MARITIME - PRACTITIONERS

By -Kevin JosephMBA (Energy Trading)

Merchant

A person or company involved in wholesale trade ,especially one dealing with foreign countries or supplying goods to a particular trade

An individual whose occupation is to buy items at wholesale price and sell them at retail price

The practitioners should be aware that the demand for shipping is a derived demand.

Shipping is a derived demand, which means that shipping as an industry depending on people who are willing to trade by sea using ships.

Eg.demand for grain trade increases, so demand for shipping grows with it.

CHARTERING MARKETS

The Dry Cargo Market

Dry bulk trades comprise iron ore, coal, grain, timber, steel and other similar cargoes which are shipped in bulk.

Dry Cargo market relies on a range of vessels and covers all the world’s major trade routes.

A chartering contract is the example of a transaction entirely governed by market forces.

The relative bargaining strength of the two parties depend on the current state of the market.

Dry Cargo Charter Parties

Two most commonly used charter parties used for dry cargo are the Baltime and the New York Produce Exchange (NYPE) Charter parties.

The Baltime is often considered to favour shipowners while the NYPE is considered more advantageous for charterers.

Many of the standard forms are imposed on the markets by the charteres: To fit into the their contacts of sale of the commodity itself.

The charterer is most of the time in a stronger position as far as terms and conditions are concerned as they are static and is easy for them to band together with the competitors.

Single Voyage Charter:Ship agrees to go to load a cargo of an agreed quantity of a commodity and carry it to ‘B’ for which the consideration will be rate of freight (calculated on per tonne basis)

Consecutive Voyages: When there are more than one cargo to move and in a consequence , it is convenient to fix the cost i.e to contract with the owner.

Time Charter

The shipment is responsible for providing a seaworthy ship with valid classification and a master and a crew, so that the ship can be sailed to its final destination.

The charterer is responsible for loading, stowing and discharging cargo safely.

The charterer is responsible for giving the master the effective orders and instructions with regard to when and where the cargo should be shipped.

The charterer is responsible for providing fuel for the vessel.

Contract of Affreightment

Binding agreement which sets forth the obligations and rights of the owner of a vessel and a merchant.

The vessel owner undertakes to provide cargo space (at a specified time and at a specified freight)to the merchant who is liable for payment whether or not the cargo is ready for shipment

The contract addresses issues associated specifically with the vessel, its crew and the routes on which it will be piled

Bare Boat Charter

The owner gives possession of the ship to the charterer and the charterer hires its own master and crew.

The giving up of possession of the ship by the owner is the defining characteristic of a bare-boat charter.

The bare-boat charterer is sometimes called a "disponent owner".

The chartered takes over the vessel for a stated period of time with a minimum of restrictions for a stipulated sum.

Terminologies used in voyage charter : Trimming Dunnage Tallying Stevedore Agents

Trimming: Applies to bulk cargoes such as coal, where the surface of the loaded cargo needs to be leveled out to make best use of the space available and to minimize the danger of the cargo shifting in the hold during the voyage.

Dunnage: Is the timber used to prevent metal to metal contact between cargo and the ships to hold or between ship plates. And to stop loose items from moving around in the hold during the voyage.

Tallying: Is the name given to the procedure of checking the no of packages,  as they are loaded or discharges.

Stevedores: One who is employed in the loading or unloading of ships.

Steve Dore The primary role of a

stevedore is the loading and unloading of freight on an off ships while they are in port

Other responsibilities includes- 1-mooring and unmooring

ships 2- cleaning and preparing

container 3-stacking and securing

cargo's 4-adminitravtives process

associated with the transfer of cargo

Stevedore(also known as a dock worker, docker or dock laborer, wharfie) is usually the entry point for individuals seeking a carrier on the docks or within ports

Stevedores can than progress to became a crane operator, foreperson or container terminal manager

Refer document in folder.

Skeleton of voyage charter : Date Names of parties Name of the ship with some

description Loading port Cargo nature and quantity Discharging port Lay days and cancelling

dates Rate of freight and manner

of payment Loading/discharging cost Speed of loading and

discharging Demurrage rate Brokerages

Time charters : The shipment is

responsible for providing a seaworthy ship with valid classification and a master and a crew, so that the ship can be sailed to its final destination.

Objective : Is to transfer the

commercial direction of the ship to the charter while leaving technical controls with its owners.

Refer document - NYPE 93 asbatime

Skeleton of time charters

Date Names of parties Name of the ship with some

description Speed and fuel consumption Duration Places of delivery and re

delivery Trading area or limitations Rate of hire Lay days and cancelling

dates Commissions

International chartering market at Work

Dry cargo chartering takes place all over the world

Geological location of a shipping market is very crucial to hold a dominant position.Eg : London market

With the advent of new technologies. The communications between the traders, the seller and the buyer has improved significantly. It is real time and can be part of the market from any part of the world at any time of the day.

InternetServersWireless communicationsOptical cables (trans atlantic cable)

The practitioners in the shipping communities : Charters and their

agents Owners and their

brokers ( here brokers can have several roles)

The broker can be a member of the charter’s (or owner’s own staff)

Exclusive brokers : These can be shipbrokers

that negotiate charters only for one shipowner or one charterer.

It can also mean shipbrokers that specialise in a restricted category of vessel, such as oil tankers; or in a restricted category of shipbroking , such as sale and purchase of passenger ships.

The broker can also work exclusively with regard to the place in which he offers his broking services, such as a broker offering services exclusive to Hong Kong

Competitive brokers :

Here the principal places his business on the market through several brokers who are in competition with each other to bring suitable business to the principal.

There is also extensive used of intermediate broker . These broker must walk a very narrow path because he or she does not represent either of the parties and so must take care to be strictly even-handed.

The tanker market

This market is separate form the dry cargo markets but tanker chartering itself subdivides into separate specialists

Crude oil market is the important market.

Any any political unrest in the middle east directly effect the crude market.It is also prone to be in headlines due to the catastrophic pollution problem during spills. The depth of the water is important to accommodate the draft of the giant crude oil carriers.

Crude Oil

This is the trade that hits the news whenever there is political unrest in the Midddle East.

Catastrophic pollution problem takes place whenever there is oil spill

The things which conspired to stop the continuing upward trend in tanker sizes are-

Draft question

Economy of the ships-the sheer size of ships were lacking designers' into areas of pure theory.

Recession caused by the oil producing countries which imposed massive price increase and thus created a slump in the demand for oil .and thus the price of he ‘dead-weight tonne’ has to be increased

Petroleum products

These are those which are extracted from the crude oil which are to be burnt in that form.

Ranging from highly volatile to viscous .

There is a term as clean and dirty oil Clean oil require particularly clean

vessel, handling that carry them .

The fuel can be naptha , kerosene , etc

Dirty oil covers fuel oil, diesel and heavy gas oil as well as crude .Many heavy oil require heating before they can be pumped with the help of the heating coil.

The second tanker market is that for refined petroleum products.

The oil consuming world quickly found that the most economical system was to site refineries near the end users.

Chemicals and other products These are the by

products of the oil refining . e,g feedstocks for manufacturing plastics.

Some are volatile and some are toxic that can cause damage.

Ships in such trades have to be equipped with showers at intervals along the deck so that any splashes may be washed at once

One thing these cargos have in common is the need of the cleanliness of the ship’s tanks

One source of impurity could simply be the surface of the tanks themselves and chemical carriers normally have metals of the tanks coated with a plastic film. Some are soluble and some are not.

Parcel tankers are used to carry many different consignments in different tanks .H2so4, vegetable oil,wine LNG are easily transported in this .

Tanker charter parties Tanker market has its single voyage and consecutive voyage charters

and a contracts of affreightment.

The basic construction of the tanker charter is the same as for the dry cargo and in some respects the clauses are simpler for the wet cargo as oil installations are almost variably set well apart from port complexes.the operation is simpler in case of the oil transport.

One major difference between voyage charters for dry cargo and those for tankers is in the way the rate of freight is expressed.

It is usually expressed in terms of the unit of currencies per tonne of cargo carried

A system was evolved after world war 2 to have an agreed schedule of nominal rates covering every combination of loading and discharging ports for crude oil.

This enabled a charter to fix a ship naming in an area. fix prices for an area.

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