Voyage CharterVoyage Charter

Malcolm MaclachlanMalcolm Maclachlan

What is a voyage charter?What is a voyage charter?

• Agreement between a shipowner and a Agreement between a shipowner and a charterer for carriage by a charterer for carriage by a named vesselnamed vessel of of a a specified quantityspecified quantity of a of a specified specified commoditycommodity from a from a named place(snamed place(s) to ) to another another named place(snamed place(s), in return for agreed ), in return for agreed sum of sum of freightfreight..

• Shipowner pays all vessel operating Shipowner pays all vessel operating expenses (“running costs” and voyage expenses (“running costs” and voyage expenses, except where otherwise agreed expenses, except where otherwise agreed (e.g. FIO terms).(e.g. FIO terms).

• Similar to taxi-cab hire.Similar to taxi-cab hire.• Also called Also called spot charterspot charter..

Shipowner’s obligationsShipowner’s obligations

1.1. Bring ship to agreed loading place by midnight on Bring ship to agreed loading place by midnight on cancelling datecancelling date..

2.2. Tender NORTender NOR as specified in Notice of Readiness as specified in Notice of Readiness Clause within agreed Clause within agreed lay/canlay/can period. period.

3.3. Keep ship available to charterer during agreed Keep ship available to charterer during agreed laytimelaytime period (for charterer’s port operations). period (for charterer’s port operations).

4.4. Load and carry cargo with “all possible despatch” to Load and carry cargo with “all possible despatch” to agreed destination.agreed destination.

5.5. Tender NORTender NOR on arrival at agreed destination if on arrival at agreed destination if required by C/P.required by C/P.

6.6. Deliver cargoDeliver cargo to receiver on presentation of an to receiver on presentation of an original B/Loriginal B/L..

7.7. Pay all Pay all vessel operating expensesvessel operating expenses and and voyage voyage expensesexpenses except whether otherwise agreed. except whether otherwise agreed.

Charterer’s obligationsCharterer’s obligations

• ProvideProvide agreed quantity of agreed agreed quantity of agreed commodity for loading at agreed place.commodity for loading at agreed place.

• Pay freightPay freight as per C/P. as per C/P.

• Pay demurragePay demurrage as per C/P if loading or as per C/P if loading or discharge time exceeds agreed laytime.discharge time exceeds agreed laytime.

• Pay Pay deadfreightdeadfreight on any short-loaded on any short-loaded quantity, if demanded.quantity, if demanded.

Notice of Readiness (NOR)Notice of Readiness (NOR)

• Notice given by master (or, if C/P allows, Notice given by master (or, if C/P allows, his agent) in accordance with C/P to his agent) in accordance with C/P to charterer (or his agent) that vessel is at charterer (or his agent) that vessel is at destination specified in C/P and is in destination specified in C/P and is in every respect ready to load/discharge. every respect ready to load/discharge.

• Valid NOR triggers start of laytime.Valid NOR triggers start of laytime.

• Usually in writing, but check NOR Clause!Usually in writing, but check NOR Clause!

LaytimeLaytime

• Period of time agreed between shipowner and Period of time agreed between shipowner and charterer during which shipowner will make and charterer during which shipowner will make and keep vessel available for loading or discharging keep vessel available for loading or discharging without payment additional to freight. without payment additional to freight.

• Conditions for commencement:Conditions for commencement:1.1. Vessel is an “arrived ship” (i.e. at destination specified Vessel is an “arrived ship” (i.e. at destination specified

in C/P, depending on whether it is a Port C/P or Berth in C/P, depending on whether it is a Port C/P or Berth C/P)C/P)

2.2. Vessel is fully at charterer’s disposal (i.e. all hold/tank Vessel is fully at charterer’s disposal (i.e. all hold/tank preparations complete).preparations complete).

3.3. C/P NOR provisions have been complied with.C/P NOR provisions have been complied with.

Laytime exceptions & Laytime exceptions & interruptionsinterruptions• Laytime exceptionsLaytime exceptions: Periods agreed : Periods agreed not to be not to be

counted as laytimecounted as laytime, e.g.:, e.g.:– Shifting from waiting area or berth to final loading berth;Shifting from waiting area or berth to final loading berth;– Waiting for first suitable tide;Waiting for first suitable tide;– Bad weather or sea conditions which prevent vessel’s Bad weather or sea conditions which prevent vessel’s

loading, discharging or shifting between berths;loading, discharging or shifting between berths;– SHEX: Sundays and holidays excepted; FHEX;SHEX: Sundays and holidays excepted; FHEX;– Rain periods - if laytime specified as “weather permitting”.Rain periods - if laytime specified as “weather permitting”.

• Laytime interruptionsLaytime interruptions: Events which suspend : Events which suspend running of laytime, e.g. pump- or hatch-cover running of laytime, e.g. pump- or hatch-cover failure. (If FIO, breakdown of shore equipment does failure. (If FIO, breakdown of shore equipment does not stop laytime.)not stop laytime.)

Demurrage & despatchDemurrage & despatch

• DemurrageDemurrage: Sum of liquidated damages : Sum of liquidated damages payable payable by charterer to shipownerby charterer to shipowner for each day for each day (or part thereof if stipulated), during which ship (or part thereof if stipulated), during which ship is detained beyond expiry of laytime.is detained beyond expiry of laytime.

• Rate per day specified in C/P, e.g. $17,000. Rate per day specified in C/P, e.g. $17,000. Payable Payable pro ratapro rata for part of a day. for part of a day.

• Despatch moneyDespatch money: Reward paid by : Reward paid by shipowner shipowner to chartererto charterer, ONLY if provided for in C/P, where , ONLY if provided for in C/P, where time used for cargo ops was less than laytime time used for cargo ops was less than laytime allowed. Traditionally half the demurrage rate.allowed. Traditionally half the demurrage rate.

Statement of factsStatement of facts

• Document produced by port agent (from agent’s Document produced by port agent (from agent’s port log) on completion of ship’s port operations.port log) on completion of ship’s port operations.

• Contains all facts needed for calculation of Contains all facts needed for calculation of demurrage (or, if applicable, despatch). demurrage (or, if applicable, despatch).

• Includes times of arrival, berthing, tendering NOR, Includes times of arrival, berthing, tendering NOR, commencement & completion of loading, commencement & completion of loading, stoppages due to weather or other reasons.stoppages due to weather or other reasons.

• Signed by each party (agent + master + Signed by each party (agent + master + shippers/receivers). shippers/receivers).

• Enables agent to compile a Laytime Statement Enables agent to compile a Laytime Statement (showing any demurrage or despatch money due).(showing any demurrage or despatch money due).

FIO – “free in and out”FIO – “free in and out”

• Shipowner is free of responsibility for, and Shipowner is free of responsibility for, and costs of, loading and discharge. costs of, loading and discharge.

• Charterer benefits from reduced freight Charterer benefits from reduced freight rate.rate.

• Usual in dry bulk trades, since cargo Usual in dry bulk trades, since cargo loading & discharge equipment, personnel, loading & discharge equipment, personnel, etc. is arranged by shipper, consignee or etc. is arranged by shipper, consignee or charterer – not by shipowner.charterer – not by shipowner.

Port & berth charterpartiesPort & berth charterparties

• Port C/PPort C/P: Terms provide that vessel shall tender : Terms provide that vessel shall tender Notice of Readiness at a specified Notice of Readiness at a specified portport but does not but does not nominate a particular nominate a particular berthberth in that port. in that port.

• Obliges the vessel to reach jurisdictional limits of Obliges the vessel to reach jurisdictional limits of specified port before she can be considered an arrived specified port before she can be considered an arrived ship.ship.

• Better for shipowner than a Berth C/P!Better for shipowner than a Berth C/P!• Berth C/PBerth C/P: Terms provide that vessel shall tender : Terms provide that vessel shall tender

Notice of Readiness at a Notice of Readiness at a specified berthspecified berth or “ or “one safe one safe berthberth” at a specified port or place.” at a specified port or place.

• Puts risks of delay (e.g. due to port congestion) onto Puts risks of delay (e.g. due to port congestion) onto shipowner.shipowner.

• Less favourable to shipowner.Less favourable to shipowner.• Look for “wipon, wibon, wccon, wifpon” in NoR Clause!Look for “wipon, wibon, wccon, wifpon” in NoR Clause!

Wipon, wibon, wccon, Wipon, wibon, wccon, wifponwifpon• May appear in NOR clause, e.g.: “Notice of May appear in NOR clause, e.g.: “Notice of

readiness may be given on any day at any readiness may be given on any day at any time wipon, wibon, wccon, wifpon”.time wipon, wibon, wccon, wifpon”.

• Means NOR can be given whether in port or Means NOR can be given whether in port or not, whether in berth or not, whether customs not, whether in berth or not, whether customs cleared or not, whether in free pratique or cleared or not, whether in free pratique or not.not.

• Where inserted in NOR clause in a Berth C/P, Where inserted in NOR clause in a Berth C/P, effectively converts it to a Port C/P: better for effectively converts it to a Port C/P: better for shipowner!shipowner!