SHIPBROKING AND CHARTERING PRACTICE FOURTHEDITION SHIPBROKING AND CHARTERING PRACTICE By LARSGORTON Professorof Law and legalconsultant ROLFIHRE Advocate .. ARNESANDEVARN ShippingConsultantandTrainer ShipbrokerandSalel PurchaseAdviser FOURTHEDITION LLP LONI)ONNEWYORKHAMBURGHONGKONG L L O Y D ~ SOFLONDONPRESSL TD 1995 Lloyd'sof LondonPressLtd. Legal&BusinessPublishingDivision 27SwintonStreet LondonWCIX9NW USAANDCANADA Lloyd'sof LondonPressLtd. Suite308,611Broadway NewYork,NY10012.USA GERMANY Lloyd'sof LondonPressGmbH 59Ehrenbergstrasse 2000Hamburg50 Germany SOUTHEASTASIA Lloyd'sof LondonPress(FarEast)Ltd. Room1101,HollywoodCentre 233HollywoodRoad HongKong t)LiberHermods,Malmo,Sweden1980,1984,1990,1995 FirstEnglishedition1980 Secondedition1984 Thirdedition1990 Fourth edition1995 BritishLibraryCataloguinginPuhlicalionData Acataloguerecordfor thisbookisavailablefrom theBritishLibrary ISBN1-85044--971-6 \11nght-.rL'"cJ'\l'd.\it)partnfpuhlkationmay '\l{)!"edinaretric\alsystctn.ortranstnitted.inanyfonnorhyany nleans.electronic.mechanicaLphotocopying.recordingor otherwise.withoutthepriorwrittenpermissionof Lloyd\ ofLondonPressLtd. TextsetinlOon12ptTimesby TheEasternPressLimited Reading.l:3erkshire PrintedinGreatBritainh\ \ \HI{d.Br i d g L' n d.\ 1id -( j Lt !l) IIII i : PREFACE ThisbookwasoriginallybaseduponaprojectlaunchedbytheSwedish Shipowners'AssociationinconjunctionwithLiberHermods,aSwedish publisher.Thevolume(calledinSwedishBefraktning)wasintendedasa basictextbookforpersonsworkinginshipping(brokers,exporters,agents, shipowners,seaandlandpersonnel).Thefirsteditionof theEnglishversion wasrather different fromthe Swedish basic book. Thisfourtheditionhasbeenlargelyupdatedandrewrittenincertain parts, severaladjustmentshavebeenmadetoadaptittotheoccurrences of thelast fewyears.Wehavereceivedanumberof lettersgivingusnewideas,andwe havehadtheopportunitytodiscusswithseveralpersonsdifferentproblems which have arisen. We thank all those who have shared with us their experience inthefieldandwillappreciateitif readerswillcontinuetodosoandletus knowif therearepartswhicharesuperfluous,incorrect,toosuperficial,etc. PleasesendallsuchinformationtoLloyd'sof LondonPressLtd.,or directly totheauthorsatthefollowingaddress:LarsGorton,Instituteof Business Law,Stockholm School of Economics,Box 6501S-11383, Stockholm, Sweden. Wefeelthatitisnecessarytoemphasizethatthisbookisabasictextbook \vhichdoes not contain any legallysophisticated information on interpretation of clauses.Fromthethirdeditionwehaveintroducedsomeshortcasenotes whichare intendedtoillustrate certain principles.Our caseshavebeen mainly selectedfromEnglishandAmerican caselaw.The intentionisthatthereader shouldbegivenageneralideaof whatcharteringisaboutfromapractical economic-administrativeand,tosomeextent,legalpointofview.Onthe subjectsof thesale/purchaseof shipsandships'financingthereareexcellent moderntextbooks available,sowehaverestricted ourselves hereto examining onlysomeof thepracticalday-to-daymatters,andespeciallythosewhichare relatedtocharteringwork.If moreillustrativecasesarerequiredinafuture editionweshallgladlyintroducesuch.Also,if therearetopicswhichneed more elaboration,weshalldo our best to achievethat. LARSGORTOi'i.ROLl-"IHRE.ARNf SANDFVAR1' v INTRODUCTION Theshipping company hasundergoneagradualstructural change.In earlier daysashipping companywasinvolvedinalloperationsrelatingtoavessel: owning,manning,technicaloperationandcommercialoperation.Anumber of circumstanceshaveleduptoadivisionof functions:theowningfunction (includingfinancing);themanagementfunction(manning,technicalsuper-vision,spares,bunkers,etc.),andsometimes,theoperationalfunction(daily routinesconcerningthevessel);andthecommercialfunction(mainlythe employmentofthevessel).Thesefunctionsarenormallyconnectedwith particulardocumentationand,nowadays,thefunctionsareoftendivided between different companies, frequently in different countries. Oftenashipownerisestablishedinonecountry,whereforexamplethe financingmattersarehandled,butownsorcontrolssubsidiariesinvarious countrieseachwiththeirownfunction.Itislikelythefieetwillbeowned through single-vessel companies. Shipownersco-operatethroughdifferenttypesof jointventuresknownas shippingpools.Bythismeanscertainresources,suchasmanning,technical developmentormarketing,canbepooled.Furthersavingsaremadeifthe activitiesarechannelledthroughajointly-ownedcompanysituatedinatax haven.Inlinershippingaparticulartypeof cartelhasdevelopedknownas linerconferences during the hundred-year period. ItshouldbementionedthatboththeUSandtheEuropeanUnionhas legislationprohibiting certaintypesof co-operationagreements,andtosome extent alsoshipping activities may be embraced by suchrules. Theactivitiesofashippingcompanynormallystartwithashipbuilding contract(or memorandum of agreement(MOA) forthe purchase of asecond-handvessel).Thedocumentationforthefinancingofashipisroutinely extensive and comprises various documents, particularly in respect of financial security,suchastheshipmortgage.Upondeliveryof thevesselabillof sale willbehandedover fromthe seller tothebuyer.Themanagement functionis documentedinamanagementagreementbetweentheowner andthemanager spellingouttheduties.Aparticularoperationsagreementmaybe concludedbet\\'eentheo\vnerandtheoperator.Commercialactivitiesmaybe carried outbyabroker normally working inclose co-operation withthe owner vu Vlll INTRODUCTION butonanad hocbasisandwithoutparticularauthoritytobindtheowner. Sometimes a particular chartering agreement may give a particular organization authoritytoemploythevesselfortheownerandthecharteringwillthenbe performedbythisorganization forthe owner. Shippingisaninternationalbusinessandapersondealingwithchartering hastoworkwiththeconditionsprevailingdaybydayintheinternational freightmarket.Alargenumberof customsandrulesof thetradehavebeen established throughthe years all over the world,and strict business ethics have developedwhich shouldbeobserved in the professional shipping business. Chartering workisessentially aform of exchange of information.It isreally oneof thetrades wheretheright infonnation attherightmoment isessential tobesuccessful.Everyoneinvolvedincharteringacts,toalargeextent,asa collector,judgeanddistributorof information.Agreatdealof theflowof informationconsistsof,e.g.,notesonfixturesallovertheworld."Makinga fixture"meansthatthepartiesinterestedinaspecificseatransport,through negotiations,reach amutual agreement on alldetails inacharter. Thepartiesinvolvedinacharter dealare,ontheonehand,someonewho ownsoroperatesaship(owner,timecharteredowneror disponentowner), and,ontheotherhand,someonewhorequiresaseatransporttobecarried out(normallybutfarfromalwaysthecargoowner-inacharter-partythe counterpartof theshipowneriscalledthecharterer).Bothpartiesnormally negotiatethroughtheintennediaryofrepresentativescalledshipbrokersor booking agents.The owner of the cargo(often the shipper or the consignee)is frequentlyalso the charterer. Thedocumentdrawnupafterconclusionofthenegotiationsiscalleda charter-party(C/P),or if booking of generalcargoesisconcerned,abooking note(BIN).Inmost casesthebrokersrepresentingthe charterers draw up the originaldocuments, \vhicharc oftensignedby therespectivebrokers onbehalf of the parties (sometimes only withthe name of the brokers l.'AsAgents only"). Subsequently ~uponthereceiptof goods or their loading ontothevesseLahill ( ~ flading isnormallyissuedby or on behalf of the carrier. Charteringnegotiationsarecarriedoutdayandnightandnearlyalways underpressureof time.Frequentlyitdoesnottakemorethanadayfromthe timeashippingorderhasbeenplacedonthemarketuntilafixturehasbeen confirmed. The negotiations arenormally conducted over telephone,telex and telefax. Inpracticeandbylawallagreements,whether giveninwritingor by word of mouth, are with certain exceptions of equal value.As early as the beginning of the century the expression "our word isour bond" was coined among those dealingwithprofessionalcharteringinLondon.Forthesakeofevidence. ho\vever.itgoes\\'ithoutsayingthatitisappropriatetoha\'ctheagreements d ft'R'f'lJ"J (,.(Ink,..,ilJld 111/''1'111(/.'1011usifHOflld ('un/('(1111ill'h('Re/oc,.',\"!('}/1(Jilt'('01'/,1'"f(('I'I1(1(/1/ ,/(1"a/errslIhscriht..'rs10re{[ctupon. 22 INFORMATIONCHANNELS COOK OPEN FIRM 20/22000HSS GULF/EC MEXICO MAR 24/2APRIL 6.75FIO 5/1000 WHAT CAN UOFFER ORDER:Cookasking foroffers ona graincargo fromU. S.Gulf toMexico. ACCT COBELFRET OPEN FOR FOLL TIC TRIP 25/30.000 TONNER GRD/GLESS DELY PERU OR W.C.CENTRAL AMERICA PPT/20 MARCH CANCLNG TRIP REDEL DOP NCSA MAXLOA600/MAX BEAM 78' MAX DIST WL/TOP HC 26' NYPE 2,5ADDRESS PASTUS ORDER:Cobelfret open fortime chartering of avessel withcertainrestrictions regardingtype and size. Positions Thismeans,informationmentioningwhereand whenvesselsareexpectedto becomeavailable(open)fornewemploymentiscirculatedbyownersand operatorsasaguidetobrokersandcharterers.Theintentionisthat thesepositionlistswillgeneratesuggestionsforemploymentoftheships mentioned. HAVE INTERESTED UPTO 24MOS T/C PERIOD: THERMAICOS GULF-DEL EXYARD 6/87 T/D,FLUSH TWEENS ABT16000MT DW ON 8.90MABT 770.000 CUFTGRINHOLDS+ABT40000CUFTINBLEEDINGUPPER SIDE TANKS, 4HO/HA(12,16,17.60,16 ALLBY11.20M)---DERR 8x 15TSUP5TONS1x60TS(SER VINGHOLDS3,4)ABT 15KNTSONABT25TSFO+ 1.5DOGRAINFITTED/SELF TRIMMER/COTTON FITTED/C02 FITTED/LAKES FITTED OWSCANFIXAROUNDUSDLR7,500DELYSOUTHJAPAN LA YCAN25JUNE/20JULY PSEPROPOSE + AIl('\\'huilliillgi"/ooA.lII,\!.//lr('nlll/urn/cnr/orher.fin!\U\'cJ,1?t..'1I11d,//elll'/I (umprt'ht'I/\'I\c' ri('\('rtl"itJlli\ gircn,,(the lC\\'(/.slIPI'/t'111t'I1I{'d h,l'fhl'/I\Hlt'!"'"id!'uin!('!!:!,:1 hire/c\'c/ I, INFORMATIONNETWORKANDEXCHANGE NORDICWASA -----26.000 TCARGO CAPACITY OPEN BLSEA END MARCH. WHAT CAN YOU PROPOSE? POSITION:An owner informs his brokers when and where avessel(details about vessel already knowntothe brokers)will be opennext time. Market reports 23 Theseare circulatedbythebigshipbroking companiestoowners,charterers, otherbrokersandagents,givingaconcentratedpictureoftheprevailing situationforthedayor theweek.Bycomparing theconclusionsmade inthe various reports with one's own judgement of the situation it is possible to form afairlyaccuratepictureof thestateof themarketinthesectorsof particular interest.A comprehensive market report(seepage116fT.)contains comments on (primarily)thelargestmarkets,i.e.dry cargoandtanker,but also,forexample onthesaleandpurchaseof ships.Oftenthemarketdevelopmentwithinthe differentareasiscommentedon separately,forexamplefortheAtlanticor the Pacific,or for different commodities,for example grain, coal,ore, etc.Generally thedifferenttonnagesizesarealsodealtwithseparately.Thecommentsare illustrated by examples of recently made representative fixtures. Freight negotiations Themostimportantpiecesofinformationareexchangedduringcurrent negotiationsbetweenthepartiesinvolved.Inthesethepartiesparticipatein influencingthe stateof themarket themselvesand the information whichthey gather relating to thebusiness inquestion isas important asthe descriptionof theagreementreached.Forajudgementof thestateof themarketandthe influenceonthemarketdevelopmentthistypeofinformationisofequal importancewhetherafixtureisconcludedornot.Thevariouselementsof a chartering negotiation,i.e.general discussions,indications,offers and counter offers,etc.,willbedealtwithmoreextensivelyinthechaptercovering chartering routines. General information Other necessaryinformation concerns costs fortheoperation and despatch of vessels,forexample costsforthehandling of certaincargoes invarious ports, portduesand chargesassociatedwiththeship's calLcostsforcanalpassages. notesaboutbunkerprices,etc.Informationaboutcongestion,formationof ice.openingandclosingofcanalsandotherilnportantpassages.noteson 11laximumdraughtaJlo\vedinports.ships'cargohandlingequipmentand 24 INFORMATIONCHANNELS capacity fordifferent commodities,andavailability of labour constitute other valuablepiecesofinformation.Varioussuddenoccurrencesandgeneral economiccircumstanceshaveadecisiveeffectonthedevelopmentofthe international shipping market. Information centres London, New York and Toyko are of primary interest as infonnation centres but also Oslo,Hamburg,Paris and Piraeus play an important role inthe distribution of shippinginfonnation.Shipownerswhooperatetheirshipsworld-widearein daily contact also with shipping centres inmany other countries. The Baltic Exchange ThisisauniqueandveryoldinstitutioninLondonfortheexchangeof shippinginformation.Brokersandcharterers'representativesmeetthere regularlyforafewhoursaroundnoontodistributecargocircularsandto exchangeinformationinconfidence.Theprevailingstateofthemarketis discussed-formal freight negotiations may take place and fixtures be concluded on "the floor". The "Baltic" developedanew and important role as an international freight exchangecentrewhen,in1985,theBalticInternationalFreightFutures Exchange(BIFFEX)wasinaugurated.Onthisexchangetherearetwodaily sessionsfortrading freightcontractswhicharetobeperformed at somelater date(up totwoyears)againstaweightedfreightindex.Thisindex,theBaltic FreightIndex(BFI),reflectsthepresentmarketandexpectationsforthe market'sdevelopmentinthefuture.ByBIFFEXtradingowners"charterers and other parties on the shippingincluding,of course,speculators, may protectthemselves againsttheriskof andplayonthevolatilityof freightrates and timecharter hires.(Seepage117.) BIMeo BllvlCO(TheBalticandInternationalMaritimeCouncil)inCopenhagenis anorganizationdealingwithvariousmattersofinteresttointernational shipping.Thereisoneimportantdepartmentdealingwiththedesignand developmentof shippingdocuments.Manyof thecommonprintedcharter-party formshave inone wayor the other beenapproved byBIMCO.BIMCO mayalsoatanytimebeaskedtoprovideinformationon,forexample. congestioninacertainport.portduesandcharges,portregulationsand practice(Rulesof theTrade).etc.If somebodyinshippingcircleshasbeen repeatedlyandviolatingtherulesof thetradeorother\visehas heenacting irnproperlyhemaybeofficiallyreportedtofiIMeo.

JO25 20 IS INFORMATIONNETWORKANDEXCHANGE Shipping Market Indicators COAL HR JAPAN.PANAMAX GRAIN.l'S GULFAAA50-60.000 OWl ORE. BRAZIL. W EUROPE90.000 DWT . :.1......... . :.:'" .:...... . ..' ,'.... :...... . "t"""" I'" ""'''' I"" """'1" "" "" 'I' ""'''''' I""'''''' I' "'U"'" I""'"'''' I"'"'''' " 198119821983 SdwVmunlh 20 IS10 \IJU)O"D\Io; "l 1(11: '11,gO 70 1)(,

30 2(,1(, II'JS: 1984198519161987198&198919901991 ItA:! DRYCARGO- TIMECHARTER RATES

13 1b.OOO 0 ....T. )6 MONTHS 2C}.30.000 OWT.12 18 MONTHS 50-60.000 DII,r.)6 :l.toNTHS LAID UP TONNAGE 0 0 OR)'C ... RC,f) TA.'IlKRS 1993 25 35 30 20

10 1994

1510 r-'10 t If)) 'lO i RO70 NJ so -WJO

1(>Fhesegraphsarcgood('.\"{1111pleso(arailahlc101/7t'par/iesoperatinginfheshipping \1'urldTh'indicatorssholt'inglIlt'liP"and dou'nsor 'hedry-clIn;omarket0\'('1'(/period 01tin]('art' issued numlhly hy (Ju:l'lI-kn()\rn shiphrokillg ('onlpanyinLondon. 26 INFORMATIONCHANNELS Information network Itisof greatimportanceforshipowners,charterers,brokersandagentsto establish anetwork of contacts which catches allinteresting opportunities and bywhichadequateinformationisquicklytransmitted.Differentbrokers specialize in different markets or market sectors.By communicating with those brokerswhoarespecialistsinthe chartering of,forexample,grain,andwho havegoodanddirectcontactswiththebiggrainhousesinLondon,Paris, Hamburg andNewYorkrespectively,anowner cankeepwellabreastof the availabilityof grain cargoes world-wide.He canalsoget current information through the brokers about the freight levels that may at any time be interesting tothepotentialchartererand-whichisnolessimportant-hecanget information about the freights asked for by competing tonnage. In this way the owners follow continuously all the market sectors of interest. Basically,charterers findtheirinformation inacorresponding way.For them it isimportant to communicate with brokers who have contact with allowners operatingsuitableshipsandwhohaveaninterestinthecargoortradein question. Whathasbeensaidaboveisvalidprimarilyfortonnageoperatedinthe openmarket.Theinformationnetworkforlinertradinghasasomewhat differentset-up.Theindividualowner,thepoolorthelinerconference maintaining atrafficinacertaintrade,haveanumber of lineragentsaspart of theservice.Theseagentsdividetheareasgeneratingcargoesforbooking intogeographicalareasof interestwithinwhichtheindividualagentkeepsin contactwiththecustomers,eitherdirectlyorthroughsub-agentsand/or forwarding agents. The agents and the shipowner normally enter into aformal agreement,bywhichtheagentsareguaranteed certainrightsandbenefitsbut the agents at the same time agree not to book any cargo or otherwise work for the account of competing lines or outsiders (aso-called exclusivity agreement). Similaragreementsareusuallymadebetweenlineragentsandforwarding agents.Inprinciple,theliner owner cannot himself fixhistonnage with cargo fromthe area coveredbytheagreementwithout indemnifyinghisagent.This isalsothecaseevenif theagenthasnotworkedupor suggestedthebusiness ortheorderinthefirstplace.Bythissystemashipperorchartererwho presentshisshippingrequirementtoacontractedforwardingagentorliner agent does not cover the totalmarket,since his order willonly be presented to the liner owner inquestion. Information coverage Before we take acloser look at the role of the broker and the agent in chartering activitiesitmaybeusefultonlentiontheimportance of inforn1ationcoverage. Fromtheo\vncr'spointofvic\\;'oncn1ightperhapsthinkthatit\\'ouldbe convenientnottouseanintermediary,hutinsteadkeepadirectcontactwith INFORMATIONNETWORKANDEXCHANGE27 interested charterers.Such contacts do exist but then it isoften aquestion of a very limited market whereareasonably good view can be maintained through asmallnumber of contacts.Inthedry cargo market thisisnot possible since ownerswouldthenmissimportantand,oncertainoccasions,maybecrucial market information. Inorder to keepthe chartering staff assmallaspossible,andtoreducehis business inquiry expenses, the owner may even decide to channel all information throughone or twobrokersonly.Thesebrokerswillthen act asmore or less exclusiveagentsforthisownerandwillberesponsibleforthenecessary information,i.e.collecting,treatingand evaluatingmaterialto presenttothe owner.Thedisadvantagewithsuchanarrangementisthattheownergets information which istrimmed and important judgements are then made by the middle-man instead of by the owner himself. Theotherextremeistheownerworkingthroughaverylargenumberof broker contacts without especially favouring any of them.Possibly one would therebygetmostof theorderscirculatinginthemarketandthesameorder maybereceivedfromanumberof differentsources.Suchanarrangement nlay,however,resultintheworkintheowner'sofficebecomingslowand laborious.Another disadvantageisthat the owner may alsofindthat noneof thebrokerswillputintheamountof effortwhichanexclusivelyappointed broker issupposed to. Inprinciple,thesameapproachisapplicablefromthecharterer'spointof view,butatthesametimethecharterer'spositionissomewhatdifferent. Especially\vithrespecttotheimportant commodities,thecharterers dokeep afairlycareful check on tonnage available and freightlevelsthrough contacts betweenthemselves.For variousadministrativereasonsthey mayalsodecide toseparate their shipping department fromtheoriginalbody of the company and name ittheir exclusive agent withauthority toseektonnage forand to fix thecompany'scargoes.Achartererorshipperofgeneralcargoesmust communicateboth withliner agentsworking inthetrade concernedandwith brokers who are dealing with suitable tonnage in the open market. Means of communication Peopleengagedinday-ta-daycharteringworkhavetousevarioustechnical meansof communication.Veryoftenquick-actingpush-buttongadgetsare connectedto the telephoneswhichhavethemost frequenttelephone numbers programmed to international contacts, and these may be put through automati-callybymeansof acountry-ta-country codesystem.Byjust pressingakeya linewillbeopened automatically totheperson or company wanted. I n the shipowner's marketing departments, at the brokers and inthe shipping departments, working business opportunities, thenew chartering opportunities fortheday ..thepresentstateof themarketandthemarketdevelopmentare currently discussedonthebasis of theinflo\vof information.This face-to-face 28 INFORMATIONCHANNELS contactissoimportantthatpersonsworkingthesameoradjacentmarket sectorsoftenpreferto beseatedinthesameroom,although theenvironment maybeverynoisyfromtimetotime.Thetelephoneisthemostfrequently usedmediumforthedailydiscussionswithintermediaries andprinciplesand negotiations are frequently carried out over this instrument. Information about orders,positionlists,marketreportsandvariousother mattersareprimarily receivedbytelex,which isalso generally used during the negotiations. Detailsforcomprehensivenegotiationsandimportantprintedmaterial whichthepartiesinanegotiationhavetostudy,forexamplecontractforms andproformacharter-partiesarefrequentlytransmittedfromoneplaceto anotherbytelefax.Thisisprincipallyacopying machinewhichisconnected to another similar copier through the telephone network. This medium is more andmoreusedasacomparativelycheapandefficientsupplementtotelex communication. Letters, signed charter-parties, circulars and pieces of inform a-tion of alessurgent nature are,of course, distributedby mail. COMPUTERS The computer isnow inusealmost everywhere intheshipping world.Besides common usage computers are also serving marketing and ship operations/traffic departments.Inshipoperationsworkthecomputerisusedespeciallyfor storing information and itiscurrently updated with regard to ships'positions, cargoes carried and bunkers, etc. Theshipowners'technicaldepartments-incloseliaisonwiththetraffic departments-use computers forcalculationsof optimalspeedunder variable conditionsandfordrawinguptablesandgraphs,forexampleonspeedand consumption.Someshipownersoperatingbigfleetsof vesselsusecomputers tocalculatetheoptimumusageoftheentirefleetonthebasisofinputs ofcurrentlyupdatedinformationonships'positionsandcargo/contract requirements,thus facilitatingthescheduling andrescheduling work. In marketing departments various computer systems are used for calculations relatedto chartering work. The smalltable calculators equipped with memories andinterchangeableprogrammeunitsarefedwithcurrent data ondistances, particulars,variouscosts,freightrates,etc.,andsuchinformation, stored on magnetic tapes or discs,may berun together with astandard voyage programme,andtherebywithinlessthanaminuteproduceareadingora print-out of the pre-calculated voyageresult. Thecapacityoftablecomputersissufficientforindividualbrokersor shipping managerstohaveday-to-day calculationsbasedonalimitednumber ofshipsinstandardtypetrades.butformoreextensivedatastorageand dataprocessingshipo\vncrsandshipbrokersareno\vinvesting IIIcomputer\\ithhighcapacitystorageandprogranllllIng faci lit ies. COMPUTERS29 Acommon typeof terminalmayconsistof theprogramming and memory unitsbuilt intogether withascanner whereinputs and resultsare read,plusa built-inorseparatekeyboard-thewholepackageisof aboutthesizeof a medium size television set.This isnormally fedwith information and operated bytheindividualbrokerorbyasmallgroupof brokersworkingtogether withinthe same market sector.In such computer terminals alarge amount of data on positions, cargoes,particulars of vesselsand ports and general market informationmaybestored.Wheneverrequired,informationcanbe obtainedquicklyagainstvariousparameters.Inthiscaseeachterminalis individualandoperatedindependentlyfromeachother.However, informationdisplayedonthescannercannormallybepunchedoutona tapeorbeprocessedasanormalprint-outonpaperandmayalsobe sentdirectlybytelexortelefax. Thebigshipowningcompaniessometimeshaveaspecialcomputeror calculationsdepartment,wherethecompany'sbigcentralcomputerunitis operatedbydataprofessionals.Inthemarketing,scheduling,operations and technicaldepartmentstherearescannersandkeyboardsthroughwhich relevantinformationforeachdepartmentcanbeobtainedandnew informationcanbefedintothecentralstorageunit.The computer specialist can assistinmaking sophisticatedprograms forvarioussortsof employment calculations,foroptimizingtheschedulingofthefieet,foroptimizingfuel economyforindividualvesselsandvoyages,forcalculatingcargointake (consideringrestrictionsinportsandpropertiesof cargoes)withaviewto obtainingmaximumefficiencyandeconomy.Whenavoyageisfinishedthe actualresultmayberuntogetherwiththepre-voyagecalculationstofind differentialswhichwillagainbestoredtobeusedinfuturecalculationson similar employments. Therearealsoworld-wideinformationsystemsinusethatprovideuseful information,likeworld-widecoverageof varioustypesof important cargoes, positionsofallvesselsregisteredwith,forexample,Lloyd'sRegisterof Shipping,sothatashipbrokerwhoisasubscribertothesystemcaneasily getareadingonhisscannerof theactualstateof mattersheisimmediately concernedwith.He canhimself feedthesystemwithnewinputsbyusingthe keyboard,sothatthisnewor amendedinformation may immediately beread allovertheworld. Theusageof computersystemsasdescribedaboveisrapidlyincreasing andmakesworkmoreefficientinmanyareas.Beingprogrammedandfed withrelevantinformationthecomputercertainlyworksanddistributes informationveryquickly.H ~ w e v e r ,therearecertaindifficultiesinkeeping thesystemscompletelyupdatedwithrelevantinformationatalltimes. Brokersandshipownersareavoidingtoolaboriousandcostlyprogramming hyusingcomputersmainlyforbasicstandardvoyagecalculationsandbasic Heetschedulingontheprocessingside.whilethehighcapacitycomputer systemsfordatastorageanddistrihutionof infnnnationisextensivelyinuse. 30 INFORMATIONCHANNELS THETIMEFACTOR Let us look at some of the waysinwhichtime isrelevant: In ashipping company which operates world-wide the chartering work may continue day and night because of the time difference between many countries. Itisalsoimportanttorememberthatcompetitionimpliesthatbothowners andchartererscannormallychooseamonganumberof alternativebusiness partners.Thesemayalsobedomiciledatdiametricallyoppositeplaceson earth. During negotiationseveryofferandcounter-offerissubmittedwithatime limitforreplywithinwhichthepartyofferingor counteringiscommitted.If noreplyfromthecounterpartyisreceivedwithinthetimeallowedthenthe firstparty isfreetostart firmnegotiationswithanyother party.The time for reply is often short, i.e.anything from immediate reply up to acouple of hours. the partiestryto avoidstaying firmlycommitted overnight or over aweek-end.In abusiness opportunity where firm negotiations have started the partieswouldnormallytrytoconcludewithoutinterruptions,atleastwhere themain terms are concerned. Depending on the uncertainty when judging the state of the market at longer rangethereareseldomany fixturesmadeonaspot basisforshipmentstobe performedlaterthanintwoor threemonths'time.Amongotherthingsitis difficulttojudgethetonnagepositionandquiteimpossibletoforeseethe alternative chartering opportunities during anarrow period of time that liesa coupleof monthsahead.Linercompaniesdonotnormallyaltertheirtariffs without apre-notice.It isnot unusualto work with noticetimes aslong as six months.Eventheliner however,makereservationswhengiving freightquotationsalongtimeaheadof shipmentforpricechangesthathave tobeinaugurated at short notice because of unforeseencircumstances. THEROLEOFTHEBROKERANDTHEAGENT Again_thebasicdifferencebetweenlineroperationandtramptrafficmustbe remembered.In liner traffic jorH'arding agentsand lineragents play an "important roleincreatingthecontractof carriagebetweentheshipownerandthecargo owner. The changing structure of modern liner traffic has brought about increasing co-operation among the various carriers involved in transportation from the seller tothebuyer.Thuslargefreightforwardersoftenoffer"throughcarriage", performing as carriers throughout the whole transit. In tramp traffic the shipowner and the charterer willoftenbe brought together by brokers. Brokersandagentshaveinforn1ative_intermediaryandco-ordinating functionsalong thetransportation chain.Due totheir different\\lorkareas OJ1l? n1aydistinguishbetweens/Ziphrokersingeneralandthoseconcernedwith\a/(' ([nd purchase.port aKencyandlillcror loading lIKeIlCY. SHIPBROKERS31 Legally, a distinction may be made between different types of representation. Thus, an agent willnormally represent one principal and act forhim,whereas abrokershouldbringtogethertwopartiesandactforbothofthem.In shipping,theterminologyisnotveryclearlydefinedand doesnot seemtobe fullyinline with the legaltheory. Certain featuresshouldbedistinguished.Basically,an intermediary willact on behalf of,inthe name of and forthe account of,the principal.Normally, a shipbrokerdoesnothavetheauthoritytoconcludeanagreementforthe principal, but only to negotiate. The situation is quite different where abroker makes acontract in his own name but for the account of someone else.In such cases wefacean "undisclosed principal" situation. InafairlyrecentEnglishcasetheHouseof Lordsfoundthatonebroker involvedhadno"usualorapparentauthority"andthatapersonactingfor one of the parties lacked "actual as well as ostensible authority".(See Armagas Ltd.v.MundogasS.A.(TheOceanFrost)[1986]2 Lloyd's Rep.109(H.L.).) SHIPBROKERS As mentioned above, a shipbroker ordinarily specializes in a certain market or in a sector of a market. In chartering, an owner and a charterer have d.ninterest in the broker's sources of information, his particular knowledge, as well as his skill at negotiation.Normally, both parties willhave their own broker-the owner's brokerandthecharterer'sbroker.Thus,bothpartiesnegotiatethroughtheir representatives, who should do their best to preserve their respective principal's interests and intentions.Sometimes the broker willhave acertain authority to bind his principal but normally thenegotiations willbe carried out inclose co-operation between the principal and thebroker. When the agreement has been concluded the broker willoften obtain specific authority to sign the agreement, whichhedoessometimes agentonly",withoutmentioningthepartyor parties and sometimes Has agent for X". In the former case, certain legal problems may arise as to who has really entered into the agreement. An owner may choose todohisbusinessthrough onesoleconfidential or exclusivebroker,or hemay prefertoworkthroughalargenumberof brokers,whowillthenhaveequal possibilities to do the business. Sometimesthebrokerintroducesa"first-classcharterer"ora"first-class carrier"without mentioning aname.Should itappear later that the carrier or charterer isnotfirstclass,thebroker maybecome liableforthe consequences of hiswrongdescription.Bothpartiesmayhavegoodreasonstocheckon t heir counterparts.Some years agoacarrier entered into acharter-party with, ashebelieved,an entity namedShippers". When, after the voyage,the \)\vnerclaimeddead-freighthediscoveredthattherewasnoentitycalled IndianShippers",butthat thiswas only acollective descriptionforanumber Pt" shippers. 32 INFORMATIONCHANNELS Inamarketwithsuchwidelydifferingsectorsasthebulkmarketand 'tweendeckmarket onebroker cannotpossiblycoverallpartswithhisdirect connections.He willthen leavehisorder with other brokers who in their turn may have good connections with colleagues representing an interested counter party. A broker thus engaged in efforts to bring together an owner's confidential brokerwiththebrokerofasuitablechartererisengagedincompetitive charteringandiscalledacompetitivebroker.Cablebrokersarethosebrokers who mainly listorders circulated inshipping centres such as for example New York,andthendistributetheliststobrokersinothershippingcentres,for exampleLondon,Tokyo,Oslo or Hamburg.Thesebrokers may be described as tying together America and Europe and in this capacity their work is mainly that of acompetitive broker. Allbrokers endeavourtotietothemselvesanumber of principals(owners orcharterers)forwhomtheymayworkasoneofsomefewconfidential brokers. As broker it is,of course, an advantage to work on such a confidential basis,sincetherebythebrokermayhaveafairlysecureemployment,anda certain continuity inhisactivities. The function of the broker is to represent his principal in charter negotiations andhehastoworkforandprotecthisprincipal'sinterestsinthefollowing ways: (1)The broker should keep both the owner and the charterer continuously informedaboutthemarketsituationandthemarketdevelopment, about available cargo proposals and shipment possibilities, and should inthehestpossiblewaycoverthemarketforgivenpositionsand orders respectively. (2)Thebrokershouldactstrictlywithingivenauthoritiesinconnection withthenegotiations.Sometimesthebrokerwillhaveafairlywide framework --awidediscretion--- \vithinwhichtoworkwhencarrying outthenegotiations,withanabsolutelimitwhichmustnotbe exceeded. (3)Thebrokershouldinallrespectsworkloyallyforhisprincipaland shouldcarry out thenegotiations and other workconnected withthe charter scrupulously and skilfully. (4)The broker maynot withhold any infonnation fromhis principalnor givehimwronginfonnation.Normayherevealhisprincipal's business"secrets"andmaynotacttotheadvantageof thecounter party inthe negotiations inorder to reachanagreement. Afirst-classbroker shouldnotadvanceshipment or vesselproposalstohis principalif thebusinessisnotseriouslyfoundedorif theremaybedoubts ahoutthecounterparty'shonestyorsolvency.Thebrokershouldalso protecthisprincipal'sinterestsbypreventing orderswhichhavebeenworded \\Tongfullyorinconlplctclyfronlbeingsentuntiltheyhavebeencorrectedor conlpleted.l'hebroker alsohasadutytopreservehisprinciparsreputation. SHIPBROKERS33 Furthermore, the broker has a duty to take an active part in the ne"gotiations givingadviceandrecommendationswithrespecttoappropriateoffers,pro-posalsandcompromises.Heshouldalsotrytofindoutasmuchaspossible abouttheactivitiesof competitorsinordertosecureasmanyadvantagesas possible for his principal.A"mailbox" broker who only furthersinformation, offers,and counter offerswithout judging andprocessingthemcanhardly-and rightly so-count on ahigh degreeof appreciation fromthe owner or the charterer. Thebroker'spersonalityandtemperplayacertainrole,andsomewhat jokingly adistinctionisoftenmadebetween freightbrokers andcharter-party brokers.Theformeristhebrokerwhoisalwayssuccessfulincontracting somewhat abovethemarket level,but who willnever riskthelossof business duetothedetailsof aparticular charter-party clause.The latter willcontract at the actual market level,but he willalways try to phrase every single charter-party clausesothat itwillbeasadvantageousaspossibletohisprincipal.It mustbestressedthatacharter-partythat hasnotbeen carefullydraftedmay causeoneof thepartiesconsiderablelosses,andabusiness'sresultcanonly reallybe determined after the post-calculation. Abroker willhardlyeverhavefulllibertyto"gooutonthemarket"with anorder to fix best possible.Instead,hewillnormally have an authority to go outwithcertainspecifiedtennsandconditions,andif theyarenotaccepted by the counter party the broker must get new instructions. This will be repeated untilboth parties are in total agreement. Whenanowneroracharterer,havingreceivedanorderoraposition, demandsadditionalinfonnationorwishestolookmorecarefullyintothe possibilityof acharteragreement,heisregardedasbeingcommitted tothis broker.If the owner wants to open up negotiations to have his vessel employed forthecargomentionedintheorderitisregardedasgoodpracticetowork throughthebrokertowhomtheownerisalready"committed".Sometimes brokerstrytocommitaprincipalbyadvancingtheorderbytelephoneand tryingatthesametimetodiscussthepossibilityof theorder.Suchawayof procedure isnot regarded asafirst-classmethod. Normally, the privilege of choosing a broker channel is considered to belong totheowner.Butthenagainregardshouldbegiventofactorssuchas:Who firstpresentedtheorderor position?Whohasthemost"direct"connection? I s thebroker "taking achance"or doeshemake areferenceto an actualneed or aparticular position? Which of the brokers seems to have the best and most complete information and background with respect to the business in question? Considerationisalsonormally.giventowhetherapreviousconnectionwith thesamecustomerhasbeenmadethroughacertainbrokerwithrespectto :-;imilarcharters.Further personalrelationsnaturallyplay animportantrole. Inordertoenticeanownertoworkway"thecharterer'sbrokermay drawuptheorderinsuchawaythatit moreorthathehasa orparticularlygoodrelationshipwiththecharterer.Inthisconnection 34 INFORMATIONCHANNELS exclusivemeansthatabrokerwillworkaloneontheorderthusinstructed directlybythecharterer.Directmeansthatthereisnointermediarylinkvia anexclusiveagentorviaanotherbroker.Theordermayinsuchacasebe workedon inparallelby severalbrokers inthe sameposition.The expression localchartererssimilarlyindicatesageographicallycloseconnectionwith charterers.Theword friendsmayalsobeusedunderdifferentcircumstances by brokers to indicate aspecial crack(a special connection). Suchexpressionsmay,whenusedjudiciously,containusefulinformation. "Scampering"-which mayexist-willnormallybediscoveredratherquickly andbrokers(andforthatmatterownersandcharterers)whohavebecome knownaslessseriousorskilfulmayhavecertaindifficultiesinridding themselves of such areputation. Sometimestheowner and charterer,after having concludedone agreement throughabroker,may dosubsequentbusiness directlywitheachother.Such directbusinessmaybeaconsequenceof awishtoavoidpaying commission. Sometimes it happens that,for example, acompetitive broker has presented an order whichforsome reasontheowner's confidentialbroker has notreceived viahisdirectchannelor whichhehasnotobserved.Theownermaythenbe temptedtoinformhisdirectchannelabouttheorderthereby"committing himself"throughthischannelinsteadof givingtheotherbrokerachance. Such methods,too,are considered improper and not quite acceptable from an ethical point of view. Theshipbrokerworkingforachartererwillalsohaveasoneof hisduties, immediatelyafterthecharter negotiationshavebeenconcluded,tomakeout the original charter-party inaccordance withthe agreed terms and conditions. Anotherimportantdutyof bothbrokersistofollowuphowthetransport undertakingisperformedsothatthepartiesreceivecontinuousinformation, thatnotices are given correctly.thatfreightandhireisdulypaid.etc. Sale andpurchase broker Correspondingstandardsandcommercialethicsalsoapplytothesaleand purchase hroker astohisbehaviour during thenegotiations and howthese are carried out. The finalI1U!lnOrandunlof agreelnent and the follow-up of this type of commercialtransactiondiffers,however,fromthecorresponding activities in connectionwithchartering. Port agents Thetaskof theportagentistorepresenttheo\vnerandassistthevesselfor theowner's accountinorder thatshe\villhavethebestpossible despatch.The port agentshouldinallrespectsassistthemasterinhiscontacts\vithalllocal authorities. including harhour authorities. and he also has to procure provisions andothernecessities.comnlunicateordersandnlcssagestoandfrornthe SHIPBROKERS35 owners,etc.Itisimportantthattheowneremploysareliableandenergetic agent.In tramp traffic,as mentioned, loading and discharging willoften be for thecharterer'saccount.Thecharterermaythenprefertobeentitledto nominatetheportagentinordertofurtherhisinterests.Thequestionof appointinganagentmaythereforebeanimportantdetailinthecharter negotiations, since the parties have to establish whether the charter-party shall stipulateowner'sagentsor charterer'sagents.If thecharterer'sagentistobe appointeditmaybeanadvantagefromtheowner'spointof viewthatthe actualclausestates,forexample,"charterer'sagenttobenominated,butif actually appointed by the owner,the latter willdo so only by authority of and fortheaccountof thecharterer".If theownerhastoacceptthecharterer's agent he may protect his interests to a certain extent by appointing a husbandry agent,whowillthenassistthemasterandlookaftertheowner'sinterestsin order that the charterer's agent willnot act to the disadvantage of the owner. Liner agents Lineragentsformanimportantgroupofintermediariesinlinershipping. Whereas brokers and port agents seldom enter into written contracts with their principals,lineragentshaveoftenenteredintosuchwrittencontracts.There areevensomedifferent"standardlineragencycontracts".Alineragent functionsasakindof generalagentforthelinewithinageographicalarea. Lineragentsrepresenttheownersinmanydifferentways.Lineragentswill havecontactwithpossibleshippersandforwardingagentswithinthearea, they procure advertising about departures and arrivals,and normally they will alsodoalltheworkforthelineotherwisecarriedoutbyaportagent.The bookingwillnormallybemadewithoutspecialnegotiationsthrougha quotationinaccordancewiththetariff inforce,andassoonasthebooking hasbeennotedandconfirmedbytheagentthereisanagreementonthe carriageofgoodsandabookingnoteisnormallyissued.Theagentwill normallyhave,before everyloading occasion,an allocation of spacefromthe ownerwhichhemaybookupwithoutanyfurtherauthorizationfromthe owner.Certain cargoes of adangerous typeor unusualgoods,heavy lifts,etc., arc.however,often excepted,meaning that forsuch cargoesapprovalmust be obtained fromthe owner or the lineinevery single case. Brokers and agents connected with owners ThoughsomebrokersarewhoJlyindependentitiscommonforatleastthe largeshippingcompaniestohavewithintheirownorganizationsseparate departmentsworkingasagents(charteringaswellassaleandhrokers.andevenforwardingagents.Similarly.aspreviouslymentioned. t'reightfor\\'ardersnO\\'adaysfrequentlygobeyondtheirtraditionalfieldand engagethelnselvcsinofferingoceancarriage.Largebrokersarcalsodirectly 36 INFORMATIONCHANNELS involvedinowning or operating fleets,etc.Having aliner agent and abroker inthe same company isnot always aguarantee that an order givento the liner agentwillalsobebrought out intotheopenmarket,or viceversa.Whenthe owner andbroker areinthesamecompany certainordersmaybeprevented fromgoing out into the open market andinsteadthey willbereservedforthe "house" tonnage, if the broker isnot fullyindependent. BROKERAGE Thebrokerwilloftenhaveverylimitedinstructionsandoftenhardlyany expressorclearinstructionsatall.Anumberof charter-partiesof standard type contain aprinted text on brokerage but leave it to the parties to fillinthe percentage,forinstance,Gencon, cl.15: "A brokerage commissionattheratestatedinBox20onthefreightearnedisdueto theparty mentionedinBox20. Incaseof non-executionatleast1/3of thebrokerageontheestimatedamountof freightanddeadfreighttobepaidbythe OwnerstotheBrokers asindemnity forthe latter'sexpensesandwork.Incaseof morevoyagestheamountof indemnitytobe mutually agreed." Except for particular agency fees,agents and brokers will receive remuneration calculated as a certain percentage of the gross freight figure,and the intermedi-aries involved willnormally be entitled to remuneration only when the charter agreement, the sale and purchase agreement or the booking has been concluded and/orconnectedcontractshavebeensigned.The andtheagent's income isthus totally dependent on the freightmarket and the sizeof the deal involved.Such size may bemeasured interms of the cargo quantity,the length of the charter period or the price of the vessel.Normally every broker involved ina charter deal willget an amount corresponding toIf/oof the gross freight. Insaleandpurchase dealsthefigurevariesbut isoften1-20/0.The liner agent w111normallyget3-5%.Portagentswill,however,asindicatedabove,be rellluneratedbya fixedagency feewhichvaries considerably between different ports and also depends on the tonnage of the vessel. Unless otherwise agreed(which is very rare in practice) such remuneration-generallyreferredtoasthe"commission "-is paidbytheowner andthetotal actualpercentageforacertaindeal,thetotal comnlission,shouldbespecified inevery order presentedto the owner. Thecommissionpaidtoabrokeriscalledthe"brokerage".Thisisthe broker'sremunerationforhisworkandcosts inconnection withhisactivities. The brokerage willcover his expenses and givehimanetprofit.Asl hecommission or brokerage isalways calculated on apercentage of thegross freightand.depending on\,\-'hatisagreed during thenegotiations,sometimesa so-calledballastbonus and demurrage(whichwillbedealtwithlater on)may INSURANCEFORINTERMEDIARIES37 alsobethebasis of commission,inadditionto the grossfreightor the charter hire.Thus itiscommon inthe dry cargo sector that everybroker getsIWoand therelevantfreightcalculationswillnormallybebasedon2f/oor3f>;o depending on the number of brokers involved.It is,however,not uncommon forthetotalcommissiontobehigher,butinthosecasesaso-calledaddress commissionwillalmostinvariablybeinvolved.Inmanytradesandwithtime chartersitisusualthatpartof thecommissionis"returningtothehouse" (address)whichthusinpracticereducesthefreightorhiretobepaid.Such addresscommissionsmaybeupto50/0(heavyaddress).Thereasonforthis systemissometimessaidtobethatthecharterers'shippingdepartmentfor book-keeping purposes mustshowsomekindof incomefromtheiractivities. Statetradingcountriesregularlyincludea50/0addresscommissionintheir orders. It is also quite common to findthat a charterer's broker, who is working onanexclusivebasisforhisprincipal,willbeentitledto2f!obrokerage.As mentioned,the owners willpay all commissions and willtherefore try to cover such costs bya corresponding freightincrease. Agreatnumberofcasesillustratehowthebrokeragefeeshouldbe determinedandhowitshouldbepaid.Thus,atrandom,Howard Boulder & Partners v.Manx IslesSteamshipCo.(1922)12Ll.L.Rep. 93,137,illustrates a case wherethebroker wasnot entitledto anybrokerage fee,when acharterer usedhisoptiontopurchaseavessel.Thebrokerhadnotcontributedtothe separatepurchase agreementreached,sincethepurchaseinvolvedadifferent pricetothat whichhad beenoriginally agreed.On theother hand,inanother case,thebroker wasentitledtoa commissionalthough the buyer wasnot the sameonethathadbeenintroducedbythebroker.Thebroker'sworkwas regardedas having been decisive for the purchase. Severallegalproblems mayariseinconnection withthe activitiesof agents, aswellasthose of brokers. INSURANCEFORINTERMEDIARIES Continuing structuralchangeintheshipping industry hasledalsoto changes forbrokers,portagentsandotherintermediariesinshipping.Thereisa tendencyforintermediariestobemoreofteninvolvedindisputes.Aconse-q uenceofthisisthatneedforinsuranceforintermediarieshasincreased. P.&I. clubsforshipbrokers,port agents,managersand other intermediaries inshipping have been foundedand these clubs seemtobe wellestablished asa necessary complement tothetrapitionalP.&I. clubs. CHAPTER5 MARKETING ATTITUDESINNEGOTIATION In essence, the purpose of marketing shipping services is to inform the business community of one's presence and ability_In thisconnection it isimportant to recognizethedifferencebetweenalinercompany's competitivesituationand the situation for an owner working in the open market. Shipsoperatedinthespotmarket,forexample,mustcomplywiththe demandsof sizeandtypeandmustalsobesuitableinotherrespectsforthe intended cargo.Furthermore, the vesselmust be available in the right position at the right time and askfor afreightlevelwhich iscompetitive in comparison withwhat other interested parties may offer.If the employment in question is for alonger duration on time charter or contract basis thenthe importance of anowner'ssolvency,reliabilityandreputationforgoodperformancewill increase correspondingly. For theliner owner whoisworkingwiththesame freighttariff inthesame tradeand maybe evenwiththesamefrequencyof sailingsashiscompetitors, regularityandreliabilityarethemostimportantmarketingfeatures,i.e.he mustkeeptotheadvertisedscheduleswithoutsuddenchangesanddelays. Other features are short transit times, good care of the cargo, efficient ha'1dling of cargobookings,documentationandsettlementof cargoclaims.Further meansof strengtheningthecompetitivepositioncanbebyofferingpackage solutionstotransportproblems,suchasthearrangementofdoor-to-door transport.0 Theowners,likethecharterers,willcreateforthemselvesareputationin shipping circles whichisvery quickly spread internationally.In the day-to-day exchangeof informationcertainexpressivewordingsareusedlike"first-class people","unprofessionaloperators","'hardtraders","difficult"or"tricky negotiators","goodperformers",etc.Noone cancount onbeingreferredto as first class without having earned such a classification in the firstplace.Being labelled orevenindicatesthatthepartyinquestionis difficulttodealbylackof flexibilityorevenlackof knowledgeof the tradeandforthelatterdenominationevenatouchof dishonesty.Thesanle badimpressionisgivenbythelabel whileareputationasahard 38 MARKETINGANDRELATIONTOTHECUSTOMER39 trader shouldnot at allbeadisadvantageif itisconnectedwith an otherwise goodreputation where performance isconcerned.On the other hand,it isless advantageoustobeknownasonewhosqueezeshiscounterpartyonevery occasion whenever possible. MARKETINGANDRELATIONTOTHECUSTOMER F or the owners working inthe open market it isimportant firstof all to secure suchbrokercontactswhichcancover jointly,ascompletelyaspossible,the market sector of interest.It isnot only aquestionof findingbrokers whocan supplyrelevantand completeinformation,but thebrokers must alsoprovide the ability to present and offer the ships operated by the owner and his services inaseriousmanner and insuch awaythatthe shipswillbepreferable tothe charterers. Whenever an owner isdiscussing an order with a charterer it isin facta new opportunitytopresenttothecompanytheservicesthatareoffered,andthe type of engagement the owner is interested in. These measures are supplemented bypersonalvisitstocharterersandorganizationswhomightbeinterestedin servicesthattheowners canoffer.Of courseitisalsoimportant tomaintain andtodeepenthecontactswitholdcustomers,forexamplethroughvisits. Thisisbeingdonebothregularlyasamatterof routine,andinconnection withcurrentbusinessdeals,anditiscustomaryonthoselatteroccasionsfor theownerstobeaccompaniedbythebroker whoassistedinworkingupthe businessororiginallymadethecontact.Advertisingmaterialsuchasfolders, etc.,havesofarbeenrathersparinglyusedbyownersworkingintheopen nlarket.Thismaterialisusually sent to already existing contacts and has been usedcomparativelylittleinordertoobtainnewbusiness.Itseems,however, thatthetrendistoworkmorefullywithsuchdirectmarketingaidsinthe future. Returningtothequestionof showingone'sabilities,thecharterers willget toknow the owners during discussions and negotiations but, above all,during theperformance of the charter. Then the owner's management, employees and representatives under different circumstances willbeput under stressto prove theirabilitytocarryoutthetransportundertaking.Itisof equalimportance tosolveallproblemsarisinginthespiritof goodco-operationandflexibility andinan efficient waytothesatisfactionof bothparties.The standard of the shipsandtheirequipmentis,ofcourse.alsoofgreatimportanceinthis connection.Breakdowns of machineryduetofaultymaterialor bad mainten-ance arenotgoodmarketing features. Fromtheearly1990sweseeanincreasingnumberof first-classowners \\"hoendeavourtoobtainaso-called""QualityClass"withtheclassification acertificateof highstandardforbothshipsandmanagement (QualityAssuranceandQualityManagement).Bothcharterersandowners 40 MARKETING Two in One! The DOe Fleet of Combined TankerlDry Cargo Vessels: Identical sisters; deliveredbyVander Giessen-de Noord B. V.1991. Classed Lloyd's Register of Shipping +100 AI; IceClasslA; UMS Double bottom and double sides throughout; SPECIAL DRYCARGO PARTICULARS "tainles.s steelbox-shaped cargo holds.Dimensions:I x bx h =13,6 x 13,0 \9.7m. 4 steel hydraulicall}' operated. Dimensions:13,6 x 13,0 m. Bale capacityholds 1+2+3+4 =1680+1732+1732+1732 =6876 cbm. Container capacit}holds120 TEll. on deck107 TEt. total 227 TEU. HoUambient mechanical ventilation byfansup to 70 "C. About11.6 airchanges per hour. 2 Hagglund deckcranes positioned on starboard side. Each20mtons SWL. Min. outreach 3m, max.out reach 20m.Cargo spotter fitted. l"in!: o"n crilnr-. rBr lu:.dinl( ur .. oodputpinluIht' huud stlllinh..,-,It'tJ t'oHrl'd c.trJ!U. .\IA RKETING:OH'nersissuehrochurl"fJlld /1(JlI1I'I1/('(.,ffl\IhidlIC'clflin',(/lIddc'{clll,,t/lt!/li llieir\"(,.\.\('/, MARKETINGANDRELATIONTOTHECUSTOMER MlSTALCOR MlSTALHENAMlSTALNATI MAINPARTICULARS: Deadweight Summer Draught Summer S. W. Length over all Lengthbetweenp.p. Breadth moulded Depth moulded Tanks-HoldslHatches 6.209Mtons m 99,55 m 93,30 m 17,00 m 8,50 m 4+1tanks, 4/4holdslhatches SPECIAL TANK PARTICULARS Tanks NoI. 2,3 and 4 of stainless steel. Tank h.'ltchco\'ers with cellular splash walls coated withIntershield epoxy.Tank No5, sloptanks and cargo pipes coatedwithIntergardTank cargo capacity. tanks No 1+2+3+4+5 at 98 b tI'.l '2 . "'0 fr, .. iohtt""hnr)a;d .... ......"'E- II"-- ,'-'e- I\,l.'-;l/"-- tI REPORTING115 Consequentlyafixturecovering150,000tonsdeadweightfromtheGulf to WesternEuropemadeatWS75meansthattheownerswillbepaidafreight equalto750/0of thefreightpertonenumeratedintheWorldscaletableforthe tradeinquestion.Onecannot,however,directlystatethatanothershipowner whohas fixedat the same timeacargo of thesame sizein another trade at WS 80hasobtainedahigherfreight,sincethevariouscost elements(bunkers,port costs and daily costs)in practice have a different impact on the different voyages. Itmustbestressedthattheassumeddailycostof$12,000usedforthe calculationsbasedonthestandardshipisonlyafictionalfigurewhichdoes not take into account, for example, the varying cost levels between the different countries.WS100isthereforenottherate at whichallshipsof theworld of thesamesizeasthestandardshipwillcoverthedailyandvoyagecostsbut WS100 should be regarded as amathematically convenient mean level. Efforts are made to try to keep the basis for the calculations fairly closely in linewithactual conditionsandthebasicitemsareupdatedonceayear when the tables are revised.The changes affecting the tables are related to port costs and bunker prices, while the fixedhire element of $12,000 ismaintained.Since theWSratesmaybetranslatedintodailyresults,thetankerownerscan produce aseries of voyage calculations for their different sizes of ships for the mostfrequenttradesandtabulatetheresults.Theyhavethenavailablea numberof differentWSratesforeachtradeandcan judgeandevaluatethe various alternative employments offered. REPORTING Finally, we shall add some comments on how fixtures made in the open market :lrereportedandinterpreted.Itisimportant thatour pointson thereporting, investigatingandnegotiationphasesarestudiedtogetherwithChapter10, below.Legalproblemsmayariseinconnectionwiththenegotiationandthe making of acontract andweillustrate some of theseproblemsinChapter10. The information that willbe given about every single fixture is normally sparse. Neverthelessitwillcontaintheminimumof detailthatisrequiredtosupply an interested party with sufficient information about the prevailing freight level inacertaintrade,forexample.Theinformationalsoshowshowaspecific fixture will compare with other fixtures made, the general activity in the market (manyoronlyafewfixtures),therateof freightandinthiscasealsothe chartering conditions for competing ships. Further, the reports give information about the development of the market over-allor in certain sectors.Thereupon thedetailsgivenmaybeusedbythosewhoareinterestedinmaking arough calculationor estimation of theexpectedvoyageresultforareported vessel. Wcsho\\."atpage116fr.sometypicalexan1plesof marketreportscovering rcpresentativt:fixturesPCI'acertainJay.Largelyboththedrycargo 116 FREIGHTCALCULATIONS Fix where you can OCTOBER has startedwith competi-tionbetvveen the ulcc and vlcc sectors. Withthe current position lists show-ing 68v leesand uIccs available, the 300,000tonners have had to compete with vlccs and take part-page90fl. 210 THEVESSEL211 not know beforehand what cargo they will carry with the ship and which ports andareasshewillvisitandtheycannot,therefore,asinvoyagechartering, acceptonly afewmain details about her. Inadditiontothegeneraldataaboutthevessel(name,callsign,yearof build,nationality,draught,lengthanddepth,numberofhatches,etc.) charterers, especially whentheship willbe chartered foralong period,need a more detailed description and usually they therefore get copies of the so-called GeneralArrangementplan(GA-plan)andother plansthatgiveinformation abouttheshipandher construction.Sometimesitisalsoimportant toknow the vessel's ice class and to have information about special certificates. Cargo capacity The ship's cargo capacity is described in the same way as in the voyage charter-party(cf.page179), i.e.inmost cases by deadweight andlor cubic capacity.In somecasesitisnecessarytohaveadditionalinformationaboutthevessel's cargocapacity,forinstance,howmany containersshecantakeon deckand under deckrespectively. Thetime charterers dispose allcompartments which canbe usedfor cargo. In the Linertime formthis is expressed inthe following way: LINERTIME 9.Cargo Space Thewholereachandburdenof the Vessel,including lawfuldeck-capacitytobeat the Charterers'disposal,reservingproperandsufficientspacefortheVessel'sMaster, Officers,Crew,tackle,apparel,furniture,provisions and stores. Whentheshiphasaccommodationforpassengersitisusuallyalsostated whetheror notthecharterershavetherighttousethisspaceandwhatextra payment per passenger per day owners are entitled to. Asinformation about thevessel'scargocarrying capacity isveryimportant forthetimecharterers,theownersmustdeclarethesedetailsascorrectlyas possible.Incorrect information about thecargocarrying capacitymay lead to deduction of the hire or,whenthedifference isbig,the charterers may alsobe entitled to cancelthe agreement and claim damages. Speed and bunker consumption Asthechartererspayhirepertimeunit,thevessel'sspeedcapabilityand bunkerconsumptionareessentialforjudgingtheoperatingpotentialof the vessel.Thespeedcapabilityandbunkerconsumptionstatementsinthetime charter-partiesareusuallyconnectedtocertainweatherconditionsandtoa certaindraught.Also.thetypeoffuelisimportant.IntheLinertinleforrn (prearnble)itissaidthatthevesst:lshallbt: 212 THETIMECHARTER-PARTY ' ~ f u l l yloadedcapableof steamingaboutthenumberof knotsindicatedinBox13in good weather and smooth water on a consumption of about the number of tons stated inBox13per 24hours". Considering the fact that vessels often are ordered to proceed with "economi-calspeed"or"Iowspeed"itisrecommendedthatnotonlyconsumptionon fullspeedisstatedinthecharter-party.Alsoconsumptionon"economical speed" and "low speed" should be agreed. This type of clause is,inaccordance withEnglish law,not understood to be awarranty of theship'sspeedcapability andbunker consumption during the timecharterperiod.TheLinertimewordingandother similarwordingsonly warrant thatthevessel,during thenegotiations and at thetimeof the fixture, iscapable of steaming the stated speed on the stated consumption, etc.As the charter periodismorein1portantforthetimechartererstheyoftentryto get the speed described as "average service speed" or similar. In the modem tanker time charter-party forms the technique in construing the Speed clause is usually moreliketheoneusedinavoyagecharter-party.Theweatherriskatseais hereputontheownersandthespeedisdescribed,sometimes ingreatdetail, like e.g.in Article 24of Shelltime 4. "Detailed Description and Perfonnance 24.(a)Owners guaranteethat thespeedandconsumption of the vesselshallbeas follows:-A verage speed inknots Laden Maximum average bunker consumption main propulsion- auxiliaries fueloil/diesel oilfueloil/dieseloil tonnestonnes 302 [] [] 303 304 305 306 Ballast307 Theforegoingbunkerconsumptionsareforallpurposes308 except cargo heating and tank cleaning and shallbepro-rated[] betweenthe speeds shown.[] Theservicespeedofthevesselisknotsladenand310 knotsinballastandintheabsenceof Charterers'orders[] tothecontrarythevesselshallproceedattheservicespeed.[] Howeverif morethanoneladenandoneballastspeedare[] showninthetableaboveCharterersshallhavetherightto[] order thevesselto steam at any speed withintherange setout[] inthe table(the"ordered speed").[] If thevesselisorderedtoproceedatanyspeedotherthan314 thehighestspeedshowninthetable.andtheaveragespeed[I actually attained by the vessel during the currency of such order[] exceedssuchorderedspeedplus0.5knots(the"maximum[] THEVESSEL213 recognisedspeed"),thenforthepurposeof calculatingany] increase or decrease of hire under this Clause 24the maximum] recognisedspeedshallbeusedinplaceof theaveragespeed] actually attained.[] For thepurposesof thischarter the"guaranteedspeed"at319 any time shall be the then-current ordered speed or the service[] speed,asthe case may be.[] The averagespeedsandbunker consumptionsshallforthe321 purposesof thisClause24becalculatedbyreferencetothe[] observed distance frompilot station to pilot station on all sea[] passagesduringeachperiodstipulatedinClause24(c),but[] excluding any time during which the vessel is(or but for Clause[] 22(b)(i)wouldbe)ofT-hireandalsoexcluding"Adverse[] Weather Periods", being (i) any periods during which reduction[] of speed isnecessaryfor safetyincongested waters or inpoor[] visibility(ii)any days, noon to noon, when winds exceed force[] 8 on the Beaufort Scale for more than12hours.[] (b)If duringanyyearfromthedateonwhichthevessel327 entersservice(anniversarytoanniversary)thevesselfalls[] below or exceedstheperformance guaranteed in Clause 24(a)[] then if such shortfall or excess results.[] (i)from areduction or an increase in the average speed of330 the vessel,compared to the speed guaranteed in Clause[] 24(a),thenanamountequaltothevalueatthehire[] rateof thetimesolostor gained,asthecasemaybe,[] shall be deducted from or added to the hire paid;[] (ii)fromanincreaseoradecreaseinthetotalbunkers consumed, compared to the total bunkers which would havebeenconsumedhadthevesselperfonnedas guaranteedinClause24(a),anamountequivalentto thevalueof theadditionalbunkersconsumedorthe bunkers saved, as the case may be, based on the average price paid by Charterers for the vessel's bunkers in such period,shallbedeductedfromoraddedtothehire paid. Theadditiontoordeductionfromhiresocalculatedfor laden and ballast mileage respectively shall be adjusted to take intoaccountthemileagesteamedineach.suchcondition during Adverse Weather Periods,by dividing such addition or deduction by the number of miles over whichtheperformance hasbeencalculatedandmultiplyingbythesamenumberof milesplusthemilessteamedduringtheAdverseWeather Periods, in order to establish the total addition to or deduction fromhire to be made forsuch period. Reduction of hire under the foregoing sub-Clause(b) shallbe without prejudice to any other remedy available to Charterers. [] 333 [] [] [] [] [] [] [] [] 339 [] [] [] [] [] [] [] [] 342 [] [] (c)CalculationsunderthisClause24shallbemadeforthe344 yearlyperiodsterminatingoneachsuccessiveanniversaryof[J thedateonwhichthevesselenterss e r v i c e ~andfortheperiod[1 betweenthelastsuchanniversaryandthedateof ternllnalionlI of this charter if lessthan ayear.e!shallhavelibertytocarryothercargo196 forOwners'benefitandaccordinglytoproceedtoandloador197 dischargesuchothercargoatanyotherportorport!>whatsoever.198 backwardsor forwards.althoughinacontrarydirectiontooroutofor199 beyondtheordinaryroute.IntheeventoftheMasterelectingto200 proceedwithpartcargounderthisClausefreightshallinanycase201 bepayableonthequantitydelivered.202 (4)IfatthetimetheMasterelectstoproceedwithpartorfullcargo203 underClause3.oralterthp.Vesselhaslefttheloadingport.orthe204 262APPENDIXI PART11"Gencon" Charter (As Revised1922 and1976) Including"F.I.O."Alternative.etc. lastoftheloadingports.ifmorethanone.itappearsthatfurther20517. performanceofthecontractwillsubjecttheVessel.herMasterand206 creworhercargo.towarrisks.thecargoshallbedischarged.orif207 . thedischargehasbeencommencedshallbecompleted.atanysafe208 portinvicinityoftheportofdischargeasmaybeorderedbythe209 Charterers.IfnosuchordersshallbereceivedfromtheCharterers210 within48hoursaftertheOwnershavedespatchedarequestby211 telegramtotheCharterersforthenominationofasubstitutedlscharg- 212 ingport.theOwnersshallbeatlibertytodischargethecargoat213 anysafeportwhichtheymay.intheirdiscretion.decideonandsuch214 dischargeshallbedeemedtobeduefulfilmentofthecontractof215 affreightment.Intheeventofcargobeingdischargedatanysuch216 otherport.theOwnersshallbeentitledtofreightasifthedischarge217 hadbeeneffectedattheportorportsnamedintheBill(s)ofLading21 S ortowhichtheVesselmayhavebeenorderedpursuantthereto.219 (5)(a)TheVesselshallhavelibertytocomplywithanydirections 220 orrecommendationsastoloading.departure.arrival.routes.ports221 ofcall.stoppages.destination.zones.waters.discharge.deliveryor222 inanyotherwisewhatsoever(includinganydirectionorrecom- 223 mendationnottogototheportofdestinationortodelayproceeding224 theretoortoproceedtosomeotherport)givenbyanyGovernmentor225 byanybelligerentorbyanyorganizedbodyengagedincivilwar.226 hostilitiesorwarlike orbyanypersonorbodyactingor227 purportingtoactasorwiththeauthorityofanyGovernmentor228 belligerentorofanysuchorganizedbodyorbyanycommitteeor229 personhavingunderthetermsofthewarrisksinsuranceonthe230 Vessel.therighttogiveanysuchdirectionsorrecommendations.If.231 byreasonoforincompliancewithanysuchdirectionorrecom- 232 mendation.anythingisdoneorisnotdone.suchshallnotbedeemed233 adeviation234 (b)If.byreasonofor,ncompliancewithanysuchdirectionsorre- 235 commendations.theVesseldoesnotproceedtotheportorports236 namedintheBill(S)ofLadingortowhichshemayhavebeen237 orderedpursuantthereto.theVesselmayproceedtoanyportas238 directedorrecommendedortoanysafeportwhichthe. Ownersin239 theirdiscretionmaydecideonandtheredischargethecargo.Such240 dischargeshallbedeemedtobeduefulfilmentofthecontractof241 affreightmentandtheOwnersshallbeentitledtofreightasif 242 dischargehadbeeneffectedattheportorportsnamedintheBill(s)243 ofLadingortowhichtheVesselmayhavebeenolderedpursuant244 thereto245 (6)Allextraexpensesins':rancecosts)involvedindischarg- 246 ingcargoattheloadingpo,'(:r.nreach,ngordischargingthecargo247 atanyportasprovidedinClauses4and5(b)hereofshallbepaid248 bytheCharterers3ndorcargoowners.andtheOwnersshallhave249 alienonthecargolorallmoneysdueundertheseClauses250 GENERALICECLAUSE251 Portofloading252 (a)IIItheeventoftheloadingportbeinginaccessiblebyreason01253 Icewhenvesselisreadytoproceedfromherlastportoratany 254 timeduringthevoyageoronvessel'sarrivalorincasefrostsetsin255 aftervessel'sarrival.theCaptainforfearofbeingfrozeninisat256 libertytoleavewithoutcargo.andthisChartershallbenulland257 void.258 (b)IfduringloadingtheCaptain.forfearofvesselbeingfrozenin.259 deemsitadvisabletoleave.hehaslibertytodosowithwhatcargo260 hehasonboardandtoproceedtoanyotherportorportswith26' optionofcompletingcargoforOwners'benefitforanyportorports262

delivered(inproportioniflumpsum).allotherconditionsasper267 Charter.268 (c)Incaseofmorethanoneloadingport.andifoneormoreof269 theportsareclosedbyice.theCaptainorOwnerstobeatliberty270 eithertoloadthepartcargoattheopenportandfillupelsewhere271 fortheirownaccountasundersection(b)ortodeclaretheCharter272 nullandvoidunlessCharterersagreetoloadfullcargoattheopen273 port.274 (d)ThisIceClausenottoapplyintheSpring.275 PorIofdischarge276 (a)Shouldice(exceptintheSpring)preventvesselfromreaching277 portofdischargeRec'!iversshallhavetheoptionofkeepingvessel278 wait;nguntilthere-openingotnavigationandpayingdemurrage.or279 oforderingthevesseltoasafeandimmediatelyaccessibleport280 whereshecansafelydischargewithoutriskofdetentionbyice.281 Suchorderstobegivenwithin48hoursafterCaptainorOwners282 havegivennoticetoCharterersoftheimpossibilityofreachingport283 ofdestination.284 (b)IfduringdischargingtheCaptainforfearofvesselbeingfrozen285 indeemsItadvisabletoleave.hehaslibertytodosowithwhat786 cargohehasonboardandtoproceedtothenearestaccessible287 portwhereshecansafelydischarge.288 (c)Ondeliveryofthecargoatsuchport.allconditionsoftheBill289 ofLadingshallapplyandvesselshallreceivethesamefreightas290 if shehaddischargedattheoriginalportof destination.exceptthatIf791 thedistanceofthesubstitutedportexceeds'00nauticalmiles.the292 freightonthecargodeliveredatthesubstitutedporttobeincreased293 inproportion.294 APPENDIX11 LINERTIME 264APPENDIX11 I.ShipbrokerTHEBALTICANDINTERNATIONALMARITIMECONFERF.NCE DeepSeeTimeChertet'(80.Leyout1174) CODENAME: "LlNERTIME"PARTI 2.f'laceanddate 3.Owners. Placeofbusiness4.Charterers/Place01bUSiness 5.Vessel"sname I 6.GRTlNAT I 7. Class I 8.Indicatedhorsepower 9.Totaltonsd.w.(abt.)onsummerIreeboard 1'0. Quantityofstores.provISionsandfreshwaternotexceeding(tons) 11.Cublc-Ieetgrein/balecapacityavailablelorcargo r2. Permanentbunkers(abt.) 13.Speedcapabilityinknots (abt) onaconsumptionper24hoursof (abt.ll'4Presentposition 15.Periodofhire(Cl.I)16.Port01delivery(alsoindicatealternative(a)or(b))(Cl.I) 17Timelordelivery(Cl.I) 18.Numberofdaysnotice01expecteddateofdelivery(Cl.I) r9. Cancellingdate(Cl.2) 20.Tradelimits(alsoIndicatealtornatlvc(a)or(b(Cl.3) 21.InJUriOUS,Inllammableordangerousgoodslimitedto(alsostatename ofauthoritiesconcerned)iCI.3) 22.Vessel"scargohandlinggear(Cl.5) 23FuelconsumptionInportper24hours(abt)(Cl5) r4Bunkerprice(indicatealternative(a)or(b)andIlxedpriceI1 agreed) (Cl6) ~ 5 .Bunkersondelivery(statemin.andmaxquantities)(Cl.6) 116. Bunkersonre-delivery(statemlnandmax.quantities)(Cl.6) 27Charterhire(alsoIndicatealternative(a)or~ b (Cl.7)20Hllepayment(statecurrency.modeandplace01payment.alsobene ficiaryandbankaccount)(Cl7) 29.Placeorrange01re-delivery(Cl8)30Number01daysp,el,mlnaryandIInalnotice01portanddate01re delivery(Cl.8) 31.Suspension01hireetc.(indlc.no01consecutivehours)(Cl14(A r2Cleaning01bOilersetc.(indicatenumber01hours)(Cl.15) 33.Advances(onlytobeIilledInI1 speCial:ogreementmade)(Cl.16) 134Overtime(statelumpsumorI1 otherspecialagreementmade)(Cl19) 35War(onlytobefilledinI1 Section(C)agreed)(Cl.23) 136. GeneralaveragetobesellledIn(Cl24) 37Supercargo(statepriceagreed)(Cl.27) 138Meals(statepriceagreed)(Cl28) .-39BrokeragecommiSSionandtowhompayable(Cl33) 40Numbers01additionalclausescoveringspeCialprovisions.I1 agreed ItismutuallyagreedthalthiSContractshallbeperlormedsublecttotheconditionscontainedInthisCharterwhichshallIncludePartIaswellas Part11. I" theeventofaconlllct01condlt':>ns.theprOVISions01PartIshallprevailoverthose01Part11 totheextent01suchconlllct Signature(IortheOwners)Signature(IortheCharterers) . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - - - - - - - - - - _.--------Printedandso'dbyFr.GKnudtzonLld ..55.Toldbodgade.Copenhagen. e,yauthorityofTheDalticandInternationalMaritimeConference.Copenhagen. LINERTIME 265 PART11"LlNERTIME"DeepSeaTimeCharterPage2 ItI ..agreedthepartymenllonedinBox3asOwnersofthe VesselnamedinBox5ofthegrosslnetRegistertonsin1icatedin Box6.classedasstatedInBox7andofindicatedhorsepowera!OstatedinBox8.carryingaboutthenumberoftonsdeadweightIn-dicatedinBox9ensummerfree boardinclusive01bunkers.aswe:1 asstores.provISionsandfreshwaternotexceedingthenumbercl tonsindicatedinBox10havingacubic-feetgrain/balecapacity availablefOIcargoasstatedInBox11.exclusive01permanent bunkers.whichcontainaboutthenumber01\01'15s\a\ed'1'1 SOli."2. andfullyloadedcapableofsteamingaboutthenumberofknots indicatedinBox13Ingoodweatherandsmoothwateronacon sumptlonof'Iboutthenumberoftonsstat.?dInBox13per24hours. nowinPOSitionasstatedInBOll14.andthepartymen"onedas CharterersInBox4.asfollows 1.PertodandPorI0'Delivery TheOwnerslet.andtheCharterershiretheVesselforaperiod01 thenumberofcalendarmonthsIndicatedInBOll15fromthelime (notaSundayoralegalHolidayunlesstakenover)theVesselIS deliveredandplacedatthedisposaloftheCharterersbetween7 am and10pm.orbetween7amandnoonlIonSolturday.attheport statedInBox16insuchreadyberthwheresheColnsafelylie (a)alwaysalloat-(b)alwaysalloatorsafelyagroundwhereItiscustomaryforvessels ofSimilarsizeanddraughttobesafeaground-8StheCharterersmaydirect.shebeingIneverywayfilledfor ordinarydrycargoserviceWithcargoholdswellswet andreadytoreceivecargobeloredeliveryunderthiSCh'Hter (- slaleallc/ntl/,veagrcedInBOlf16) TimeforDefn/ery 1 2 3 4 5 6 7 8 '3 10 11 17 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 TheVesseltobedeliverednotbeforethedateindicatedinBOll1730 TheOwnerstogivetheCharterersnotlessthanthenumberofdays'31 nollcestatedinBoxleofthedateonwhichtheVesselISexpected32 tobereadyfordelivery31 TheOwnerstokeeptheCharterersclosely::ldVlsedofpossible34 changesInVessel'sPOSition35 2.Cancelling36 ShouldtheVeso;clnotbedellvereobythedateIndicatedInBox1!1 37 theChartererstohavetheoptl"n01cancelling38 11 theVesselC3nnotbedellve'E-1'1bythecancellingdatetheChar39 terers.IIreQulfed.todeclareWithin48hours(SundaysandHolidays40 excluded)alterreceivingnoticethereofwhethertheycancelorWill41 takedelivery01theVessel42 3.Trade43 44TheVesseltobeemployedIn1:l",11I1trade