Voyage Charter Research Articles

Developing a logit model for the provision of the process of managing the conclusion of voyage chartering transactions

A balance of interests between the parties and possible risks, linked to the set of conditions of a voyage charter, reflected in the offer, predetermines the success of concluding a freight transaction between a ship-owner and a charterer. A mathematical basis for the formalization of the decision-making process regarding a transaction, based on the set of conditions, are the models of binary choice, the experience of using which in different areas of activity is analyzed. A logit model was developed for evaluating the success of the conclusion of the voyage chartering transaction based on the example of a particular market segment. The logit model evaluates probability of concluding a voyage chartering transaction based on the set of values, which correspond to quantitative conditions of the offer (for example, demurrage, level of the freight rate, intensity of cargo operations, interval of time of vessel delivery). We established by empirical way a boundary value of the probability, obtained by the logit model, which predermines the existence of balance of interests between the parties and the possibility of the conclusion of transaction under the given conditions. An empirical verification of the obtained logit model demonstrated the share of erroneous conclusions, which may be considered acceptable (less than 5 %), that predetermines its theoretical and practical significance. We developed a procedure for the application of the logit model in the activity of freight brokers for analysis of information from the offers and preparation of the substantiated recommendations to the parties involved to reach the balance of interests under existing market conditions.

Bulk ship fleet renewal and deployment under uncertainty: A multi-stage stochastic programming approach

Faced with simultaneous demand and charter cost uncertainty, an industrial shipping company must determine a suitable fleet size, mix, and deployment strategy to satisfy demand. It acquires vessels by time chartering and voyage chartering. Time chartered vessels are acquired for different durations, a decision made before stochastic parameters are known. Voyage charters are procured for a single voyage after uncertain parameters are realized. We introduce the first multi-stage stochastic programming model for the bulk ship fleet renewal problem and solve it in a rolling horizon fashion. Computational results indicate that our approach outperforms traditional methods relying on expected value forecasts.

Research of the effect of terms and conditions of an offer on successful conclusion of the freight transaction

When forming a complex of the terms and conditions of the contract of affreightment, each party should assess adequately the chances of the conclusion of the transaction and also determine the necessary limits of adjustment of certain conditions in the event of the unacceptability of the base case of terms and conditions. To date, such decisions are made «intuitively», which, firstly, makes the process of conclusion of the transaction longer; secondly, may not provide compromise conditions at all.The research analyzes the major terms and conditions of offers - bases for the conclusion of the contract of affreightment - as the factors that affect the parties' decision-making on the conclusion of the voyage charter; their formulations are given as advantageous and disadvantageous to the shipowner with regard to their impact on the amount of expenses and possible risks.Using statistical methods - correlation and regression analysis and nonparametric analysis, the impact of the identified factors was quantified. The regression model, which, with a sufficient degree of reliability, allows to evaluate the success of the conclusion of the freight transaction was obtained. The results of the nonparametric analysis complement findings made on the basis of the regression analysis. Such complex of tools allows to cover the entire range of terms and conditions of the offer having both a quantitative assessment and set in the form of the qualitative characteristic.Thus, by analyzing a combination of terms and conditions, stakeholders - the broker, the charterer and the sea carrier - can make certain concessions in reaching a compromise, and the proposed tools allow to do such actions reasonably.

Excess returns in the spot market for bulk carriers

The present study investigates the excess return dynamics between time charter (t/c) trip charters and their underlying voyage charters in the dry bulk market. Using a weekly data set over the period January 2003 to January 2014, we first examine the existence of a long-term co-integrating relationship between trip charters and their respective voyages expressed in Time Charter Equivalents. Then we develop a new methodology based on technical analysis in order to identify excess return signals and form a trading strategy. The results show that our approach outperforms the benchmark strategy of always chartering in vessels on t/c trip charters and perform the underlying voyage charters. Our analysis can be used by ship operating companies as a guide to select voyages with the highest probability of excess returns and adapt their chartering strategies accordingly.

Risks of transport maintenance of foreign trade delivery

The problem of organizing the transport maintenance of foreign trade delivery should be considered at two levels – strategic and operating, each of them is associated with solving specific tasks, and taking into account relevant risks in planning processes.As a result of the studies, based on a system approach transportation risks of an exporter (importer), at the level of preparing preliminary decisions on deliveries were identified. Two subsystems of the transport risk system component were singled out: risks associated with traffic capacity and transport performance; risks associated with changes in the transport market condition.The risk factors for different bases of delivery and terms of using marine vessels (privately-owned vessels or chartered under the terms of voyage charter or time charter) were characterized for the marine component in transport maintenance.

Changements institutionnels et efficience de l’affrètement au voyage dans le transport fluvial de marchandises*

VNF’s statistical data shows a remarkable resilience of inland navigation in France during the recession. Yet at least part of the profession is in crisis: the independent barge operators are now likely to be close to bankruptcy. The small independent barge owners who are the key players in the fully liberalized spot market since 2000 bear the brunt of low prices resulting from a destructive competition which is exacerbated in recession. Transaction costs associated with this new institutional environment exacerbate this procyclical behaviour detrimental to the entire profession. Based on insights from transaction costs economics, the article assesses the conditions of efficiency of voyage charter in the spot market. It analyses these costs through a transactional review of the history of the voyage charter modalities and thereby leading to recommendations to improve organization and efficiency of this market segment.

Optimization Research of Refueled Scheme Based on Fuel Price Prediction of the Voyage Charter

Fuel cost is the key element of ship owners to control operating costs in the business of voyage charter. While fuel price changes frequently over time and also ocean shipping transport cycle is long, and therefore how to develop the most economical refueling scheme among the ports of call becomes one of the significant issues that the ship owners concerning. This study addresses the refueling scheme optimization problem for voyage charter operators from the perspective of the ship owner. First, an ARMA-based model was proposed to forecast a time serials of the fuel prices. Then, to maximize the shipping operation profit, the non-linear programming model is formulated to solve the optimal refueling scheme where to refuel and how much to refuel. Finally, a case study on a Pacific Ocean-circle route under multi-charter voyage contracts is conducted for a dry bulk cargo ship. The results indicate that the optimal fuel supply program compared with conventional refueling cost saves 263,400 USD, accounting for 14.3% of the total operating profit.

A Study on the Charter Type Choice of Turkish General Cargo and Drybulk Shipowners

The purpose of this study is to determine the most often preferred charter types by Turkish general cargo and dry bulk shipowners and investigate the criteria which affect and determine the selection of charter types. In the study, the methodology utilized constitutes literature review, in-depth interview and survey. The data gained through the survey was processed, through which the means were found out and exposed to factor analysis. The study reveals that Turkish shipowners mostly prefer voyage charter. Another point revealed through the study is that shipowners consider the risk in the selected charter type, reliability of charterer, condition of the operated ship relatively important over the others in deciding on the charter types.

The Charter Fixing Negotiation Procedure with Asymmetric Impatience in a Game Theory Framework: Case Studies in Coal and Ore Transactions

In determining voyage charter rate, normally, the charterage is determined through the general process of negotiation with the power of the demand and supply in the market including various factors. This paper assumes that the ship-owner cannot make the contract with charterer after the end of pre-chartering, the delay cost per day from ship-owner will be incurred. This case can be applied to charterer as well. The purpose of this paper is to propose an equilibrium charterage which includes the delay loss cost per day in bargaining with asymmetric impatience both for the charterer and the ship-owner. This paper uses Nash equilibrium theory, which aims at reducing the negotiation time, The equilibrium charterage found in Rubinstein theorem, which is made with each discount factor in surplus. In summary, this paper analyzes the delay loss cost per ton and per day between the charterer and the ship-owner, by determining the equilibrium charterage in bargaining with asymmetric impatience. The result can be contributed to suggest the equilibrium charterage with surplus payoffs as the ratio of both of the charterer's and the ship-owner's delay loss cost per ton in the current market.

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

A Study on the Exemption and Deduction of Freight in Voyage Charter

A Study on the Exemption and Deduction of Freight in Voyage Charter

Avaliação da flexibilidade contratual da indústria do transporte marítimo utilizando opções reais

The objective of this paper is to evaluate one of maritime investment projects’ intrinsic flexibilities, namely the ship-owner’s ability to switch between two kinds of charter contracts, the voyage charter and the time charter, which produce different levels of exposure to uncertainties. We consider a case study represented by the investment in a Suezmax tanker, using international market data. The Trigeorgis (1996) model of switching between operational modes was used to value flexibility, with cash flow simulations being used in the calculation of expanded present values. The time charter and the voyage charter freight rates, and the bunker prices were the uncertainties considered in this study, modeled as mean reverting processes. The study shows that the real option adds approximately 12.9% to the value of the project without flexibility.

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.

A Study on Cargo Damage and Carrier’s Responsibility resulted from Bad Stowage under Voyage Charter

A Study on Cargo Damage and Carrier’s Responsibility resulted from Bad Stowage under Voyage Charter

A Case Study on Demurrage and Deadfreight under Voyage Charter

A Case Study on Demurrage and Deadfreight under Voyage Charter

전세계 유조선시장의 항해용선 및 기간용선 거래량 추정모형 설정 및 예측

본 논문은 해상물동량이 외생적으로 주어질 경우 전세계 지역별, 선형별, 화물별 석유류 해상물동량과 유조선 선박거래량의 변화를 추정하는 항해용선 거래량 추정 모형을 구축하고 이를 통해 실제 예측을 시도하는 것이 주요 목적이다. 이를 위하여 본 논문에서는 유조선시장의 항해용선과 기간용선 메커니즘을 분해하고 선박용선DB에서 축적된 내용을 단계별로 적용하였다. 그 결과 전세계 유조선 항해용선 거래랑은 2000년의 2만 892척에서 2007년에는2만 5,751척으로 23.3% 증가할 전망이며, 이 가운데 극동지역의 거래량이 35.2%를 차지할 것으로 전망 되었다. 또한 우리나라의 유조선 항해용선 거래량도 2007에는 전세계 거래량의 9.3%, 극동지역 거래량의 26.6%에 이를 것으로 전망되었다. The purpose of this paper is to construct the model that enables to estimate the amount of tanker voyage charter by region or by ship size. This paper decomposed the mechanism of voyage and time charter step by step, and apply the accumulated date of KMI chartering database. The results of the estimation is that the amount of voyage charter in 2007 will be 25,751 or 23.3% increase compared with that of 2000. And the amount of voyage charter in Korea will be 9.3% of the world amount, and will be 26.6% of the Far East amount.

The Float‐On/Float‐Off Heavy Lift and Return Home of USS Cole

ABSTRACTOn October 12, 2000, terrorists bombed the USS Cole (DDG 67), an Arleigh Burke class destroyer. The vessel was in the process of receiving fuel while moored alongside a dolphin in the middle of the harbor at Aden, Yemen. With no local repair facilities and a tense diplomatic situation, the badly damaged, but stable vessel had to leave Aden for repairs at another site. After a few intense days of weighing different options, handicapped with limited information, the Chief of Naval Operations (CNO) granted approval on October 14 to pursue a heavy lift operation. Two days later on October 16, the Navy awarded a contract voyage charter to heavy lift/dry transport the vessel to the United States on board a semi‐submersible heavy lift ship. This paper will discuss a chronology of events and the associated engineering that culminated in the successful loading off the coast of Yemen and the safe transit home of this fully armed and badly‐damaged warship. Detailed discussion will include the following: events leading up to the decision to heavy lift, preliminary engineering done in Oslo, Norway, detailed engineering done on board MV Blue Marlin, planning and execution of the loading operation, post loading and seafastening, the decision to fit a temporary patch, route planning, and the voyage home. The paper will also present the salient and unique characteristics of the Marlin class, currently the world's largest semi‐submersible heavy lift ships.

Voyage Charters by Julian Cooke, Timothy Young, Andrew Taylor, John D. Kimball, David Martowski, and Leroy Lambert

Voyage Charters by Julian Cooke, Timothy Young, Andrew Taylor, John D. Kimball, David Martowski and Leroy Lambert. Published by Lloyds of London Press Ltd, (London. 1993, xcvii, 907 and Index 20 pp.). Hardback UK £125. Some 15 years after the publication of Time Charters (3rd ed., 1989) it is a pleasure to welcome the arrival of its companion volume, Voyage Charters. Regular users of the earlier treatise will experience no difficulty in handling its successor, since the authors have studiously followed the format adopted in Time Charters. Two standard voyage charter forms are used as the basis for a clause-by-clause commentary, successive sections being devoted to the treatment of English and US law and practice respectively. On this occasion the Gencon 1976 form is selected for the more extensive basic commentary, while the importance of the tanker trade to this type of documentation is recognized by the more selective treatment of the provisions of the Asbatankvy form. A third and substantial section of the text is devoted to a detailed commentary on the English law interpretation of The Hague and Hague-Visby Rules. While recognizing that one or other sets of Rules is frequently incorporated into charterparties it is an unexpected but welcome bonus to discover some 100 pages of text in a volume on voyage charters being devoted to a detailed discussion on the effect of these Rules. A final and valuable group of appendices include all the relevant English and US legislation and a selection of seven representative voyage charter forms. This is a substantial and well-presented piece of work running to 805 pages of text, me English commentary being provided by the combined efforts of Julian Cooke, Timothy Young and Andrew Taylor, while responsibility for the US Commentary is undertaken by John Kimball, David Martowski and LeRoy Lambert. This volume has clearly had a long period of gestation and the authors recognize that owing to the complexity of the subject, it ‘remains …

London Maritime Arbitration

### (a) Types of Disputes Referred AN ARBITRATION is usually described as a maritime arbitration if in some way it involves a ship. Most commonly, disputes will be referred under a charterparty. This may be for the hire of a ship for a period of time (a time charter), or the contract may simply be one for a voyage (a voyage charter) under which freight is paid, and in which there are provisions as to the amount of time (laytime) allowed to the charterer for loading and discharging, and liquidated damages (demurrage) to be paid if those times are exceeded. One thread which, not surprisingly, runs through most shipping disputes is that of time; as with detention during a voyage or during loading or discharging, or for repairs following an accident. Some years ago, as the law reports show, disputes most commonly arose under voyage charters, often concerning the calculation of laytime. Now, because time charters have come into common use for everyday business, the majority of cases concern that form of charter. Very often the off-hire provisions are under consideration. However, to limit a description of maritime arbitration to these agreements would be too narrow, for occasionally there are disputes under bills of lading, usually concerned with damage to or loss of cargo. Less frequently disputes may be referred under memoranda of agreement for the sale of ships. Such disputes usually concern delay in delivery, failure altogether to deliver or to take delivery, or technical issues as to the condition of the ship on delivery. There are also contracts of affreightment, under which a substantial exporter or importer may secure the agreement of a company for the supply of a number of ships to carry cargo over a period of time. The company, by no means always a shipowner, may then charter in ships on …

A TIME SERIES ANALYSIS OF POST-WAR FLUCTUATIONS IN SHIPPING FREIGHTS

When we discuss the business cycle in ocean shipping, the indicators we most commonly employ are the Index of Tramp Shipping Freights, and Index of Tramp Time Charter Rates or Index of Tanker Freight Rates, which are published monthly by the Chamber of Shipping of the United Kingdom or the Norwegian Shipping News. But people usually use these indices without sufficient knowledge about the nature of these economic indicators, namely as to what sort of movement these freight indices inherently trace. More concretely, no sufficient analysis has ever been made as to what extent these indices follow seasonal fluctuations, or whether there is any trend in the movement of these indices, or how are the period and amplitude of cycle, or whether it is susceptible to irregular factors etc. ; nor has hardly any study been made of the interrelation among these various freight indices, except the analysis of Lewis2), which treated the interrelation between voyage charter rates and time charter rates.