English for Port Management

DOCUMENTS USED IN SHIPPING

1. Introduction
International trade and the carriage of goods by sea involves a certain number of documents.

2.

Contract of Afreightment or Charter Party

A Charter Party is a contract between two parties the shipowner and someone who whishes to hire, i.e., charter a vessel for the transport of cargo from one port to another. According to the conditions agreed upon, there are three types of charter-parties: The demise or Bareboat Charter; The Time Charter; The Voyage Charter Under a Bareboat Charter, the charterer will be responsible for all operating costs (e.g. manning the ship, etc.) while the shipowner will only be responsible for costs related to investments, classification and eventually insurance. Under a Time Charter, the ship will be hired equipped and manned (with crew), for a certain period of time, which may be months or even years. During this period, the charterer can use the ship as he wishes. The charterer will be responsible for the commercial operation of the ship. The shipowner will be responsible for the technical operation and crew. A Voyage Charter is issued when the entire ship or part of it is chartered for the carriage of a certain cargo and for one or more voyages. Although the conditions are clearly stipulated in the contract, it is usually the shipowner who pays for the fixed and variable costs. Even the cargo handling costs can be stipulated in this contract. As an example, tramp cargo carriage is usually under a Voyage Charter Party

There are two main forms of ship operation: The Liner shipping The Tramping In Liner shipping, the cargo (several shipments/several shippers) is usually grouped in order to get the ship fully loaded. In this case, the shipowner would be confronted with a large number of shippers. So, the Charter Party is replaced by a document which is also standard and not subject to negotiations, Th Bill of Lading. In the case of Tramp shipping, where only full cargoes are transported, there is a Charter Party and a B/L.

English for Port Management

3.

Bill of Lading

According to Hamburg Rules the definition of Bill of Lading is as follows: Bill of Lading means a document which evidences a contract of carriage by sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. A provision in the document that the goods are to be delivered to the order of a named person, or to order, or to bearer, constitutes such an undertaking. The Bill of Lading states the conditions and terms in which the cargo was delivered on board the vessel and received. This documents works as a receipt for cargo loaded on board the vessel. It is then the evidence that the cargo is possession of the shipowner (the carrier) who is now responsible for it until it is delivered to the receiver of the cargo at the port of destination. The B/L contains a lot of information, such as: The names of the Shipper, Consignee and carrying vessel; The name of the person to be notified upon arrival at the port of destination; Description of the cargo (when it is not bulk cargo) including all the details about it, namely gross weight, cubic measurement, contents, package numbers, shipping marks, etc: Port of loading and port of discharge; Full details of freight, terms of the contract of carriage and terms of payment; The data when cargo was loaded on board; Number of B/L signed on behalf of the Master or his agent Masters signature (or agents) and date

The Charter Party can have any for and be drawn up by any company or individual and therefore be subject to negotiations about the Terms and Conditions. These negotiations can lead to strong arguments. Organizations such as BIMCO (*) have elaborated Standard Charter Parties. These Ccahter Parties have been established in function of a specific cargo or route or even more general in their purposes. There are numerous advantages in using these Standard Charter Parties, as follows: They are widely used; They are available everywhere; They are generally accepted by Court; There are no doubts for both parties.

**) P&I Associations usually recommend the use of Standard Charter Parties. Following, there is a list of the main recommended C/P:

*) BIMCO is an independent international shipping association founded in 1905, with a membership composed of ship owners, managers, brokers, agents and many other stakeholders with vested interests in the shipping industry. **) P&I - Protection and indemnity insurance, commonly known as P&I, is a form of marine insurance provided by a P&I Club. A P&I Club is a mutual (i.e. co-operative) insurance association that provides cover for its members, who will typically be ship-owners, ship-operators or demise charterers. Unlike a marine insurance company, which is answerable to its shareholders, a P&I Club is the servant only of its members.

English for Port Management

English for Port Management

English for Port Management

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