accounts in a port call?

Answer 4

Owner’s account, Charterer’s account, Crew Manager’s account, Cargo Interest/Receiver’s account.

Question 5

What type of expenses are typically listed under the Owner’s account?

Answer 5

Port dues, agency fees, bunkering costs, stores, and pilotage.

Question 6

Which ports are typically used for grain exports in South America?

Answer 6

Rosario (Argentina) and Paranaguá (Brazil).

Question 7

Which vessel types are most appropriate for grain trade?

Answer 7

Handysize or Panamax bulk carriers.

Question 8

What are the key P&I insurance needs of a port agent?

Answer 8

Errors and omissions coverage, breach of warranty of authority cover, cash handling risks.

Question 9

Why is it incorrect to say that a shipowner’s P&I club covers the agent?

Answer 9

Because the agent must arrange their own professional indemnity cover - P&I for owners does not extend to agents.

Question 10

Name five certificates a ship’s Master would present to the agent.

Answer 10

Load Line Certificate, Safety Equipment Certificate, IOPP Certificate, Class Certificate, Deratisation Certificate.

Question 11

What is the purpose of the Load Line Certificate?

Answer 11

To ensure the vessel is not overloaded and complies with stability regulations.

Question 12

Define General Average.

Answer 12

A principle where all parties in a sea venture proportionally share losses resulting from voluntary sacrifice to save the voyage.

Question 13

What documents are needed for cargo release under General Average?

Answer 13

Average Bond and Guarantee from cargo receivers.

Question 14

What are the three functions of a Bill of Lading?

Answer 14

It serves as a receipt of goods, evidence of the contract of carriage, and a document of title.

Question 15

What is a common solution if a Master refuses to sign a clean B/L?

Answer 15

Issue a claused B/L or provide a Letter of Indemnity with charterers agreement.

Question 16

What does ‘As agent only’ mean in port agency?

Answer 16

The agent acts on behalf of a disclosed principal and avoids personal liability.

Question 17

What is a breach of warranty of authority?

Answer 17

When an agent exceeds their actual authority, causing loss to a third party who relied on that authority.

Question 18

What should a formal agency proposal include?

Answer 18

Company background, operational capabilities, compliance (ISO/QHSE), contact details, and added value services.

Question 19

What are examples of added value services in port agency?

Answer 19

Crew changes, husbandry, customs clearance, spares delivery, local transport arrangements.

Question 20

What does WIFPON stand for?

Answer 20

Whether in Free Pratique or Not – affects NOR validity.

Question 21

What does BWAD stand for?

Answer 21

Both Weather and Always Accessible – affects laytime exclusions.

Question 22

What does NAABSA stand for?

Answer 22

Not Always Afloat But Safely Aground – vessel may safely sit on bottom at berth.

Question 23

What is ARAG?

Answer 23

Antwerp-Rotterdam-Amsterdam-Ghent – a common European routing abbreviation.

Question 24

What is Notice of Readiness (NOR) and when is it valid under common charter party clauses?

Answer 24

Notice of Readiness (NOR) is a declaration by the Master that the vessel is ready in all respects to load or discharge cargo. It’s only valid if given during working hours, after the vessel is at the contractual place (e.g., berth or anchorage), and free pratique has been granted or not required (WIFPON).

Question 25

In laytime calculations, how should delays caused by rain be treated?

Answer 25

If the charter party specifies 'weather working days,' any period where rain prevents loading/unloading is excluded from laytime. These delays must be documented in the Statement of Facts.

Question 26

What is the effect of the clause: 'Time from 1700 Friday to 0800 Monday not to count unless used, but half time used to count'?

Answer 26

This means weekends do not count towards laytime unless work is done. If used, only 50% of actual time worked is counted towards laytime, unless the vessel is already on demurrage.

Question 27

How is despatch money calculated, and when is it applicable?

Answer 27

Despatch is earned when loading/discharging finishes ahead of the allowed laytime. It is calculated as half the demurrage rate multiplied by the laytime saved, prorated if needed.

Question 28

Define 'General Average' and name five keywords associated with it that should appear in an exam answer.

Answer 28

General Average is the equitable sharing of loss where a voluntary sacrifice is made to save a maritime venture. Key terms: 'voluntary sacrifice', 'common adventure', 'York-Antwerp Rules', 'proportionate share', 'GA bond/guarantee'.

Question 29

What is the role of the port agent in a General Average situation?

Answer 29

The port agent facilitates contact with the Average Adjuster, ensures collection of General Average Bonds and Guarantees from cargo interests, arranges any necessary documentation, and helps release cargo at the port of refuge.

Question 30

What must be included in a full port call disbursement for a charterer?

Answer 30

Charges related to stevedoring, berth hire, shifting charges, and any port expenses contractually passed to the charterer under the C/P terms.

Question 31

Why is it essential to separate crew manager expenses into a dedicated disbursement account?

Answer 31

To accurately charge expenses related to crew changes, visas, transport, and medicals to the crew manager rather than shipowner or charterer, ensuring financial clarity and reducing disputes.

Question 32

What are the agent's options when a Master refuses to sign Bills of Lading due to rust-stained steel?

Answer 32

The agent may: a) issue a claused B/L noting the rust; b) obtain a Letter of Indemnity from the charterer; c) advise reloading/replacement; d) mediate between master and charterers. Any action must avoid exposing the agent to liability.

Question 33

Why might a Master refuse to open the vessel's hatches if no original B/L is presented?

Answer 33

Without an original B/L, there is no legal proof of title to the cargo. Discharging without one may expose the owner to claims. The Master is protecting the owner's rights and avoiding misdelivery.

Question 34

List three types of coverage a port agent should have and why.

Answer 34

1) Errors and Omissions (E&O) covers professional mistakes; 2) Cash Handling cover for loss of funds in transit; 3) Breach of Warranty of Authority protects when acting outside granted authority.

Question 35

Give an example of breach of warranty of authority in a port agency context.

Answer 35

If an agent accepts a vessel for a port that cannot accommodate it (e.g., beam exceeds lock gate limits), and charterers rely on that acceptance, the agent may be liable for resulting costs.

Question 36

What is the purpose of the International Tonnage Certificate?

Answer 36

It records the vessel's gross and net tonnage as defined by the International Convention on Tonnage Measurement, used for port dues and regulatory purposes.

Question 37

What is the Deratisation Certificate and when is it required?

Answer 37

It certifies that the vessel has been inspected and is free of rats and vermin. It is mandatory for international port calls under WHO regulations.

Question 38

What makes a strong formal agency proposal for a tanker client?

Answer 38

It includes: company history, past experience in tanker trades, compliance certificates (e.g., ISO, QHSE), fees, operational capabilities, crew/husbandry services, emergency response, and added value options.

Question 39

What are common mistakes in exam proposals for agency services?

Answer 39

Failing to use formal tone, omitting company credentials, ignoring client-specific needs, and providing generic rather than tailored value-added services.

Question 40

What is FHEX and how does it impact laytime?

Answer 40

FHEX: Fridays, Holidays Excepted - time on these days does not count towards laytime unless expressly worked.

Question 41

Explain the term CHOPT and give an example.

Answer 41

CHOPT: Charterer's Option - the charterer has discretion within agreed terms. For example, they may choose 1 or 2 ports for discharge, at their option.

Question 42

Which vessel type is typically used for transporting LNG and why?

Answer 42

LNG is carried in highly specialised, insulated tanks (not pressurised). Typical vessels are Moss-type or membrane-type LNG carriers, with capacities of 120,000-266,000 cbm. They must maintain cargo at -162°C.

Question 43

Why is using a Capesize vessel for grain trade generally incorrect?

Answer 43

Grain trades typically use Handysize to Panamax vessels due to draft limitations and port infrastructure. Capesize bulkers are too large for most grain export terminals.

Question 44

What are the key techniques to improve cash flow in a port agency business?

Answer 44

1) Secure advance funding (pro forma disbursement); 2) Prompt invoicing and follow-up; 3) Tight control of debtors and creditors; 4) Minimise credit terms. Examiners note confusion between cash flow and profitability - increasing sales alone does not improve cash flow.