TANKERS
1
TYPE OF CHARTER
VOYAGE CHARTER
FOR ONE VOYAGE
TIME CHARTER
FOR TIME/PERIOD.
1 OR 2 LOAD PORT/
DISPORTS
VESSEL AT CHARTERERS
DISPOSAL.
FREIGHT, DEMURRAGE
DEAD FREIGHT
MONTHLY CHARTER
HIRE IN ADVANCE.
CARGO RELATED
CHARGES ON
CHARTERERS A/C.
CARGO RELATED
CHARGES ON
CHARTERERS A/C.
TIME CHARTER
VOYAGE CHARTER
DEFINATION
BY CHARTERERS
BY SHIPOWNERS
BY CHARTERERS
BY SHIPOWNERS
ON CARGO - BY CHARTERERS
ON CARGO - BY CHARTERER.
DELIVERY
PAYMENTS
DEMURRAGE
PAYMENT OF
DUES :
BUNKER COST
PORT EXPEN.
PORT DUES
PILOTAGE
TUGGAGE ETC
WHARFAGE
DETAILS
CHOICE
EMPLOYEMENT
CHARTERERS
TIME CHARTER
VOYAGE CHARTER
OF WHEN
THE WHEN A REQUIREMENT IS FOR SHORT
BY REQUIREMENT IS FOR A PERIOD - SPECIFIC VOYAGE OR
LONGER
TIME
- CONSECUTIVE VOYAGES
CONTINUOUS BASIS
BY SHIPOWNERS
DEADFRT/DEVIATION
CHARGES
NOT
SEPARATELY
PAYABLE AS S/OWNER
GETS FULL C/HIRE
INSURANCE CARGO
ON CHARTERERS
A/C
-- SHIP
ON SHIPOWNERS A/C
EXTRA INSURANCE DUE NEGOTIABLE - AS PER
OLD AGE/WAR ETC
C/P
TO
BE
DEDUCTED
FROM
FREIGHT/DEMURRAGE PAYABLE TO
S/OWNERS.
ON CHARTERERS A/C
SHIPOWNERS A/C
NEGOTIABLE - AS PER C/P
ON
TYPE OF
CHARTER
ADVANTAGE
DISADVANTAGE
TIME CHARTER
NO PAYMENTS ON ACCOUNT OF
BUNKERS/.PORT ETC
NO BOTHERATION ON EMPLOYMENT
DURING THE CURRENCY OF TIME
CHARTER.
VOYAGE CHARTER
TYPE OF
CHARTER
TIME
CHARTER
VOYAGE
CHARTER
ADVANTAGE
DISADVANTAGE
FIXED AMOUNT OF
CHARTER HIRE.
SECURED AGAINST
INCREASE FRT RATES VARIATIONS IN MARKET
CONDITIONS
SUSTAINED
AVAILABILITY OF A
TANKER FOR A GIVEN
PERIOD FREEDOM OF
CHANGING
EMPLOYMENT VOYAGE
PATTERN ETC
GETS BENEFITS OF
LOWER FRT MARKET AS
EVERY VOYAGE HE
NEEDS TO PAY BASIS
CURRENT FREIGHT
RATES.
FREEDOM OF
CHARTERING AS WHEN
NEEDED WHEN THE TKR
AVAILABILITY IS
SUFFICIENT.
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11
VOYAGE CHARTER :
CRUDE :
LPG :
13
OWNER
(Revenue)
CHARTERER
(Transport)
THE CHARTER PARTY
(A contract)
BAREBOAT
TIME
VOYAGE
Consecutive
voyage
Contract of
Affreightment
14
15
ASBATANKVOY
Well known and often used which may have a
number of additional or rider side clauses
which were added by Charterers.
Rider clauses re-states the main clause in the
charter party.
Unless rider clauses are carefully drafted and
related to each other and to the clauses in the
printed form there is scope for error,
duplication, inconsistency and subsequent
litigation.
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ASBATANKVOY Charter
Party
Part I
Description and position of vessel
Laydays/Cancelling
Voyage
Cargo
Description of cargo
Rate/Billing
Laytime
Demurrage
Commission
General Average/Arbitration
17
ASBATANKVOY Charter
Party
Part II
Warranty
Freight and Deadfreight
Berthing, Pumping and Mooring
Dues and other charges
Ice
Cleaning/Grades
Advances
Bills of Lading
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ASBATANKVOY Charter
Party
PROTECTIVE CLAUSES
Clause Paramount
Jason Clause and General Average Clause
Both o Blame
War Clauses
Lien
Agents
Assignment/sub-let
Clean Seas
Arbitration
19
20
25
28
29
Withdrawal
(a) Frustration.
(b)Repudiatory Breach.
(c) Exercising a right.
CHARTERING
COMMERCIAL MANAGEMENT
Chartering.
Fixture
Negotiation
Post fixture.
Port
Operation
34
CHARTER PARTY
C / PARTY
CLAUSES
NEGOTIATI
ON
FINALISATION
SIGNING OF
OF C / PARTY
C / PARTY.
35
CHARTERING
VOYAGE
CHARTER
ONE/TWO
LOADPORT/
DISPORT
FREIGHT
DEMURRAGE
TIME
PERIOD
CHARTER
COA
TOTAL
QTY/TKR
(OWN/
CHARTER)
TOOLS
MKT.
TREND
C/HIRE
FREIGHT
DEMURRAGE
LAST
FIXTURE
36
FIXTURE
NEGOTIATION
ENQUIRY
OFFERS
COUNTER
CONCLUSION
VOYAGE
TIME CHARTERING
VOYAGE
TIME CHARTER
CARGO
TYPE OF SHIP
DESCRIPTION-SHIP
DESCRIPTION
PARCEL SIZE
DURATION
PARCEL SIZE
LOADPORT
TRADING AREA
FREIGHT
T/C
PARTICULARS
DISPORT
CARGO
DEMURRAGE
LAYDAYS
SPL.REQUIREMENTS
C / PARTY.
LAYCAN
SPEED/CONSUM.
PERIOD RATE
EXCEPTIONS
37 -CP
POST FIXTURE
OPERATIONS
COORDINATION
COORDINATION
WITH
WITH
CHARTERER
SHIP
AGENCY
ARRANGING
FREIGHT
ARRANGEMENT
FUNDS
COLLECTION
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WHAT IS TANKER
CHARTERING?
A PROCESS INVOLVES NEGOTIATIONS BETWEEN
SHIP OWNERS & A CHARTERER (OIL CO.) FOR
HIRING A SHIP (TIME/VOYAGE OR COA BASIS)
FOR CARRIAGE OF CRUDE OIL/POL AT MOST
COMPETITIVE RATES, TERMS & CONDITIONS.
FREIGHT RATES ARE INFLUENCED BY VARIOUS
INTERNATIONAL SUPPLY DEMAND FORCES &
OPPORTUNITY COSTS.
INTERNATIONAL FREIGHT MKT. HAS NEITHER
FLOOR LEVEL NOR ANY CEILING.
DIRECT NEGOTIATIONS OR THRU BROKERS
MOSTLY ON EMAIL/PHONE/FAX WITH PROPER
DOCUMENTATION/AUDIT TRAIL/RECORDING.
39
WHAT IS TANKER
CHARTERING?
A BRIEF NOTE GIVING FIXTURE RECAP ON MAIN TERMS
THROUGH EMAIL/FAX IS EXCHANGED BETWEEN
PARTIES AS EVIDENCE OF CONTRACT
AS PER INTERNATIONAL INDUSTRY PRACTICE,
CHARTERING IS NOT A TWO BID PROCESS (I.E.TECH.&
PRICE) BUT IS A COMPOSITE BID SYSTEM INVOLVING
TECHNO-COMMERCIAL EVALUATION OF MULTIPLE
PARAMETERS LIKE SPEED/DEAD FRT./YEAR BUILT ETC.
HAVING ITS VARYING IMPACT ON COST
CREDENTIALS OF SHIP OWNERS IS CHECKED THROUGH
IMB/ BIMCO/BROKERS BEFORE NEGOTIATION
CONSIDERABLE FINANCIAL EXPOSURE FOR BOTH
CHARTERER & SHIP OWNERS.
40
CHARTERING INVOLVES
ENQUIRY FOR VOYAGE CHARTER VESSEL CARGO,
PARCEL SIZE, LAY DAYS, LOAD/DISPORT, ETC.
41
CHARTERING INVOLVES
(CONTD.)
42
ATTRIBUTES OF
SHIPPING MARKET- HIGH VOLATILITY.
CHARTERING ACTIVITY
43
FUNCTIONS
CHARTERING & SHIPPING
PAYMENT OF CHARTER
HIRE/FREIGHT
/DEMURRAGE, PORT
DUES,CANAL DUES ETC.
DEMURRAGE & OCEAN
LOSS ANALYSIS.
TANKER PERFORMANCE
APPOINTMENT OF
SURVEYORS /AGENTS AT
FOREIGN/INDIAN
PORTS.
ARRANGEMENT OF
BUNKER SUPPLIES ETC.
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45
BENEFITS OF IN-HOUSE
CHARTERING
DIRECT CONTACT WITH VESSEL OWNERS WORLD
OVER
BETTER CONTROL/FLEXIBILITY.
SAVINGS ON ADDRESS COMMISSION :
- 2.5% ON FREIGHT PAYMENTS TO SCI OR
- 1% TO TRANSCHART.
FREIGHT OPTIMIZATION - FLEXIBILITY OF
COMBINING CARGOES THROUGH SYNERGY WITH
THE OMCS.
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BENEFITS OF IN-HOUSE
CHARTERING CONTD.
SELECTION OF RIGHT SHIP MEETING THE SPECIFIC
REQUIREMENT OF PORT/CARGO.
GRADUAL GROWTH OF PROFESSIONALISM IN
CHARTERING & SHIPPING IN OMC - ENHANCED
INTERNATIONAL CORPORATE IMAGE AS CRUDE
BUYER & CHARTERER LIKE BP, SHELL, CHEVRON &
ESSO.
TIMELY FEEDBACK TO INT.TRADE DEPT. ON FRT./
DEMURRAGE RATES WHILE BUYING SPOT
CARGOES.
STANDARDISATION OF COMPANY SPECIFIC C/PARTY
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CLAUSES.
Pre requisites
BOARD APPROVAL OBTAINED FOR ADOPTING OMCS
SHIPPING POLICY HAVING A BLEND OF IOC/SCI
PROCEDURES OF NEGOTIATIONS/ APPROVALS.
PANEL OF BROKERS FINALISED
INSA & DG-SHIPPING HAVE BEEN APPROACHED FOR
REGISTRATION AS CHARTERERS
REVISION OF LAM DELEGATION OF AUTHORITIES
THROUGH FC FOR APPROVING PROMPT / HIGH VALUE
INTERNATIONAL NEGOTIATIONS WITHIN THE DEPT. HAS
BEEN PROPOSED
TRAINING OF PERSONNEL ON CHARTERING &
SHIPPING IS IN PROGRESS
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Pre requisites.
EXPERIENCED CHARTERING OFFICER FROM SCI
ON DEPUTATION TO OMC.
SEPARATE ROOM FOR CHARTERING DESK,
SPACE FOR C & S DEPT.
MOBILE & ISD FACILITY WITH APPROPRIATE
HIGHER LIMIT OF REIMBURSEMENT.
IT SUPPORT FOR DEVELOPMENT OF SOFTWARE
PROGRAMMES ON VOYAGE ESTIMATION, DISTANCE
TABLE ETC.
SUBSCRIPTIONS TO INTNL. MAGAZINES,
PERIODICLES AND MARKET REPORTS.
49
CHARTERING PROCEDURE
50
Policy aims at
First right of refusal cargo preference to
be given to Indian Flag Ships, without any
frt.preference, for oil imports - FOB lifting.
Standard Shipping policy for PSU Oil
cos.developed in accordance with DGS &
MOS guidelines.
Strictly follow common & transparent
tendering/negotiations procedure while
chartering tankers.
51
Fixtures on subjects:
- Management/DGS approval.
- Loadport / suppliers / disport
approvals.
- DGS clearance on case to case basis
54
Floating of Enquiry in
the
Market
Receipt of offers
..contd.
57
Evaluation of Offers:
58
Negotiations/counters
The process of negotiation:
(A) Incase, No Indian Ship-Owner has quoted
Negotiations/Counterscontd.
60
Negotiations/Counters-
contd.
(A)
Indian ship-owner is L1
Firm offer to L1 Indian Ship owner
And Open to other Indian S/O,irrespective of
their ranking along with all tech.acceptable
Foreign S/Owners.
Ranking of bidders will be disclosed.
If neg. with Foreign S/O is successful,Indian
S/O will be asked to match the rate.
Failing which Foreign S/Os ship will be fixed.
61
Negotiations/Counters-contd.
(B) Indian ship owner is not L1
Indian S/Owners will be asked to match rate of
foreign S/O L1 rate.
If more than one Indian S/O match rates,then
original lowest ranking amongst Indian S/O will
fixed on subjects.
If counters are to be given, firm counter to L1
Indian S/O & open to all Indian as well as
foreign S/Owners irrespective of their rankings.
62
Negotiations/Counterscontd.
63
Fixtures on Subjects:
Once Neg. are concluded fixture will be
confirmed on Subjectswith time schedule to
carry out following activities:
Charterers Mgt.approval
Terminal/Suppliers approval
To arrange for license from DG(Shipping)
Obtain record note of neg. / Fixture note from
the Brokers/Owners for record
All parties to provide record note of telephonic
converation
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Charter party:
Adoption of customised Charter party:
Voyage C/P BPVOY 4 ASBATANKVOY
Time C/P SHELL TIME 4
Coastal Time C/Party
Contract of Affreightment (COA)
Coastal voyage C/party- ASBATANKVOY
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Proposed Ratio
of chartering
Crude oil:
- COA To cover all voyages Appx. 6 MMT
- Time charter:
- LR I (1)
- Indigenous crude
Ravva/MH
- SUEZ MAX (1) - to load term crude ex
RTA-Mumbai (MR)
& Basrah Vizag (VR)
66
Proposed Ratio
of chartering
67
THE MARKETING
STRUCTURE
68
70
The Ship-broker
Collects and distributes information
about the markets
Acts as an intermediary for a
negotiation
Provides the skill and expertise to deal
with the post fixture administration &
operations
Ethical standards ???
71
72
Worldscale
Easy and common reference point for
negotiations and to know the market trends
Takes into account the different port costs as well
as different steaming time to each of the ports
Owners earn approximately the same equivalent
time charter return whichever port of discharge
is nominated
The basic rate is described as the flat rate of
WS100 so that a rate of WS 120 is 20% more
than the flat rate
The rates are per mt
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Worldscale
Worldscale
Loadport ?
Discharge Port ?
Rate per MT ?
Via ?
Distance between Loadport and Discharge Port ?
Worldscale
Variable Differential usually apply where
the port charges on a given ship will be
assessed differently based on the cargo,
loading / unloading and discharge facilities
Fixed Differentials are applied in a
different way to calculate the freight
earned. These are usually based on Gross
Tonnage, Cargo Qty or Distance and are
not applied as percentage to WS flat rate
Produced by two non-profit making
organisation ensuring independence from
external bias & narrow market views
76
AFRA
Developed by Shell and BP
Accepted as a basis for assessing
transportation costs for intercompany movements of oil
Compiled by the London Tankers
Broker Panel and based on all known
fixtures in the market and transport
agreements by oil companies
For GP, MR, LR1, LR2, VL & ULCC
Available only to the subscribers
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