unit 5 charter party

UNIT 5CARGO

CHARTER PARTY

The term charter party describes different type of contracts related to the use of vessels.

Tramp service is the carriage of a variety of cargoes between various ports without sailing on regular routes.

The four principal methods of chartering are:

voyage chartertime charterbareboat chartercontract charter.

VOYAGE CHARTER

The voyage charter is the most common chartering method.

A ship is chartered for a one-way voyage between specified ports with specified cargoes at a negotiated rate of freight.

The charterer agrees to provide the cargo for loading and unloading within an agreed range of dates and agreed loading and discharging rates per day.

Sometimes the arrangement is for a series of consecutive voyages, generally for similar cargoes over the same route.

The freight rate is expressed in terms of so much per ton of cargo delivered.

TIME CHARTER

On time charter, the charterer hires the ship for a stated period of time.

The rate of hire is expressed in terms of carrying deadweight ton per month.

On a voyage charter the owner bears all the expenses of the voyage except freight, on time charter the charterer bears the cost of hire, fuel and stores consumed if agreed.

DEMISE CHARTER

On demise (bareboat) charter the owner of the ship delivers it up to the charterer for the agreed period without crew, stores, insurance, or any other provision.

The charterer is responsible for running the ship as if it were his own for the period of the contract.

Under both demise and time charters, the charterer pays charter hire for the use of the vessel at a specified daily or monthly rate.

CONTRACT CHARTER

A contract charter is usually employed when a large amount of cargo is to be moved over a period of time.

The shipowner agrees to undertake the shipment over a given period at a fixed price per ton of cargo.

LINER TRADE

Liner trade is the passage of ships between designated ports on a fixed schedule and at published rates.

Liner companies provide such service through the liner conference system.

The object of the conference system is to regulate uneconomic competition.

Shipping companies of different ownership and nationality form a conference agreement to regulate rates for each type of freight

F.O.B.

In a F.O.B. (Free on Board) means that the seller delivers when the goods pass the ship's rail at the named port of shipment.

This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.

F.A.S.

The term F.A.S. (Free alongside Ship) means that the seller delivers when the goods are placed alongside the vessel at the named port of shipment.

This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

C.I.F.

C.I.F. stands for cost, insurance, freight, is a term of the contract of sale whereby the seller undertakes to pay the cost of the insurance and transport of the goods to the named port of destination. 

Legal delivery occurs when the goods cross the ship's rail in the port of shipment. 

ANSWER THE QUESTIONS

1-Can you define tramp trade?

2-What are the types of charter party?

3-What does the charterer agree to do on voyage charter?

4-How is the freight rate expressed in a consecutive voyage charter?

5-Where does the seller deliver the goods in F.A.S.?

6-What does C.I.F. stand for?

7-What does charterer bear on time charter?

8-What is the object of conference system in liner trade?

SOME WORDS

Affreightment (n) - Contract for carriage of goods by water

Freight (n) - Either the cargo carried or the charges assessed for carriage of cargo.

Hire (v) - Engage for service under a term of contract

Negotiate (n) - Discuss the terms of an arrangement

Port of call (n) - The port where a vessel discharges or receives freight.

Port of destination (n)- The port that vessel is going

Rate (n) - Ratio, proportion

Tramp (v) - Move about aimlessly or without any destination

Voyage (n) - Journey, trip

Underline the correct word or phrase in bold.

1- Containerization / palletizing is a way of stowing general cargo in a container for transportation.

2- Stevedore/ tallyman is a person or company that establishes agreements to load or unload ships.

3-Ore, sugar, grain, coal etc. are called bulk/ general cargo.

4-Charter parties are for the carriage / stowage of goods.

5- Liner / tramp is employment on a regular schedule, loading and discharging at specified ports

6- In the F.A.S. / F.O.B., the seller bears the costs and risks until the delivery of goods alongside the vessel on pier.

7- Time Charter / Voyage Charter by which the use of a ship and her crew is placed at the disposal of the charterer for a fixed period.

8- On demise charter, the charterer pays freight / hire for the use of the vessel at a specified rate.

24- The carriage of a variety of cargoes between various ports without sailing on regular routes is:

a. liner

b. voyage charter

c. tramp

d. demise charter

e. time charter

24- The carriage of a variety of cargoes between various ports without sailing on regular routes is:

c. tramp

25-Which is not a characteristic of a voyage charter?

a. loading and unloading within an agreed range of dates

b. negotiated rate of freight

c. one-way / consecutive voyage(s)

d. charter hire

e. specified cargo

25-Which is not a characteristic of a voyage charter?

d. charter hire

27-What does F.A.S. stand for?

a. Freight alongside Ship

b. Freight aboard Ship

c. Free aboard Ship

d. Free alongside Ship

e. Free aboard Side

27-What does F.A.S. stand for?

d. Free alongside Ship

28-‘The seller delivers when the goods pass the ship's rail at the named port of shipment’ defines:

a. F.A.S.

b. F.O.B.

c. C.I.F.

d. The bill of lading

e. Demise Charter

28-‘The seller delivers when the goods pass the ship's rail at the named port of shipment’ defines:

b. F.O.B.

30-On ……….., the rate of hire is expressed in terms of carrying deadweight ton per month .

a. contract charter

b. voyage charter

c. consecutive voyage charter

d. bareboat charter

e. time charter

30-On ……….., the rate of hire is expressed in terms of carrying deadweight ton per month .

c. consecutive voyage charter