Voyage Charterparties Research Articles

Comparative Study of Voyage Charterparties in Dry and Liquid Bulk Markets

This research paper examines the contractual and legal framework of voyage charterparties in maritime commerce. A charterparty, being a legally binding agreement between shipowner and charterer, serves as a cornerstone of international shipping trade. The study presents a comprehensive clause analysis of dry and liquid voyage charterparties, including their types, content, clauses, and governing legal principles. The research begins with a review of the usual charter categories (voyage, time, bareboat, and contract of affreightment), followed by an examination of voyage charter's clauses and compares the clauses in the prevalent voyage charterparty forms, with particular focus on two industry-standard contracts: The GENCON and TANKERVOY. These charterparties, developed by the maritime organisations of BIMCO and INTERTANKO, are extensively used in dry bulk and liquid bulk cargo markets respectively. Through detailed examination of common terms and clauses of these contracts, this research makes an original contribution to maritime commercial law literature as it offers valuable insights into the contemporary chartering practices and their adaptation to modern shipping market requirements.

Voyage charterparty arrangement for river tramp shipping: Green and traditional vessels comparison

Voyage charterparty arrangement (VCA) for river shipping is a common agreement between a shipowner and a charterer regarding the transportation of specific cargoes from one port to another via a tramp vessel. Optimizing VCA with the essential terms such as laytime and sailing speed of the vessel, is a crucial task for both parties to reduce potential disputes and achieve win-win outcomes. This paper models the problem from two perspectives: the VCA negotiation stage and execution stage. Firstly, according to the given probability distribution of port time, the theoretically optimal laytime is obtained by using textbook formulation of newsvendor problems (NVP). On this basis, considering the concerns about the inaccuracy of the given probability distribution and the adjustment measures taken by charterers and shipowners in reality, an integrated adjustment model is constructed to determine the optimal laytime in the VCA negotiation stage. Secondly, taking into account the vessel's uncertain lock crossing time, an operations coordination model with information sharing of the berth plan is established to obtain the optimal sailing speed under a certain confidence level in the VCA execution stage. Finally, a case study of chartering tramp vessels on the Yangtze River validates the applicability and effectiveness of the models proposed in this paper, and some important management insights are derived. The results show that establishing lower optimal speed limits and relatively shorter laytime when signing a contract with the shipowner of green river vessels is reasonable for the charterer. By notifying the shipowner of the berth plan after the green river vessel crosses through the lock, the charterer can avoid higher demurrage costs due to speeding-up. Operations coordination would be mutually beneficial without abusing the contract terms. Compared to traditional river vessels, it's more reasonable to reduce the benefits allocated to charterers from the deceleration of green river vessels by shipowners.

Supply chain inefficiencies: the causes and costs of dry bulk ships anchored in Vancouver

The paper describes the contracting and logistics conditions contributing to the level of anchorage in the grain, coal and fertiliser export trades of Vancouver. Increases in the level of anchorage in these trades have created economic, environmental and governance issues. Comparison of the logistics structures and practices in these commodity trades gives insights into the reasons for different levels of anchorage. Conditions in and data from the port of Vancouver are used to simulate conditions in the grain trade and to demonstrate the critical importance of the variability of ship loading times to levels of anchorage. The incidence of the costs of anchorage is examined. The terms in voyage charterparties used in the grain trade are found to inhibit efficient use of vessel time.

Article: Green Shipping and Trade: Allocating Costs of the IMO Sulphur Regulation 2020

In January 2020 the Internatoinal Maritime Organisation (IMO) imposed, down from 3.5% m/m, a new limit of 0.50% m/m Sulphur limit from exhaust gases originating from commercial vessels. This new standard forced the maritime industry to switch to compliant fuels (such as Very Low Sulphur Fuel Oil (VLSFO) and ultra-low sulphur fuel oil (ULSFO) blends) or use an exhaust gas cleaning system (EGCS). Although there may be a consensus that this is a good thing, achievement of benefits has created contractual challenges for the industry. Responsibilities are divided between shipowner and charterer through forming a voyage charter, a time charter, or a bareboat charter (BBC). Baltic and International Maritime Council (BIMCO) and Intertanko provide standard contracts allocating the responsibilities of compliance with IMO Sulphur regulations between shipowner and charterer under the time charter. The compliance obligations under the voyage charterparty and BBC are still unaddressed. Here, we address them and offer an allocation of the responsibility. Charterparty, VLSFO, EGCS, contract, obligation, fixtures, Sulphur

영국법상 정기용선계약에서의 반선과 잔존유 반환채권에 관한 고찰 -대법원 2019.12.27. 선고 2019다218462 판결 평석-

This case is one of several types of legal claims that occurred due to the bankruptcy of H Shipping, which had a major impact on the shipping industry in South Korea. Among them, there are various issues such as the determination of the governing law for the claim for damages in relation to the termination of the contract due to the commencement of the rehabilitation procedure in time charters, the issue of the claim for the return of residual oil at the time of redemption in time charters, and the issue of the application of off-set under English law. Among the main issues related to this, we will look at the problem of the residual oil return bond according to the time charters’ forms. In the case where the governing law is designated as the English law of a foreign law, it is expected that the issue of off-set will be reviewed. First of all, there are many differences between the use of the NYPE 1946 and 1993 forms and the use of the NYPE 2015 forms. When using the former forms, it is necessary to supplement the ‘rider clause’. Especially, it is necessary to recognize that the residual oil return bond due to the termination of the time charter contract, which is the core of this case, is excluded from the NYPE 1946 form, but is included in the NYPE 2015 form. Next, there is the issue of off-set the termination of the contract under English law. The position of the English and Korean Courts are that set-off under common law and set-off under common law have a substantive nature in the application of set-off under the equitable law. Under English law, the problem of set-off for premature termination lies in the application of set-off under common law and set-off under equitable law. The judgment of the English court and the Korean court is that set-off under the common law is applied because it has a substantive law nature. Although it is a reasonable judgment, when the English law is applied as the governing law, there are cases where the position on the permissible off-set by the cause of the voyage charter party and the time charter party is different in carriage of goods by sea, so additional review is necessary. Based on these results, it is hoped that they will serve as practical references in the future.

Laytime and demurrage implications in voyage charterparties for chemical tankers

Maritime transportation is one of the worst offenders for air, water pollution, and greenhouse gas emissions (GHG). Reducing the emissions in shipping is a common goal for all stakeholders involved in the shipping process. The purpose of this paper was to explore the implications of the laytime and demurrage provisions when using existing charterparties and to suggest how the areas where charterers are exposed to demurrage can be addressed and thus improve sustainability. A comparative analysis was conducted on selected standard voyage charterparties. The findings revealed various areas that do not protect a charterer's interest. It is proposed that in order to solve this challenge a global group consisting of stakeholders be formed to collectively design laytime and demurrage clauses in order to achieve greater sustainability and reduce demurrage. A revised charterparty form for the transportation of chemical liquid bulk chemicals by tankers could then be created.

Laytime and demurrage implications in voyage charterparties for chemical tankers

Maritime transportation is one of the worst offenders for air, water pollution, and greenhouse gas emissions (GHG). Reducing the emissions in shipping is a common goal for all stakeholders involved in the shipping process. The purpose of this paper was to explore the implications of the laytime and demurrage provisions when using existing charterparties and to suggest how the areas where charterers are exposed to demurrage can be addressed and thus improve sustainability. A comparative analysis was conducted on selected standard voyage charterparties. The findings revealed various areas that do not protect a charterer's interest. It is proposed that in order to solve this challenge a global group consisting of stakeholders be formed to collectively design laytime and demurrage clauses in order to achieve greater sustainability and reduce demurrage. A revised charterparty form for the transportation of chemical liquid bulk chemicals by tankers could then be created.

Optimizing voyage charterparty (VCP) arrangement: Laytime negotiation and operations coordination

Voyage charter(VC) is a shipping arrangement between a shipowner and a charterer for the carriage of specific cargo from one port to another port on a per-ton or lump-sum basis. In this paper, we present innovative applications of operational models to optimize voyage charterparty (VCP) arrangement for commercial shipping from the contract negotiation stage to its execution stage. We develop novel models to support decision makings of stakeholders, charterer (he) and shipowner (she), under established admiralty law, considering essential terms such as laytime, demurrage and despatch. Firstly, we consider a risk-neutral charterer’s optimal laytime decision under uncertain berth availability and weather conditions. Following that, we study the impacts of speed adjustment on the related profit of the two parties. We show that under some circumstances, a shipowner can speed up to the extent that the increase in demurrage revenue compensates the extra cost of bunker fuel expenditure. Operations coordination leads to the mutual benefits of stakeholders.

ESTIMATION OF THE TIME OF THE VESSEL'S ARRIVAL AT PORT

Purpose. The paper aims at the assessment of the probability of the vessel’s arrival at the port at a specified time interval considering the different combination of the voyage charter-party (C/P) terms and their wordings. Methodology. The structure of the vessel's time in port was formed considering the C/P terms and their wordings. The time intervals for which it is actual to estimate the time of arrival were defined on the basis of the theory of transport processes and systems. The normal distribution law was used to estimate of the probability of a vessel's arrival at a port at a specified time interval. Findings. The probability of the vessels arrival at the port of loading in the C/P in question was searched in three most actual situations: 1) the vessel's opening date is known; 2) the vessel's arrival to the port of discharging on previous C/P is known and 3) the vessels position on the passage to the port of discharging in previous voyage is known. For these three situation were estimate the probability of the duration of the time elements from the opening point and present position points to the port of loading in the C/P in question far as the C/P terms indicate the beginning the duration of the laytime. Originality. For the first time the vessel's time in port was structured considering the C/P terms and their possible wordings, their impact on the time in port was determined, and the probability of vessel's arrival at specified time intervals was searched. Practical value. The obtained results can be used in voyage planning (during fixing the C/P and further voyage performance) by estimation the duration of the time in port considering the C/P terms and wordings of the beginning and duration of laytime and time of the vessel's arrival.

Ensuring the given level of the voyage efficiency considering the risks factors associated with the charter party terms

The terms of the agreement for voyage chartering of the vessel (voyage charter-party) are identified as those the wordings of which can affect the risk of increasing the voyage time and, accordingly, the voyage costs of the shipowner-carrier. Their possible wordings are given, the nature of their impact on the components of the voyage time are characterized. Noted the possibility of their assessment by shipowner during the negotiations before the charter-party conclusion. The approach of the ensuring the voyage efficiency is developed. It based on the assessment the risk of the voyage time increasing due to the charter-party terms

ОЦІНКА СТОЯНОЧНОГО ЧАСУ РЕЙСУ СУДНА ЗА РІЗНИХ ФОРМУЛЮВАНЬ УМОВ РЕЙСОВОЇ ЧАРТЕР-ПАРТІЇ

The study is devoted to estimating the vessel's time in port by a shipowner-carrier, for whom it is important to understand the duration of port time under cargo handling as it is а part of the total time of the voyage, which in turn allows both to plan the vessel’s further work and to estimate the voyage costs. The reasoning is based on the wordings of the relevant terms of the charter party, most of which are negotiable between the shipowner and the charterer in the process of concluding a deal for the carriage of cargo (voyage charter party). Time in port is considered as the time for the direct cargo handling and additional time in the port, the presence and duration of which is actually determined by the wordings of the charter party's terms. The influence of such wordings on the time in port under cargo handling was determined; it was found that to assess the duration of the time in port it is important to determine the time (day of the week and time) of the vessel’s actual arrival to the port for cargo handling. The time in port is structured chronologically, depending on the wordings of the terms of the charter party. The need for further development of the mathematical apparatus for estimating the probability of a vessel arriving to the port at certain time intervals was underlined.

Assessment of Shippers and Ship Owners Ship and Charter Type Choice in the Wet and Dry Bulk Ship Brokering Market: Knowledge Guide for African Indigenous Ship Brokers

Abstract The study assessed shippers and ship owners’ ship and charter party type choices in the wet and dry bulk ship broking and chartering market as guide for performance improvement for African and Nigerian ship brokers. It aims to determine if significant differences exists between shippers ship type choices among Very Large Crude Carriers (VLCC), Handymax, Supramax and capsize vessels in the wet and dry bulk market as well shippers and ship owners charter party type choice between voyage charter and time charter for the various ship types. The study adopted a survey method in which the Baltic International Maritime Council (BIMCO) was surveyed and 5 year data on ship types and charter party type choices of shippers and ship owners was obtained. The statistical tools of Analysis of Variance (ANOVA) and independent sample t-test were used to compare the ship type choices and charter party type choices of shippers and ship owners. The result indicates that shippers’ in the wet and dry bulk cargo market show greater preference for Supramax vessel type. The aggregate number of vessels chartered over the period covered in the study is 41,684 vessels out of which 22,593 representing about 54.2% are Supramax. This was seconded by VLCC which recorded 8,829 or 21.2% charters. Capsize and Handymax vessel types had 6211 and 4069 charters respectively which represent 14.9% and 9.77% each. Shippers and ship owners also show greater preference for voyage charter party type than time charter party for all types of vessels. It was recommended that ship brokers should place greater priority on trading in Supramax ship types and voyage charter party type as the demand trend for this ship type is likely to remain higher over time; followed by VLCC; while more shippers and ship owners are likely continue to show preference for voyage charter than time charter.

Dimensionamento da frota de navios de derivados claros para cabotagem: proposta de modelo de otimização

O setor de Óleo e Gás depende fortemente do transporte marítimo para movimentar grandes volumes de petróleo e derivados. Neste sentido, este artigo propõe um modelo de programação linear inteiro misto cujo objetivo é dimensionar o tamanho da frota e o porte dos navios para o transporte de derivados claros restritos à navegação de cabotagem de uma empresa real. O modelo proposto auxiliou os programadores a definir quantos navios são realmente necessários para atender os compromissos assumidos dentro de um horizonte de planejamento pré-estabelecido. Comparando este resultado com o número de navios já contratados e disponíveis, pode-se, eventualmente, liberar navios para realizar viagens de longo curso, evitando assim a contratação de navios em Voyage Charter Party para este fim, além de reduzir a sobre-estadia nos períodos de baixa movimentação, quando a frota contratada se torna superdimensionada.

Breach of Carrier's Duty by FIOST Clause under Voyage Charterparty: Focus on the Eems Solar Case

Breach of Carrier's Duty by FIOST Clause under Voyage Charterparty: Focus on the Eems Solar Case

A System for Queuing in Ports

In many sea ports, queue priority is determined by the first come first serve principle when the port is congested. The paper suggests that this principle should be avoided for environmental reasons, and suggests a simple alternative based on departure dates rather than arrival dates. This system will allow commercial beneficial trading of turns (slots) in the queue.In order to get the full benefit of the system, voyage charterparties to be adjusted, so that the demurrage does not work as a disincentive to environmental optimization. The paper includes suggested clauses.

A Study on the Legal Interpretation on Words of Incorporation of the Bill of Lading under Charter Party in Voyage Charter Party

A Study on the Legal Interpretation on Words of Incorporation of the Bill of Lading under Charter Party in Voyage Charter Party

Incorporating uncertainty and multiple criteria in vessel selection

The selection of appropriate vessels to carry out shipping activities is crucial for many maritime stakeholders, including charterers, shipowners, brokers, surveyors, and safety engineers. The task is essentially a process of multiple criterion decision making under uncertainty, requiring analysts to derive rational decisions from uncertain and incomplete data contained in different quantitative and qualitative forms. The difficulty and complexity of such a task is obvious and thus stimulates the study of developing a novel decision-making technique under uncertainty with multiple criteria. The core of the method is the Dempster—Shafer theory, based on which the new function of fuzzy ‘evidential reasoning’ is investigated, analysed, and further applied to improve the vessel selection process of dealing with multiple criteria with insufficient and ambiguous information. A numerical case study of selecting an oil tanker based on a voyage charter party is presented to demonstrate the proposed method.