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Commercial voyage management for cargo ship

Ships Charterparty agreement

By carefully planning each stage of a voyage the Master and his management team can make a significant difference to the profitability of the voyage. This covers a whole range of topics and requires excellent communication and co-ordination between all parties involved and particularly the ship, technical manager and commercial operator. Consideration to be given with planning for Ballast Passage , Load Port , Laden Passage & Discharge Port

Off-hire

Time Charters and Pools have very strict off-hire clauses designed to compensate the Charterer for unavailability or under-performance of the vessel. It is important that off-hire is minimised wherever possible and that all opportunities for maintenance during waiting or idle time are utilised.

This requires close co-ordination between the ship and management office. Important: After tendering NOR at any port, the vessel should not be disabled unless prior approval is obtained. If the vessel is called into berth and is unable to move the original NOR could be deemed invalid and subsequent waiting time would not count as laytime.


Deviations and Delay

A deviation is a departure from the intended voyage or Contract of Carriage and the vessels commercial operator must be advised accordingly. It can be either geographical or the introduction of an element of risk into the voyage which was not envisaged at the time of signing the Contract.

If a deviation is unjustified, the ship-owner can lose all rights of limitation and all the defences and exceptions available to him. Consequently, the Ship Owner has to take out additional insurance (known as S.O.L. cover or Ship Owners Liability) to cover the cargo during this duration.

A justifiable deviation is one which is required for the safety of property or life at sea, or something has happened since the commencement of the voyage which makes the voyage impossible unless the deviation is effected. This must be considered when deviations are being contemplated or reported for non-essential purposes.


Bunkering

It is important to understand the commercial aspects of bunkering and how the onboard management can make this as cost effect as possible. The cost of bunkering the vessel contributes to a very large portion of the Owner’s (or Disponent Owner’s) expenditure. This can be broken down into two areas – what can be controlled and what can not.



The bunker market is largely uncontrollable for an Owner or Operator and if he needs to bunker his vessel at a port then he will largely need to pay the market price. He can try and better the market by using contracts with various suppliers or even hedging bunkers; however he will invariably ride the market.

The bunker management onboard though is controllable to some extent. By ensuring that the largest bunker tanks are free and available for bunkers at the cheapest ports, the Master and management team can make a difference. This requires good planning onboard between deck and engine departments.

The management team can also ensure that the bunkers are used as efficiently as possible, by actively taking a role in the speeds that the ship steams at (in conjunction with the Commercial Operator), and ensuring that the vessel has a clean hull and propeller and is technically sound (in conjunction with the management office).

There have been numerous examples of bunker suppliers trying to defraud vessels with under supply or off spec bunkers, and it is vital that ships staff take all possible precautions. One of the most well reported “tricks” is cappuccino bunkers where the supplier pumps air into the bunkers to increase the volume artificially.

In the event of any dispute between the ship and bunker supplier the hose should remain connected and the commercial operator and/or management office contacted for advice as soon as possible. DO NOT sign the bunker delivery receipt until authorised to do so. Further advice can be found in the Attached Documents.


Voyage Orders

Voyage Orders should be received onboard via the commercial operator (for voyage charter vessels) of otherwise the Time Charterer’s operator. It is extremely important that the correct lines of communication are used and that the Master always ONLY follows orders from the correct person. Local orders SHOULD NOT be followed unless prior approval is obtained. Generally guidance is as follows:

1. Only follow voyage instructions that are sent to you by your Operator unless you have prior and clear instructions from your Operator to follow local instructions.

2. Be especially careful if on time charter and ensure that all instructions come from your time charter operator. If in doubt contact them for clear orders (or contact us if you need assistance).

3. Never assume that cargo surveyors or terminal personnel have been briefed with the same instructions that you have. If you get conflicting information then contact your Operator immediately.

4. The voyage orders are your definitive instructions. If you receive information or instructions from anyone (even if it appears to be from the Charterers directly) that contradicts these orders then always contact your commercial operator for verification.


Time charter routing

For many years the decision of the Master on which route to follow was beyond question and his choice in the best interests of all parties was nearly always considered final. This position changed significantly following the famous case referred to as “Hill Harmony”. Some detailed information regarding this case is available in Attached Documents however it should be noted that if the Master deviates from weather routing advice then there must now be a justifiable reason for doing so.

If time charterers engage a weather routeing service and the Master decides to deviate from their recommendation then the commercial operator should be advised in advance.


Our additional pages contain somewhat larger lists of resources where you can find useful informations

  1. Dry Cargo Charterparties

  2. There are numerous various forms, but to give a taste of dry cargo time charters, two types that are commonly used are: - New York Produce Exchange (NYPE 93) Baltic and International Marine Council (BALTIME 1939 (amended 2001)....

  3. Tanker Time Charters

  4. Specific information such as, parties to the contract, where and when the vessel will be delivered, rates of hire, general permitted cargoes, general trading range etc. ....

  5. Documentation & notices

  6. When a vessel is on Time Charter, bunkers and the majority of port services and costs, etc., are to the account of Time Charterers. However, should Time Charterers default on payment, then these charges may fall on Owners and there will then be a serious risk of the vessel being arrested for debts incurred by the Time Charterer. ....

  7. Function of bill of lading

  8. The Bill of Lading is one of the most important documents that the Master will sign and therefore strict controls on how it is issued are required. Although the B/L is usually drafted by the Shipper and presented to the Master for signature, it is an Owners document. One of its three functions is to act as a receipt for the cargo, so therefore the Master must make sure that the quantity and description of the goods is accurate as he will be expected to deliver the same to the Receiver.....

  9. Seaworthiness for cargo ship, international navigational condition & procedure for Insurance claim

  10. Insurance premiums amount to a very large proportion of the ship’s running costs. Whilst the owner insures his ship against certain risks and may present a claim which will recuperate at least part of his losses, the effect of submitting many claims will have the effect of increasing the insurance premiums for the next year. It is therefore in everyone’s interest to ensure that risks are not taken, that the ship operates safely and that accidents and incidents are avoided....






Other info pages !

Ships Charterparties Related terms & guideline
Stevedores injury How to prevent injury onboard
Environmental issues How to prevent marine pollution
Cargo & Ballast Handling Safety Guideline
Reefer cargo handling Troubleshoot and countermeasures
DG cargo handling Procedures & Guidelines
Safety in engine room Standard procedures
Questions from user and feedback Read our knowledgebase
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