5.1. Types of charter party
Tramps
and Chartered Vessels
Tramps are ships which can be hired as a
whole, by the voyage or a specific time period to carry cargo between such
ports as the charterer may require. They are not operated by big shipping
companies, but by a large number of private owners. Tramps are chartered under
a contract of affreightment, called charter party.
Chartered vessels do follow fixed routes
but go wherever they are needed. A company wanting to charter a ship will apply
to one of the world markets for shipping such as the Baltic Exchange in London. In the
Baltic a broker who acts as the charterer’s agent works for the company
looking for a ship. His job is to find the right kind of ship at the lowest
price possible. Most ships chartered in the Baltic are tankers and other bulk carriers.
Charter
Party
A charter party is a document
stating the terms and conditions of a contract of affreightment (or
chartering contract). It is a maritime contract whereby the owner agrees to
place a ship, or part of it, at the disposal of a charterer, the latter
agreeing to pay a certain freight on the cargo to be carried. The shipowner’s brokers
and charterer’s agents negotiate the price and terms of the charter.
A charter party includes particulars
such as the names of the shipowner and charterer, the ports of loading and
destination, the vessel’s name and description, the cargo and its description,
freight, lay days and demurrage, provisions concerning the party that is to
bear the costs for storage, wharfage, berthing expenses, etc.
Types
of charter party
The term charter party is employed to
describe three main types of contracts relating to the use of vessels.
1.
demise charter: the shipowner delivers possession of
the vessel to the charterer, who engages the master and crew, arranges for
repairs and supplies, and, in general, functions in much the same way as the
owner during the terms of the charter party.
2. time charter: a
vessel is chartered for a specific period of time; the shipowner employs the master and crew and the charterer
simply acquires the right, within specified limits, to direct the movements of
the vessel and to determine what cargoes are to be carried during the charter
period.
3.
voyage charter: a vessel is chartered for the
carriage of full cargoes on one or several voyages; occasionally, a charterer may also hire a part of the vessel's capacity, in which case the governing contract is described as a space charter.
The voyage charter may include:
a. the single
charter – covering a single voyage from one port to another;
b. the trip
charter – covering a voyage from the port of departure to the port of
destination, and back;
c. the round-trip
charter – covering a voyage from the port of departure to the port of
destination, and back, after touching several ports.