Professor Adjunct of International Business Law,. Stockholm ... Institute of
Chartered Shipbrokers l. 34 .... Directions and instructions to the vessel: log
books. 283.
SHIPBROKING AND CHARTERING PRACTICE By
LARS GORTON Professor of Banking Law at the University of Lund Professor Adjunct of International Business Law, Stockholm School of Economics
PATRICK HILLENIUS Shipbroker
ROLFIHRE Advocate
ARNESANDEVARN Shipping Consultant
SEVENTH EDITION
informa LONDON 2009
CONTENTS
C
PAGE
Preface Introduction List of Figures Bibliography
v vii xix xxi
CHAPTER 1. THE FREIGHT MARKET The dry cargo market The bulk and 'tweendecker market The container market The ro/ro market The liner market The small ship market Special markets Heavy-lift carriers Barges and pontoons Tugs The tanker market The "combos" The reefer market The car carrier market The passenger market The sale and purchase market Freight derivatives
•:
,
CHAPTER 2. THE STATE OF THE MARKET
1 2 2 4 5 6 6 7 7 7 8 8 10 10 12 13 13 14 17
CHAPTER 3. SHIPOWNING CONDITIONS AND MARKET ACTIVITIES 23 Materials administration in shipping
26
CHAPTER 4. INFORMATION CHANNELS
29
Information network and exchange Order Positions Market reports Freight negotiations
29 29 31 32 32
xii
CONTENTS
General information Information centres The Baltic Exchange Institute of Chartered Shipbrokers BIMCO Information network Information coverage Means of communication The time factor .J he role of the broker and the agent Shipbrokers Sale and purchase broker Port agents Liner agents Brokers and agents connected with owners Brokerage Insurance for intermediaries
Attitudes in negotiation Marketing and relation to the customer Organization of a shipping office
49 50 54
CHAPTER 6. SALES CONTRACT, CARRIAGE AND BILL OF LADING
57
Sales contract, financing, carriage The sales contract is the basic agreement in the export transaction Incoterms "The sea transport chain" Risk, cost and liability distribution between the different parties The Incoterms 2000 EXW (ex works) FCA (free carrier—named point) . FAS (free alongside ship) FOB (free on board) CFR (cost and freight) CIF (cost, insurance and freight) CPT (freight or carriage paid to—named place) CIP (freight or carriage and insurance paid to—named place) DAF (delivered at frontier) DES (delivered ex ship) DEQ (delivered ex quay) DDU (delivered duty unpaid) and DDP (delivered duty paid) Certain summing up comments Documentary credit How the documentary credit works The documents The bill of lading The bill of lading as a document of title "Clean" bills of lading
CONTENTS Documentation in modern transportation The new infrastructure The electronic document Summing up of the role of transport documents and multimodal transport Relationship between carriage of goods by sea and other means of transport Transport documents The function of the bill of lading as evidence for the receipt of the goods The bill of lading as evidence for the quantity and condition of the goods The bill of lading as proof of delivery of the goods in conformity with the ** contract of sale . ' Mandatory content of a bill of lading "Weight unknown" and "said to contain" clauses Importance of the receipt function for the consignee The bill of lading as evidence of the contract of carriage with the carrier Bankability of transport documents Issues regarding the interfaces between the laws of carriage and sales The carrier's liability Liability for cargo under charterparties Carrier liability Conventions The compulsory nature of the liability rules The scope of application of the Conventions The liability system Cargo claims and time limits Limitation of liability . Shipowners' liability as regards inspection and description of the goods Some basic features of the Hamburg Rules The date of the bill of lading Substitute documents Liability against third party Cargo insurance and P&I UCP and the bill of lading
General remarks about chartering Liner shipping and tramp shipping Chartering documents The charterparty Different types of chartering Voyage charter Consecutive voyages , Time charter Bareboat charter Quantity contracts Space (slot) charter Management agreements Cost elements in chartering "Charter chains"
The ship's name Period of time Intended voyage Commodity and stowage factor Cargo quantity 'Costs Notations Calculations Summing up and conclusions Special calculations "* Particular factors in connection with consecutive voyages and marginal calcu.. . • lations * Liner calculations Reefer calculations Calculation and time charter Tanker calculations Reporting
CHAPTER 9. CHARTERING ROUTINES The period of investigation Voyage charter Time charter Liner booking . The reaction of the shipowner r ,; The period of negotiation Main terms Details . Constructing the document The period of follow-up Brokers' obligations Special chartering routines Sale/purchase routines Sale/purchase events and market practices Some routines in negotiations Sale/purchase with employment Bareboat charter with purchase option Hire-purchase agreement Sale with charter-back
Some general remarks on contract law The parties Maritime law and legislation Court and arbitration proceedings Arbitration Arbitration or court procedure Evidence Construction and interpretation of charter agreements The design of the charterparty The offer and the making of the contract
177 178 179 180 181 183 184 184 184 185
'
CONTENTS
xv
"Subject" problems Problems of interpretation i CHAPTER 11. COMMON CLAUSES AND CONCEPTS
186 191
Preamble The parties to the contract The identity Substitution of owner or charterer The^essel Nomination, identity and substitution Vessel's trading limits The concept of seaworthiness Lay/Can^ "Lay"" "Can" The war clause, War cancellation clauses War risk clauses War clauses in voyage charters and time charters Effect of cost variations on the contractual relationship Currency clauses Escalation clauses Other clauses dealing with change of costs The arbitration clause ,: Time limits Exception clauses Signing of the agreement Maritime liens Arrest of vessels General average Collision Towage and salvage Towage Salvage . BIMCO standard ISM clause
The vessel ' Description of the vessel Specification of cargo capacity The voyage Nomination of ports—rotation Safe port, safe berth, always afloat, etc. The near clause The ice clause The sea voyage Deviation The cargo Type and specification Cargo quantity
CONTENTS The freight Definition Fixing of the freight When is the freight earned and payable? Freight risk Deadfreight Payment of freight Brokerage Security for payment of freight Loading and discharging -r Allocation of costs Securing and lashing of cargo • Laytime Arrived ship Notices, notice time and readiness Time allowed Fixed time Time noKfixed Reversible time Crude oil washing (COW) and disposal of residues Time counting and exceptions Once on demurrage, always on demurrage Demurrage and damages for detention Payment of demurrage Despatch money Influence of other clauses—several charterer's Routines and allocation of costs ETA notices Allocation of costs Harbour dues Freight taxes . Strike clauses Agents Cesser and lien Is the cesser clause justified and valid? Exercising of lien Collecting by owners from receivers Cargo liability Owners' liability for cargo when both a voyage charterparty and a bill of lading are involved Liability as against cargo owners Cargo retention clauses Redress Damage to the vessel
The vessel Description of the vessel Cargo capacity Speed and bunker consumption Maintenance
255 255 258 258 261
CONTENTS The trade Geographical limits Non-geographical limits Breaking of trading limits Requirements of the trade Trip time chartering Ballast bopus The cargo Type and specification Excluded cargo The periodThe length of the period Overlap/underlap—last voyage Extension of the flat period due to off-hire periods during the charter Delivery and redelivery When shall the vessel be delivered? Where shall the^essel be delivered? In what condition" shall the vessel be delivered and redelivered? Allocation of costs at delivery and redelivery The hire and payment of hire Fixing of the' hire Payment Late payment—owners' security Deductions from hire Payment of last instalment of hire ••" Off-hire The off-hire claim The grounds for off-hire The threshold rule The loss of time The loss of money Deduction of off-hire Other obligations during off-hire periods Insurance for loss of hire / Damages and pre-termination of the charter Routines and allocation of costs Directions and instructions to the vessel: log books Master's position Customary assistance: overtime Allocation of costs Information Cargo liability Liability to cargo owners Allocation of liability between owners and charterers Damage to the vessel Damage caused by bad weather, collision and grounding Damage caused by fuel oil Damage caused by cargo Other damage Repair of damage Protective clauses
Why a volume contract of affreightment? Terminology Charterer's point of view Owner's point of view Definition of contract of affreightment Examples Characteristics and definition of the contract of affreightment Legislation T h e . documents •Intercoa 80 Volcoa and Gencoa General The contract period Some different ways to agree about the period Commencement and termination of the period: borderline between part periods ; V Premature termination of the period and interruptions The cargo Type of cargo Total quantity of cargo Quantity fixed or not fixed: 1A or IB Charterer's obligation to offer cargo: 2A or 2B Owner's obligation to carry cargo: 3A or 3B Overlifting and shortlifting Final shipment The vessels The nomination of vessels Interest is gradually concentrated on a named vessel The programme and the nomination procedure The individual clauses Brokers
I. Gencon II. Gentime III. Conlinebill IV. New York Produce Exchange Form 1993 V. Shelltime 4 VI. Shellvoy 5 VII. Letter of credit—the function of the bill of lading VIII. Saleform 1993 IX. Voylayrules 1993 X. Baltic Code 2000 XI. FONASBA Time Charter Interpretation Code 2000
