M A R ITIM E P R A C TITIO N ER S
By Kevin Joseph
MBA (Energy
Trading)
M erchant
A person or company involved in
wholesale trade ,especially one
dealing with foreign countries or
supplying goods to a particular trade
An individual whose occupation is to
buy items at wholesale price and sell
them at retail price
The practitioners should be aware that
the demand for shipping is a derived
demand.
Shipping is a derived demand, which
means that shipping as an industry
depending on people who are willing
to trade by sea using ships.
[Link] for grain trade increases,
so demand for shipping grows with it.
CH ARTERIN G M ARKETS
The D ry Cargo M arket
Dry bulk trades comprise iron ore, coal, grain,
timber, steel and other similar cargoes which are
shipped in bulk.
Dry Cargo market relies on a range of vessels and
covers all the worlds major trade routes.
A chartering contract is the example of a
transaction entirely governed by market forces.
The relative bargaining strength of the two parties
depend on the current state of the market.
D ry Cargo Charter Parties
Two most commonly used charter parties used for dry cargo
are the Baltime and the New York Produce Exchange (NYPE)
Charter parties.
The Baltime is often considered to favour shipowners while
the NYPE is considered more advantageous for charterers.
Many of the standard forms are imposed on the markets by the
charteres:
To fit into the their contacts of sale of the commodity itself.
The charterer is most of the time in a stronger position as
far as terms and conditions are concerned as they are static
and is easy for them to band together with the competitors.
Single Voyage Charter:
Ship agrees to go to load a cargo of an
agreed quantity of a commodity and carry it
to B for which the consideration will be rate
of freight (calculated on per tonne basis)
Consecutive Voyages:
When there are more than one cargo to
move and in a consequence , it is convenient
to fix the cost i.e to contract with the owner.
Tim e Charter
The shipment is responsible for providing a seaworthy
ship with valid classification and a master and a crew,
so that the ship can be sailed to its final destination.
The charterer is responsible for loading, stowing and
discharging cargo safely.
The charterer is responsible for giving the master the
effective orders and instructions with regard to when
and where the cargo should be shipped.
The charterer is responsible for providing fuel for the
vessel.
Contract ofAff
reightm ent
Binding agreement which sets forth the
obligations and rights of the owner of a vessel and
a merchant.
The vessel owner undertakes to provide cargo
space (at a specified time and at a specified
freight)to the merchant who is liable for payment
whether or not the cargo is ready for shipment
The contract addresses issues associated
specifically with the vessel, its crew and the
routes on which it will be piled
Bare Boat Charter
The owner gives possession of the ship to the
charterer and the charterer hires its own master and
crew.
The giving up of possession of the ship by the owner
is the defining characteristic of a bare-boat charter.
The bare-boat charterer is sometimes called a
"disponent owner".
The chartered takes over the vessel for a stated period
of time with a minimum of restrictions for a stipulated
sum.
Term inologies used in voyage
charter :
Trimming
Dunnage
Tallying
Stevedore
Agents
Trimming:
Applies to bulk cargoes such as coal, where the surface of the
loaded cargo needs to be leveled out to make best use of the
space available and to minimize the danger of the cargo
shifting in the hold during the voyage.
Dunnage:
Is the timber used to prevent metal to metal contact between
cargo and the ships to hold or between ship plates. And to stop
loose items from moving around in the hold during the voyage.
Tallying:
Is the name given to the procedure of checking the no of
packages, as they are loaded or discharges.
Stevedores:
One who is employed in the loading or unloading of ships.
Steve D ore
The primary role of a
stevedore is the loading
and unloading of freight on
an off ships while they are
in port
Other responsibilities
includes 1-mooring and unmooring
ships
2- cleaning and preparing
container
3-stacking and securing
cargo's
4-adminitravtives process
associated with the transfer
of cargo
Stevedore(also known
as a dock worker,
docker or dock laborer,
wharfie) is usually the
entry point for
individuals seeking a
carrier on the docks or
within ports
Stevedores can than
progress to became a
crane operator,
foreperson or
container terminal
manager
Refer document in
folder.
Skeleton ofvoyage charter :
Date
Names of parties
Name of the ship with some
description
Loading port
Cargo nature and quantity
Discharging port
Lay days and cancelling dates
Rate of freight and manner of
payment
Loading/discharging cost
Speed of loading and
discharging
Demurrage rate
Brokerages
Tim e charters :
The shipment is
responsible for providing a
seaworthy ship with valid
classification and a master
and a crew, so that the ship
can be sailed to its final
destination.
Objective :
Is to transfer the
commercial direction of the
ship to the charter while
leaving technical controls
with its owners.
Refer document -
NYPE 93 asbatime
Skeleton oftim e charters
Date
Names of parties
Name of the ship with some
description
Speed and fuel consumption
Duration
Places of delivery and re
delivery
Trading area or limitations
Rate of hire
Lay days and cancelling
dates
Commissions
Internationalchartering m arket at
W ork
Internet
Dry cargo chartering takes place
all over the world
Geological location of a shipping
market is very crucial to hold a
dominant position.
Eg : London market
With the advent of new
technologies. The
communications between the
traders, the seller and the buyer
has improved significantly. It is
real time and can be part of the
market from any part of the
world at any time of the day.
Servers
Wireless
communications
Optical cables (trans
atlantic cable)
The practitioners in the shipping
com m unities :
Charters and their
agents
Owners and their
brokers ( here brokers
can have several roles)
The broker can be a
member of the
charters (or owners
own staff)
Exclusive brokers :
These can be shipbrokers that
negotiate charters only for one
shipowner or one charterer.
It can also mean shipbrokers
that specialise in a restricted
category of vessel, such as oil
tankers; or in a restricted
category of shipbroking , such
as sale and purchase of
passenger ships.
The broker can also work
exclusively with regard to the
place in which he offers his
broking services, such as a
broker offering services
exclusive to Hong Kong
Competitive brokers :
Here the principal places his
business on the market through
several brokers who are in
competition with each other to
bring suitable business to the
principal.
There is also extensive used of
intermediate broker . These
broker must walk a very narrow
path because he or she does
not represent either of the
parties and so must take care
to be strictly even-handed.
The tanker m arket
This market is separate form the
dry cargo markets but tanker
chartering itself subdivides into
separate specialists
Crude oil market is the important
market.
Any any political unrest in the
middle east directly effect the
crude market.
It is also prone to be in headlines
due to the catastrophic pollution
problem during spills.
The depth of the water is important
to accommodate the draft of the
giant crude oil carriers.
Crude O il
This is the trade that
hits the news
whenever there is
political unrest in the
Midddle East.
Catastrophic pollution
problem takes place
whenever there is oil
spill
The things which conspired to
stop the continuing upward
trend in tanker sizes are Draft question
Economy of the ships-the
sheer size of ships were
lacking designers' into areas of
pure theory.
Recession caused by the oil
producing countries which
imposed massive price
increase and thus created a
slump in the demand for oil
.and thus the price of he
dead-weight tonne has to be
increased
Petroleum products
These are those which are extracted
from the crude oil which are to be
burnt in that form.
Ranging from highly volatile to
viscous .
There is a term as clean and dirty oil
Clean oil require particularly clean
vessel, handling that carry them .
The fuel can be naptha , kerosene , etc
Dirty oil covers fuel oil, diesel and
heavy gas oil as well as crude .Many
heavy oil require heating before they
can be pumped with the help of the
heating coil.
The second tanker
market is that for
refined petroleum
products.
The oil consuming
world quickly found
that the most
economical system
was to site refineries
near the end users.
Chem icals and other products
These are the by
products of the oil
refining . e,g
feedstocks for
manufacturing
plastics.
Some are volatile
and some are toxic
that can cause
damage.
Ships in such trades have to be equipped
with showers at intervals along the deck
so that any splashes may be washed at
once
One thing these cargos have in common
is the need of the cleanliness of the
ships tanks
One source of impurity could simply be
the surface of the tanks themselves and
chemical carriers normally have metals of
the tanks coated with a plastic film.
Some are soluble and some are not.
Parcel tankers are used to carry many
different consignments in different tanks .
H2so4, vegetable oil,wine LNG are easily
transported in this .
Tanker charter parties
Tanker market has its single voyage and consecutive voyage charters
and a contracts of affreightment.
The basic construction of the tanker charter is the same as for the dry
cargo and in some respects the clauses are simpler for the wet cargo as
oil installations are almost variably set well apart from port complexes.
the operation is simpler in case of the oil transport.
One major difference between voyage charters for dry cargo and those
for tankers is in the way the rate of freight is expressed.
It is usually expressed in terms of the unit of currencies per tonne of
cargo carried
A system was evolved after world war 2 to have an agreed schedule of
nominal rates covering every combination of loading and discharging
ports for crude oil.
This enabled a charter to fix a ship naming in an area. fix prices for an
area.
TH A N K YO U
