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Tanker Time Charters agreement

The Contract between one party who has control of a ship and another party who wishes to make use of the ship is known as a Charterparty.

Tanker time charter party forms a similar format regardless of who has drafted them. They contain similar provisions which can be summarised as follows:
  1. 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.
  2. Commercial provisions such as, notices to be given for delivery and redelivery, when and how hire is to be paid, how bunkers will be accounted on delivery and redelivery, permitted bunker grades etc.
  3. Owners’ rights and obligations
  4. Charterers’ rights and obligations (including speed and performance warranted by the Owner and the Charterers’ rights should they not be met)
  5. Special provisions such as, war risk clauses, ice clauses, general average, law and arbitration, clause paramount etc.
As the vessel could be engaged on time charter for many months or even years, it is extremely important that the Master and Officers are fully aware of the terms included and the obligations of the Owner and ship towards the Charterers. If for any reason the Master becomes aware that the vessel can not meet any of the terms of the C/P the management office and/or commercial operator should be contacted immediately.

Very large crude carrier SEA LADY
Fig: Very large crude carrier SEA LADY

Tankers – tank atmospheres

Many Terminals, including the UK, Norway, various European ports, Venezuela and several others operated by Oil Majors have strict H2S and/or Mercaptan restrictions. It is extremely important that you are always aware of the tank atmospheres of your vessel and also if there are any restrictions at your next or future ports.

If in doubt about any Terminal or port requirements then the commercial operator and/or management office should be contacted immediately for guidance.

Tankers – pumping warranties

On modern Tankers, there should be very few circumstances where the vessel can not comfortably comply with the C/P pumping requirements. There are however several scenarios where Charterers are able to deduct laytime for alleged poor pumping and for further guidance see Attached Documents. It is extremely important that the C/P pumping requirements are well understood onboard.

Tankers – cargo measurement

It is obviously important that cargo measurements taken onboard are carried our as accurately as possible. Some recommendations are:
  1. Make sure that the vessel has a full set of working MMC’s onboard and that they are calibrated properly at all times.
  2. Compare the accuracy of each MMC against each other. For example test their temperature probes in the same bucket of water.
  3. Use the same MMC throughout a voyage for measuring. i.e. the same equipment at load and discharge port.
  4. If you send any units ashore for calibration, make sure that replacement units have calibration certificates and compare readings to your other equipment.
  5. Do not make “home-made” repairs to MMC’s. This will in all likelihood put them out of calibration.
  6. Make sure that calibration stickers are on the MMC’s and that certificates are available where possible.
In the event of cargo discrepancies and potential claims, be sure that the equipment in use for measuring (as well as the calculations) is beyond reproach by any third party.

Tankers – commingling or blending cargo

From time to time your vessel may be asked to commingle cargo on the request of the Charterers. This can sometimes be a risky proposition and usually it comes down to a commercial decision on whether the Owners want to assist the Charterers or not, how reputable the Charterer is and whether the end Receivers are aware of the operation. The P&I Clubs provide some useful guidance on this.

Tankers – cargo retention and ROB clauses

Some tanker voyage Charterparties include a clause which allows charterers to deduct from freight with respect to cargo remaining onboard on completion of discharge. Many charterers include clauses amongst their standard rider clauses.

It is therefore extremely important that the vessel discharges ALL the cargo to the best of her capabilities and that the paperwork is carefully completed in order to protect the Owner. For further guidance see Attached Documents.

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....

  11. Masters obligation to follow charterers routeing advise - The Hill Harmony case

  12. The Hill Harmony case involved a vessel on time charter trading trans-Pacific. The Charterers had engaged a weather routing service and the Master was advised to take the shortest northern great circle route, however he deemed it safer to take a more southerly rumb line route. The Charterers were eventually able to prove that the great circle route had been suitable for safe navigation and that the extra steaming time was for the Owners account....

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