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INTRODUCTION
TOSHIPPING

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 Published by the

Institute o f Chartered Shipbrokers

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©Institute o f Chartered Shipbrokers 2016

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Terms o f use

VVhile the advice given in this book, Inưoduction to Shipping, has been developed using the best
iníormation currently available, it is intended purely as guidance to be used at the user’s own risk.
N o responsibility is accepted by the Institute o f Chartered Shipbrokers (ICS), the membership
of iCS or by any person, firm, Corporation o r organisation (who o r vvhich has been in any
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Institute of Chartered Shipbrokers

 Forew ord

Foreword
By Alan Marsh, Pormer CEO, Braemar Seascope
and former President, Institute of Chartered Shipbrokers
Shipping is the biggest industry in the world.This is a bold statement, but
one that 1will attem pt to justify.

Beíore a ship IS built, the naval architects and the classiíìcation societies
discuss the design with the shipowner.That's three sectors.

Shipping markets are studied which will involve shipbrokers.These may

also be involved in negotiations with a shipyard. Early in the piece, banks
will be involved, many having large ship-finance departments. A new-
building order is placed with a shipyard.We are now up to six.

The shipyard will buy Steel from steelmakers, engines from engine makers,
wiring, navigation and radar equipment, winches, ropes, paint and varnish,
windows, portholes, hydraulics, íurnishings, and cooking equipment írom
all the other thousands o f suppliers who are involved in the building and the fitting-out o f a ship.VVe must
be up to 50 industry sectors by now, employing hundreds o f thousands o f staff.

The vessel must be manned by officers and crew.There are about 100,000 seagoing ships trading, probably
w ith an average o f 20 personnel on board plus half as many again w ho may be on leave o r undergoing
training ashore.That is 3m people.Then there are the training colleges and the recruitm ent companies.

W hen the ship is ready to be delivered,there is a ships agent,ship’s pilot, bunker suppliers and tugs to to w
the ship out to sea.There are the navigation marks which someone has to manuíacture and put in place.
There are the chart makers w ho put on paper where these marks are and the channels they guard.The
u ndew riters and other Insurance employees are also closely involved. p&l Clubs aiso put in their share
o f hard vvork.

O u r new ship goes to load a cargo at a port.There are the p o rt authorities, pilots, tugs, linemen, berthing
masters, ships' agents, customs and immigration officials, p o rt State inspectors and coastguards.There are
835 active seaports in the vvorld plus several thousand smaller ports vvhich have differing amounts of
activity.We are entering the realms o f the uncountable in terms o f employed people.

And we have not counted the canal workers, the dredgers and the maintenance personnel as well as
the crane builders and those making other cargo-handling equipment. W e have also om itted the people
who bring cargoes to the ports such as barge crevvs plus peopie w ho manage the inírastructure around
the port.

O f cargoes carried around the vvorld, in excess o f 95% o f manuíactured goods as well as raw materials
such as oil, ore, grain and gas are transported by sea.This went largely unrecognised until pictures in the
media shovved babies nappies, powdered milk and high-powered m o to r bikes spilling out o f broached
containers on to a beach following the beaching o f a Container ship a few years ago.

W e also have to consider those who manage the ships from on shore - ship managers and cargo
suppliers and all those back-room support staff.And last but not least.those w ho train them, W e are now
discussing those highly proíìcient personnel such as those who w o rk directly o r indirectiy fo rth e Institute
o f Chartered Shipbrokers. And we are not tìnished there. Disputes may arise which may be settled by
arbitrators, by admiralty lawyers o r by the courts o f lavv.There are also the lavvmakers such as those at the
International Maritime Organization.

So when I say shipping is the biggest industry in the world, w ho can point out a bigger one? Oh, and then
there are the dockyards - enough said, I think. A part from one o r tw o highly publicised incidents, the
fact that this is mainly an invisible industry which does not register on most peoples radan is a tribute to
its success.

Introduction to Shipping iii

A cknow iedgem ents

Acknovvledgements
Pirst and íoremost, we w ould like to thank Alan Marsh for his inspirational support in the revision o f this
book. W e must also acknowledge the contribution o f several industry professionals, among them Pulvio
Carlini, A rth u r Kearney, Michael Robarts and John W a tt w ho have shared their vvealth o f knovvledge and
experience w ith the Institute.

Special thanks are due to Costas Lambrou fo r his eíĩorts in the review o f this book. Acknowledgement
must also go to Dinah Bromwich and Caroline Possey for their efĩorts in improving the quality o f the text.

The illustrations have been sourced from across the industry but particularthanks go to Danny Cornelissen
o f Port Pictures N L T h e artistry o f these images raises the stakes in the appearance and presentation o f
our maritime te x t books.

Contributing Editor
Costas Lambrou

Costas is a post graduate in Maritime and Marine Law and has a BSc (Hons) in Maritime Business and
Maritime Law. He currently manages the revievv and production o fth e Institutes publications and oversees
the Institutes administrative support o f the Educational Trust Fund.

Iv Institute of Chartered Shipbrokers

 C o n te n ts

Contents
Foreword

Acknowledgements IV

Contributing editor iv

I M a ritim e geography
I.I IN TR O D U C TIO N 2

1.2 OCEANS A N D SEAS 2

1.3 C O N TIN EN TS 2
1.4 WATERWAYS 8
1.5 PORTS 9

1.6 GEOGRAPHY OPTRADE II

T h e shipping business
2.1 IN T R O D U C T IO N 22
2.2 W H Y SHIPS? 22
2.3 THETHEORY OPTRADE 22

2.4 SHIPPING MARKETS 25

2.5 W HOTRADES? 28

2.6 C O N C LU SIO N 30

P ractitloners
3.1 THE SIX DISCIPLINES 32
3.2 THE INSTITUTE OF CHARTERED SHIPBROKERS 32
3,3 SHIP SALE A N D PURCHASE 33
3.4 SHIP M ANAGEMENT 34
3.5 C O N C LU SIO N 45

T h e supply of ships
4.1 A BRIEF HISTORY 48

4.2 THE SUPPLY OF SHIPPING 50

4.3 W H Y O P E fW E SHIPS? 54

4.4 PROTECTIONISM 55

4.5 SHIP REGISTRATION 55

4.6 PORT STATE CONTROL 57

4.7 SHIP CLASSIPICATION 58

Introduction to Shipping
C ontents

T h e ship
5.1 T O N N A G E A N D LOADLINES 62

5.2 TYPES OF SHIP 67

5.3 C A R G O -H A N D LIN G GEAR 69

5.4 TANKERS 70

D ry cargo chartering
6.1 IN T R O D U C T IO N 88

6.2 CHARTERING 89

6.3 CHARTERING NEGOTIATIONS 92

T an k er chartering
7.1 IN T R O D U C T IO N 98
7,2 DEVELOPMENT OPTANKERS AN D TH E T A N K E R MARKET 98
7.3 TYPES OPTANKER 99
7.4 TANKER CHARTER PARTIES 103
7.5 NEGO TIATING THE CHARTER 105
7.6 CHARTER PARTY FORMS 106

8 Liner trades
8.1 IN T R O D U C T IO N 108
8.2 A BRIEF HISTORY OF LINERS 108
8,3 CONTAINERISATION 109
8,4 CONPERENCES A N D FREIGHTTARiFFS 1 12
8.5 LINER D O C U M EN TATIO N 113
8,6 BILL OF ưXDINGTERMS A N D CONDITIONS 1 17

Accounts
9.1 IN T R O D U C T IO N 120
9.2 A C C O U N T IN G 120
9.3 CAPITAL 120
9.4 CREDIT 121
9.5 M ANAGEM ENT A C C O U N T IN G 12.5
9.6 CASH FLOW 125
9.7 COST5 126
9.8 TYPES OF COM PANY 126
9.9 EXCHANGE RATES 128
9.10 COM PANYACCOUNTS 128

vi Institute of Chartered Shipbrokers

 C ontents

10 Law of carriage
10.1 IN T R O D U C T IO N 130

10.2 PUNDAMENTALS OF ENGLISH LA W 130

10.3 ARBITRATION 13 1

10.4 THECONTRACT 132

10.5 REMEDIES FOR BREACH OF C O N TR A C T 133

10.6 TORT 133

10.7 CO NTRACTS R EƯ \TING TOTHE CARRIAGE

OF G O O D S BY SEA 134

10.8 LINER BILLS OF LAD IN G 135

10.9 HAGUE-VISBY RULES 136

10.10 HAMBURGRULES 138

10.11 ROTTERDAM RULES 139

10.12 AGENCY 139

10.13 BREACH OF W AR R AN TY OF AUTHO R ITY 140

10 .14 PROTECTION A N D INDEM NITY ASSOCIATIONS 140

Introduction to Shipping vii

C o ntents

Appendices Contents
Appendix I Lloyds Register o f Ships Sample Page 145

Appendix 2 Stowage Pactors 159

Appendix 3 List o f Charter Parties 161

Appendix 4 BALTIME 1939 (as revised 2001) 163

Appendix 5 Gencon C harter Party 169

Appendix 6 Major Differences between Voyage Charters

and Time Charters 173

Appendix 7 Chartering Expressions and Abbreviations 175

Appendix 8 Shellvoy 6 177

Appendix 9 Container Pixings 197

Appendix 10 ContainerTỵpes 199

Appendix I I Congenbill 2007 201

Appendix 12 Com binedTransport Billo f Lading 203

Appendix 13 Liner Booking N ote 205

Appendix 14 SeaVVaybill 207

Appendix 15 SHiPMAN 2009 209

Appendix 16 PONASBA Standard Liner Agency Agreement 231

Appendix 17 W orld'sTim e Zones 237

Appendix 18 Beaufort Scale 239

Appendix 19 BIMCO Ice Clause 241

Appendix 20 St Lavvrence Seaway 243

A p p e n d ix 2 l Kiel Canal 245

viii Institute of Chartered Shipbrokers

Appendix 22 Suez Canal 247

Appendix 23 Panama Canal 249

Appendix 24 Shipping Report 251

Appendix 25 Hague-Visby Rules 253

Appendix 26 Clause Paramount 259

Appendix 27 NewJason Clause 261

Appendix 28 Both to Blame Collision Clause 263

Appendix 29 W ar Risks Clause 265

Appendix 30 Hamburg Rules 267

Appendix 31 Rotterdam Rules 281

Introduction to Shipping ix
Institute of Chartered Shipbrokers
Chapter I
• • • •

Maritime Geography

Bridge o f the Am ericas-Panama

C h a p te r I

1.1 IN T R O D U C T IO N
As well as dealing with ships themselves and the markets in which their business is arranged,
this book explores the geography o f the mantime and commercial world. It considers some of
the legal aspects o f working in the business o f shipping and, as all commerce must eventualiy
concern Itself with money, looks at basic accounting matters and corporate structures.

Readers should try to have a simpie school atlas to hand fo r reíerence.The object o f this chapter
is to highlight those elements that have an influence on maritime matters.

In conventional geography, the tendency is to study the land and to look on the oceans as
merely the blue areas that separate the land masses. In shipping, interest is concentrated on the
seas, the Coastal areas and any other geographical factors that impinge on the industry.

1.2 OCEANS A N D SEAS

There are a great many seas.There is the N o rth Sea, the Mediterranean Sea, the South China
Sea, the Red Sea and the Caribbean Sea.There are five oceans. Study an outline map o f the
world. It will be seen:

• Atlantic Ocean

• Pacific Ocean

• Indian Ocean

• Arctic Ocean

Antarctic (o r Southern) Ocean

1.3 C O N T IN E N T S
There are seven continents which, in descending order o f land mass, are:

• Asia

• Afnca

• N o rth America

• South America

• Europe

• Antarctica

• Australia

1.3.1 Latitude and longitude

It will be noted also on an outline map o f the w orld that some straight lines have been dravvn.
in order to consỉder the signiíicance o f those lines it is im portant fìrst o f all to understand how
mariners identity their position anywhere on Earth.

To establish a position it is necessary to re íe rto a universally accepted grid o f lines running east
to west, vvhich are called parallels o f latitude. Lines running north to South, from N o rth Poie to
South Pole, are called meridians o f longitude.

There are 360 meridians o f longitude, each one being reíerred to as a degree (°); each degree is
sub-divided into 60 minutes (’) and each minute into 60 seconds Refer now to the map and
note the line running north to South cutting through England.This runs through a south-eastern
suburb o f London called Greenwich where a famous astronomical observatory was established
in l675.This line is 0° longitude and is reíerred to as the Greenwich Meridian o r the Prime

Institute of Chartered Shipbrokers

 M a ritim e G eography

Meridian. Longitude is thereíore reíerred to as so many degrees, minutes and seconds east or
west o f the Greenvvich Meridian.

Map of the world showing meridians of longitude and parallels of latitude

The Earth revolves on its axis once every 24 hours and thus the apparent movement o f the sun
in one hour will be 15° o f longitude.

It will be apparent that 180° west is the same as 180° eastThe tim e the Earth takes to reach this
longitude in its daily rotation is 12 hours.This is why, on a map.there is another vertical line, one
that is n o t completely straight.This is the International Date Line. If you cross this line from east
to west the date is put back, w ith the result that there are tw o consecutive days o f the same
name. If you cross it in the reverse direction, a day is apparently lost.The line is bent to avoid
passing through countries, which vvould be inconvenient fo r people in those places.

In the case o f latitude, the 0° line is the equator. Positions are reíerred to as so many degrees
north o r South. The N o rth Pole and South Pole are 90° north and South latitude respectively.
Parallels o f latitude serve another purpose, because distances at sea are measured in nautical
miles. A nautical mile is one minute ( I ') o f latitude so if you travel 60 miles due north o r South
your latitude will have increased by one degree (1°).

Accordingly, speed at sea is measured in knots. One knot is one nautical miie per hour

1.3.2 Charts
Because the Earth is a sphere, depicting it on a flat page presented mapmakers w ith a problem.
There are several examples o f solutions to this problem, known as projections.The projection
you are most likely to encounter in shipping business is the Mercator projection, named afterthe

Introduction to Shipping
C h a p te r I

inventon a 16th-century geographen Mercators projection is based on the idea o f vvrapping a

cylinder o f paper round the globe and projecting an image o fth e vvorlds íeatures on it. Its main
advantage is that it shows compass directions correctly, which is vital fo r navigators. Hovvever, it
distorts sizes because the íarther away from the equatonthe largerthings appear,

This IS no problem tb r navigators because they measure distances according to the latitude
scale, along the edge o f the chart, vvhich distorts at the same rate as other íeatures.

Today, new ships are equipped with an electronic chart display and iníormation system (ECDIS).
This equipment permits the chart and radar iníormation to be combined on a single screen,
vvhich assists navigation. Also, the chart iníormation can be updated automatically using data
broadcast over satellites. All ships are obliged by International Convention fo rth e Saíety o f Life
at Sea (SOLAS) to use official charts produced by national hydrographic bodies such as the
UK Hydrographic Office.These have traditionally been called Adm iralty charts. Electronic chart
systems link data from a ships global navigation satellite system (GNSS) equipment to a chart
displayed on a Computer screen.

ECDIS is being made mandatory under SOƯKS on all ships in a rolling timetable. Every merchant
ship will be íìtted vvith it by I July 2018. ECDIS must be able to display oíĩìcial electronic
navigational charts (ENCs), but it can also make use o f unoíĩìcial charts that are produced for
commercial purposes.

1.3.3 T im e
Reference was made earlier to the way the rotation o f the Earth causes the tim e o f day to vary
according to vvhere one is situated.

Most time zone charts use noon on the Greenwich Meridian as the datum; this is known as
Greenvvich MeanTime (GMT). Porconvenience, seaĩarers a lte rth e ir watches as the ship crosses
tim e zones, but navigation alvvays uses G M TThis follows the tradition established in the pre-
electronic age when the ships chronometer, an extremely accurate clock, was set to GM T and
never altered.

Countries in Europe and N o rth America experience major changes in the amount o f daylight
depending on the season.They have long nights and short days in vvinter and the reverse in the
summer.These countries change their ciocks by advancing them one hour in the spring. This
is often reíerred to as daylight saving tim e.The clocks are put back again in October. Modern
computers change their clocks automatically.

Time zones and clock changes are im portant considerations ío rth o se in the shipping business,
particuiarly when negotiating a charter w ith the tim e limits that are an essential part o f oííers
and counter-oíĩers. For example, the N ew York shipping market is five hours later than the
London market. A London broker wishing to discuss market iníormation w ith a colleague in
NevvYork should wait fo r a few hours after getting into the offìce, as otheiAvise their opposite
num ber in N ew York will still be asleep. On the other hand, the London broker’s Japanese
counterparts may be on their way home, as offices will already be closing inTokyo.The USA
has its own problerns, because it has five tim e zones vvithin ỉts ovvn borders and Russia has nine.

i.3 .4 Tides
The rise and fall o f the tides is im portant in shipping.Tides rise and fall because the moon's
gravity works in conjunction with the Earths own gravity. In most places in the w orld there are
tw o high tides and tw o low tides each day.The gravitational pull o f the sun also has an effect,
and when the sun’s pull is vvorking with that o f the moon, the high tides are very high.The low
tides are very low and are called springs.When the sun and the moon are not pulling together
the tidal range is small and these are called neap tides. Spring tides occur approximately tw ice
a month.

Institute of Chartered Shipbrokers

 M a ritím e G eograph y

SPRINGTIDE lunartide solartide

o new moon full moon

NFAP
K C H r TinE
liu c É
p quarter

lunar tide

o solar tide

first quarter
moon

Magnetic íorces causing tides © bayoffundy.com

The difíerence between high and low tides varies from place to piace. In London.the tidal range
is about 6.5m between high and low on spring tides and 4.3m range on neap tides. Compare
this w ith the Bay o f Fundy, the inlet between Nova Scotia and N ew Brunsvvick in Canada,
where the spring tide range is more than 15m betvveen high and low tides. Conversely, in the
Mediterranean.the greatest range between high and low tides is less than I m.

The tim e o f the rotation o f the moon round the Earth is not an exact day, so the times o f tides
vary.This can be calculated precisely so that almost all the world's ports publish tide tables. Such
tables can be o f vital interest to shipping because the rise and fall o f tides determines how deep
the vvater will be in the p o rt area.This dictates when ships can reach the p o rt and when the
water is to o shallow to accommodate the ships draught.

In some ports, the draught is deep enough at high vvater to allow the ship to enten but when
the tide falls the ship goes aground.This is reílected in a chartering term, not always aíloat but
saíely aground (NAABSA).The effect o f neap tides can have a serious effect on NAABSA ports
because a ship near the upper limit o f the permitted draught may enter vvithout diííìculty on a
reasonably high tide but may become trapped fo r several days if the neap tide occurs vvhile the
ship is at the berth.

One way that some ports have overcome the tidal problem and ensured that ships stay afloat
throughout their stay is to construct enclosed docks.These are large basins cut into the land
that can be sealed from the tide by lock gates.This is an expensive solution, but the advantages
outweigh the costs as they allow large ships to be accommodated w ithout any risk o f going
aground. Also, as the w ater level vvithin the dock is constant,the ship remains on the same level
relative to shore appliances.The disadvantage is that the dimensions o f the dock and its locks
limit the size o f ship that can enter Ships have become larger since the docks w ere built, so
many enclosed dock systems can no longer be used fo r oceangoing trade.

Locks are simply short sections o f watenA/ay with vvatertight gates at each end.The vvater level

Introduction to Shipping
C h a p te r I

is adjusted by means o f sluice gates to match the level at the entrance side when that set o f
gates is opened. A fte r the vessels have entered the lock, the gates are closed behind them and
the w ater level again adjusted, this tim e to match the level on the exit side.VVhen the exit gates
are opened the ships proceed to their berths. As well as being used to enter enclosed docks,
locks can a!so be used to lift ships over high ground in long canal systems. Howeven passing
through a series (known as a flight) o f iocks is a slow process.

1.3.5 C urrents
Fast currents can cause particular problems in estuaries, vvhich are the wide entrances to rivers.
Currents also flow through narrovv gaps betvveen pieces o f land. An example is the Pentland
Pirth, between the northern tip o f the Scottish mainland and the O rkney Islands. The tidal
current through this gap can flow at eight knots o r more and some vessels in the past were
unable to make headvvay against this flow.

Image from space by NASA shovving ocean currents in the Atlantic Ocean

O th e r currents are related not to tides but to the effect o f prevailing winds. O ne o f the most
powerful o f such currents IS the G ulf Stream.This flows diagonally across the Atlantic Ocean
from the south-vvest, the G ulf o f Mexico, to the north-vvest corner o f Europe. As this w ater is
w arm it has the effect o f producing a mild climate in the British Isles and parts o f north-w est
Europe.

O th e r íactors aiso play the ir part in the creation o f ocean currents and all can affect a navigators
task, but the subject has been well researched and reíerence books teli seaíarers what currents
to expect in any part o f the world.

1.3.6 W in d and w e a th e r
The weather is the least predictable o f elements, and even though modern ships are not
dependent on the wind as sailing ships were, it remains an im portant íactor in shipping. Very
high winds and rough sea conditions are still responsible fo r delays, damage and actual loss o f
ships. Particularly severe are tropical storms, which have different names around the w orld but
have the same devastating effect. In the area around the G ulf o f Mexico and the Caribbean
islands they are called hurricanes and occur betvveen June and November, with the most severe
tim e being betvveen August and O ctober In the Far East they are knovvn as typhoons, fo r vvhich
the season is May to Decemben with maximum frequency betvveen Juiy and Septemben In the
Indian Ocean the term is cyclones, which have various seasons in diíĩerent parts o f the region,

Institute of Chartered Shipbrokers

 M a rítim e G eograph y

but the w orst periods are during the middle and at the end o f the year.When these cyclones
reach the north-west corner o f Australia they are called willy-willies o r williwaws.

Severe storms have been responsible for the loss o f many ships. In recent times, large bulk
carriers have been the w orst victims. A typical exampíe was the bulk carrier Derbyshire, vvhich
was loaded with iron ore and was lost vvith its entire crew in a typhoon.The disaster occurred
so quickly that there was not even tim e fo r the ship to send a distress signal on the radio.

Even moderately strong vvinds and high seas can delay shipping.The strength o f the wind is
still reíerred to according to the Beauíort W ind Scale, which was developed by Admiral
Beauíort about 150 years ago.The Beauíort Scale also includes the State o f the sea at different
wind strengths.

Adverse weather that afFects the períormance o f a ship can cause a problem if the vessel is
on a tim e charter, Speed and fuel consumption are both im portant terms in a tim e charter
The charterers costs are seriously affected by the tim e taken on a voyage and the quantity o f
fuel used, oíten resulting in disputes betvveen charterer and ovvnerThis is especially so if the
charterer doubts the accuracy o f the entries in the ships logbook. Hovveven disputes have been
reduced because meteorological specialists are able to provide accurate records o f vveather
conditions all ove rth e world. Such ocean routeing companies can advise the best route to take
to avoid severe weather and in certain tim e charters the owners insist on w eather routeing
being employed. A routeing Service will advise masters if they need to change course to avoid
a storm and, similarly, the master can tell the routeing company about the actual vveather
conditions the ship is experiencing.

.3.7 Ice
In some parts o f the world, particularly the N orthern Hemisphere, ships are at risk o f being
trapped in sea ice. Particular problems are íound in ports vvhere tim ber is loaded in the Baltic
Sea, W h ite Sea and Gulf o f Bothnia, and also ports in north-west Russia. A nother vulnerable
area is the St Lavvrence River and the whole o f the Great Lakes in N o rth America. A t certain
times o f yean if ships arrive late at Great Lakes ports they I'un the risk o f becoming trapped in
the Great Lakes system, because the St Lavvrence Seavvay has to be closed in vvinter to prevent
the lock gates being damaged by ice.

Port authorities in Scandinavia and in the St Lavvrence River try to keep some open w ater by
employing icebreakers. These ships are specially designed to break through ice. Some Russian
examples are nuclear-powered. Icebreakers allovv some o f the Scandinavian tim ber ports to stay
open all year round unless the ice becomes unusually thick. In the St Lawrence, the authorities
try to maintain access as far up river as Montreal.

Icebergs still pose a dangerto shipping

lcebergs are pieces o f the Polar ice cap o r parts o f glaciers that break free and can float into the
shipping lanes.They can be hard to spot, even with modern navigational equipment and advance

Introduction to Shipping
C h a p te r I

vvarnings, so they still pose a danger to shipping.The N o rth Atlantic and the deep Southern
Ocean are the areas o f greatest risk.

The Baltic and International Maritime Council (BIMCO) issues weekly reports on ice conditions.

The development o f the N orth-W est Passage and N orthern Sea Route across the Arctic Sea
for use by merchant ships has created interest in ice movement, ice navigation and the operation
o f ships in ice. It is anticipated that íurther development will occur in íuture years due to climate
change. Using the N orth -W est Passage and N orthern Route will reduce the physical distance
from Asia to northern Europe and N o rth America, and provide access to Russias northern
ports and opportunities fo rth e exploitation o f the natural resources o f the Arctic Sea.

Merchants vvhose usual ports and routes are closed by ice will need to use alternative means
o f transport and use ice-free ports, For example, Narvik can be used as an alternative to the
northern Baltic ports, o r the Atlantic seaboard ports o f Canada can be an alternative to the
northern Canadian ports.

Severe vveather conditions do not merely interíere w ith safe navigation. Cargo-handling
operations in ports and on interior transport routes may also face diffìculties. In severe cold,
for example, Steel becomes more brittle and machinery can fail as a result. Diesel oil becomes
waxy o r freezes, and, o f course, human beings cannot function properly fo r long in extremes o f
temperature.

1.4 W A TER W A Y S
Two types o f w a te w a y are im portant in shipping: natural waten.vays such as rivers, estuaries
and creeks, and man-made wateways.

Natural waterways provide the shelter that ships need when loading and discharging. Many
major cities owe their very existence to the access afForded by a riven Londinium, founded by
the Romans nearly 2,000 years ago, is a typical example. London was as far up the RiverThames
as they could travel by ship and also the lovvest point at vvhich the river could be crossed on foot.

Many othertovvns and cities began as ports, including:

Buenos Aires - River Plate

Kolkata - Hooghly River

Hamburg - River Elbe

Lisbon - RiverTagus

Montreal - St Lawrence River

Philadelphia - Delav^are River

Man-made waterAA/ays are constructed fo r one o f tw o reasons, e ith e rto reduce sailing times on
a regularly used route o r t o provide access to an inland region.

The most ambitious vvatervvay to provide access to a major inland region is the St Lavvrence
Seaway. Constructed in the I950s, it enables oceangoing ships to penetrate N o rth Am erica as
far vvest as Chicago and Duluth in the USA and Fort VVilliam in Canada.This gives access to the
vast grain-producing areas in the centre o f the N o rth American continent. The St Lavvrence
used to be only navigable up to Montreal untii the Lachine Canal was dug.This bypassed the
Lachine Rapids and allovved small ships to reach Lake Ontario, but the Niagara Falls prevented
any íurther access.The maximum dimensions o f a vessel able to pass through the locks, knovvn
as Seawaymax, are 225.6m length overall (LOA), 23.8m beam (vvidth) and 7.92m draught. Many
charters operate on the basis o f loading to 5eaway draught in the lakes and then completing
in Montreal.

8 Institute of Chartered Shipbrokers

 M a ritim e G eography

Opened in 1894, the Manchester Ship Canal was designed to enable oceangoing ships to reach
the industrial heartland o f north-west England, which was at one tim e a world leader in the
spinning and weaving o f cotton im ported from the Southern United States o f America.Today’s
deepsea vessels cannot use the canal because o f size restrictions imposed by the numerous
locks, but small ships still call at ports along the waterway and at quays in Manchester. The
ow ner pians to revive the canal fo r Container shipping to avoid road congestion. Maximum
vessel dimensions are I6 l.5 m LOA, I9.35m beam and 7,3nn draught.

The íìrst canal designed to reduce sailing tim e was the Kiel Canal, vvhich joins the N o rth Sea to
the Baltic, chieíly so the German Navy could avoid the stormy vvaters north o f Denmark. It was
opened in 1895 but made use o f some parts o f an earlier watervvay,the Eiderkanal, constructed
in 1784, and in 19 14 it was widened and deepened. Maximum dimension fo r ships are 235.5m
LOA, 32.5m beam and y.Omm draught (o r 9,5m draught fo r ships up to 160m LOA).

Far more significant was the construction o f the Suez Canal. The watePA'ay, vvhich joins the
Mediterranean Sea to the Red Sea, drastically shortened the distance between Europe and
Southern Asia. W o rk on the canal began in 1859 and it was officially opened 10 years later.
As the diữerence in w ater levels betvveen the Mediterranean and the Red Sea never exceeds
1.25m there was no need to construct locks.This has made it far easierto vviden and deepen
the canal from tim e to time to match the growth in ship sizes.Today it can accept ships o f 20m
draught, o r 240,000dwt.

People had considered cutting through the slim isthmus that joins N o rth America to South
America as early as 1550. The Prench began to build a sea-level Panama Canal in the I880s,
but after the original prom oters went bankrupt, the United States government to o k over the
scheme in l904.The builders incorporated lakes and rivers into the canal, but had to build three
sets o f locks to raise and lovver ships a total o f 26m.The canal was opened in 1914, linking the
Atlantic Ocean with the Pacific Ocean.

The Panama Canal is o f vital importance fo r trade betvveen Europe, America and the Far East,
and also fo rtra ffic between the east and west coasts o f the USA.To accommodate larger ships,
new locks are being built and channels are being deepened and widened.The enlarged canal is
expected to open in 2016, when it will be able to take vessels o f 366nn LOA, 49m beam and
I5.2m draught.These dimensions are knovvn as N ew Panamax.They will be capable o f taking
Container ships up to about 13,000teu o r Capesize bulk carriers on a part cargo o f about
I 30,000 tonnes.

1.5 PORTS
Ports form the beginning and end o f a sea voyage and are the interíace betvveen the ship and
the shore. Even today, ports vary widely in their degree o f deveiopment and sophistication. Some
are simply a reasonably sheitered inlet creek o r river mouth. Here a ship may lie at anchor and
load o r discharge into barges that ply between ship and shore. A t the other end o f the scale are
highly developed systems o f quays and terminals.They have the most technologically advanced
systems o f moving the cargo to and from the side o f the ship and into and out o f its holds o r tanks.

It can be interesting to discover why a p o rt has developed in a particular location. In many cases,
a p o rt and then a tow n grew up because the position was conveniently placed on a natural
trading route. A position sheltered from rough seas plus a good depth o f vvater have stimulated
the development o f many ports - Southampton, on Englands South coast, is a typical example.

In many cases, a p o rts original purpose has long since disappeared. However; a centre o f
population often grows up around a port, generating new traffic. Several ports in the UK began
as coal e xp o rt outlets and atter coal exporting íìnished they continued in operation serving
other trades.

Ports are still being created as outlets fo r particular commodities. Exports o f coal and iron ore
írom Australia have prompted the building o f huge automated loading terminals.These are often

Introduction to Shipping
C h a p te r I

sited far from any population centre but benefít from shelter and deep water and are as close
as possible to the mines and quarries they serve.

Mineral extraction is far from the only reason to create a port, and some are built even where
there is little o r no local trade. Containerisation has encouraged a great increase in the size o f
ships, but these ships are very expensive to run. Shipowners are thereíore keen to keep voyages
as short as possible. Instead o f calling at a series o f ports, the big Container ships tend just to
serve one o r tw o deepvvater hub ports that have fast, eíĩìcient handling equipment. Containers
are unloaded and transíerred to smaller vessels o r other transport modes that can make the
onward deliveries to smaller ports and inland destinations. Felixstowe, in eastern England, has an
almost entirely agricultural hinterland but is well positioned to despatch containers all over the
UK and to w o rk w ith íeeders to many places on the European mainland. Similarly, the recently
opened London Gateway, to the east o f the city, has been designed from the outset with direct
rail and trunk road connections so it can serve London and the vvhole o f south-east England.

The busy port of Singapore

Singapore has a very limited land area behind ít. But its strategic position enables its transhipment
traffic to keep it among the top three Container ports in the w orld.The p o rt o f Colombo, in
Sri Lanka, originally built to serve the local tea, rubber and coconut trades, is aiming to emulate
Singapore as a transhipment p o rt fo r the Indian subcontinent. Port Louis, Mauritius, serving a
national population o f little more than I m, IS expanding its deepwater Container terminai to
cater fo r transhipment to the islands o f the western Indian Ocean and has also set itself up as a
regionai hub fo r cement, seaíood and bunkering.

W hen engaged in charter negotiations, the owners o f a less specialised ship, let us say a multi-
purpose tramp, have many íactors to consider when deciding on a port. Many o f these affect the
íìnancial outcome and some may even deterthem írom accepting. Some o f these considerations
are listed below.

1. The location o f the loading p o rt relative to the ship’s present position.This is the distance
the ship would have to sail in ballast to reach the ioading p o r t

2. Limitations such as:

(a) depth o f vvater on approaches and alongside;

(b) size o f locks, if any;

(c) tides;

(d) any adverse weather problems;

(e) political problems.

10 Institute of Chartered Shipbrokers

 M a ritìm e G eography

3. Costs - port, pilotage, towage and other charges, which can vary greatly between ports.

4. Cargo-handling systems and vvorking schedules.

5. Pacilities fo r repairs and/or servicing o f equipment.

6. Availability and cost o f stores, especially bunker fuel.

7. The location o f the discharging p o rt relative to obtaining the ships next cargo o r the
distance to sail in ballast.

8. Availability o f a trustw orthy agent.

1.6 G E O G R A P H Y OF TR A D E
Moving goods by sea o r w atew ays is by far the most economic method o f transport in terms
o f cost per tonne carried. It is estimated that over 95% o f the world's trade is carried by sea.
Shipping is a giobal business. Shipovvners, operators, brokers, managers, agents and other
specialists are involved with transporting materials, equipment and people from one part o f
the vvorld to anothen For all involved in shipping a good knovvledge o f maritime geography,
concerning the location o f nations, oceans, seas, ports and watenA^ays' is im portant Spatial
avvareness, in particular; distance and tim e relationships betvveen the world's major ports is
o f value. Access to a maritime atlas such as Lloyđs M aritim e Atlas o r The Ship's Atlas helps the
shipbroker appreciate maritime geography.

Sea transport plays a crucial part in international trade. The continual improvement and
development o f ship types and cargo-handling systems has led to a reduction in the cost o f sea
transport.The cost o f sea transport is no longerthe b a rrie rto trade it once was. Improvements
have encouraged international trade ensuring a steady increase in the amount o f cargo moved.
In 2 0 13 a total o f 9.5bn tonnes o f cargo was moved in internationai trade by sea.

O f the many raw commodities moved in international trade by sea, four are dominant,
namely, crude oil, coal, iron ore and grain.The movement o f semi-processed commodities and
manuíactured goods involves the Container shipping industry.These five im portant trades will be
brieíly considered.

1.6.1 Raw m aterials

Readers o f this section should endeavour to obtain copies o f shipping ịournals that re p o rt on
ships' íìxtures.These display the maịor routes fo r raw materials, especially the basic commodities.

Coal
Coal is an energy source. Steam coal is used fo r power generation and coking coai as a heat
source in industrial processes, particularly Steel making. In 2013 about 7,800m tonnes o f coal
w ere mined and consumed. O f this amount about 1,300m tonnes were transported by sea
from the sources o f production to the industrial centres o f the w orld vvhere Steel is made and
pow er consumed. In spite o f the fact that burning coal is not a very environmentally íriendly
process, it is still used to generate around 40% o f the world's electricity.

Coal has a stovvage íactor (SF) o f about l.4m^ per tonne.The 5F o f a dry cargo is defined as
the ratio o f the volume o f a cargo to its vveight, the units being cu - per tonne o r cubic íeet
p ertonne .

Coal is transported by bulk carriers, which may o r may not be equipped with discharging gear,
Loading is usually by conveyor from shoreside. VVhere deep w ater is available at both ioading
and discharging ports, Capesize bulk carriers o f over 80,000dwt can be used to take advantage
o f economies o f scale. VVhere restrictions dictate smaller parcels o f bulk cargo, Panamax bulk
carriers o f 60,000-80,000dw t o r the smaller handymax bulkers are employed. Coal may be
discharged by cranes w ith grabs at specialised terminals that serve steelvvorks o r power stations.

Introduction to Shipping II
C h a p te r I

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12 Institute of Chartered Shipbrokers

 M a ritim e G eography

Grain
Most grains traded in bulk are destined for human o r animal consumption.They include wheat,
sorghum, soya, rice and the seeds o f crops such as rape, sunflower, flax and cotton. Some grains
are processed into pellets o r meal p rio rto shipment.

Demand and supply fo r grain varies each yean depending on the quality o f the Harvest and
climatic events, such as íloods and drought.The changes affect volumes, prices, availability and
ultimately, trading patterns. In 2013, the movement o f grain by sea amounted to 384m tonnes.
General purpose bulk carriers are used ío rth e carriage o f grain cargoes.

In reported fixtures o f the grain market the abbreviation HSS is sometimes used to describe
a grain cargo. HSS is a shipping term reíerring to heavy grains, soya beans and sorghums.The
heavy grains have an SF o f about i .3m^ pertonne, which is not dissimilarto coal.

There is a danger in carrying grains and seeds in bulk, namely that o f cargo shift. In extreme
cases, cargo shift can lead to capsize o f the ship. To avoid this problem, bulk carriers have
self-trímming holds o r special wing tanks that bleed cargo into the main hold.This ensures that
space created above the cargo o f grain as it settles is filled.There are alternatives to preventing
the shift o f cargo including the use o f shiíting boards o r over-stowing the bulk grain cargo vvith
bagged grain.

Loading o f grain is usually undertaken from shore silos by loading chute. As w ith all cargo
handling, time is money. Grain-loading equipment is capable o f loading ships at a rate exceeding
30,000 tonnes per day. Discharging íacilities vary considerably, the íastest and most effìcient
being the pneumatic suction systems in use at most o f the world's major grain-importing ports.
O th e r methods o f discharge include mechanical bucket o r screw elevators o rth e use o f grabs.

Production o f grain for exp ort is concentrated in the íertile agricultural areas o f the w orld
including the Canadian and N o rth American grain belt, Argentina, Uruguay and Brazil in South
America, Australia, N ew Zealand,Thailand and its neighbours in the Far East, and Russia. Grains
and seeds are purchased by the highly populated industrial areas ọ f the w orld and are shipped
to third w orld counthes as seed fo r planting, human o r animal consumption on in some cases,
fo r famine relief.

Introduction to Shipping 13
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14 Institute of Chartered Shipbrokers

 M a ritim e G eography

Iron Ore
Most o f the w o rld ’s metals are produced from smelting mineral ores, such as iron ore which
produces Steel, o r bauxite which produces aluminum. In most cases, the process is carried out
some considerable distance from where the ore is mined.

Iron ore is used for the production o f iron and Steel and is the single largest dry bulk cargo
traded. In 2013, about l.3bn tonnes o f iron ore were moved by bulk carrien China was the
largest im porter o f iron ore receiving more than 730m tonnes. Australia was the largest
expo rte r exporting in excess o f 524m tonnes.

Iron ore is a dense cargo. Concentrated iron ore typically has an SF o f about 0.3m^ per tonne
compared with coal which has an SF o f I Arrv' pertonne.

Iron ore is carried in specialist bulk carriers which have relatively small holds on to p o f deep
double-bottom tanks. The structural arrangement provides strength whilst reducing stress
caused by a large metacentric height, a measure o f stability. The largest bulk carriers are o f
400,000dwt and require a draught o f 23m.They are known asValemax o r Chinamax ships and
are designed to carry iron ore betvveen Brazil and China.

Iron ore is loaded and discharged at specialised terminals.An iron ore-loading terminal will have
deepvvater alongside, a specialist ship-to-shore loading gantry and extensive stock areas vvhich
feed the cargo to the ship by using a reclaimer and a series o f high volume conveyors. Discharge
is usually carried out using gantry-type grab-fitted cranes, with the iron ore being moved from
the quayside by conveyor belts through a stacker to the storage stack.

Introduction to Shipping 15
C h a p te r I

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16 Institute of Chartered Shipbrokers

 M a ritim e G eography

Crude Oil
Crude oil is the single most im portant com m odity traded in the w orld today. VVorld demand
for crude oil in 2 0 14 was over 4 ,1OOm tonnes, o f which more than 1,800m tonnes vvere carried
by sea transport. Crude oil is a natural product. Signiíìcant oiltìelds have been discovered and
exploited in various parts o f the w orld - principally in the areas o f the Middle East, the Caspian
Sea, equatorial W est Aírica, the Caribbean and u s Gulf, north and east o f South America and in
the N o rth Sea.

Economics dictate that the most cost-efíective structure fo r the crude oil industry is to transport
crude oil from areas o f production to reíineries located in the areas o f consumption, close to
the end-user.

Crude oil tankers, which make use o f the economies o f scaie, are among the largest ships in
the vvorld. Crude oil tankers are speciíìcally designed fo rth e carriage o f crude oil and are rarely
used in other trades.The size o f a crude oil tanker is limited by the restrictions imposed at the
principal loading and discharging locations.The locations are not necessarily conventional ports
as loading and discharge terminals may be located oíĩshore. An example is LO O R the Louisiana
Offshore Oil Port, located in the G ulf o f Mexico. LOOP has been developed because it allovvs
tankers w ith deep draughts to discharge their cargo in an area where the conventional ports
are draught-restricted.

Consumers depend on oil products, derived from crude oil to pow er transport vehicles, fo r
heating, pow er generation and as a feedstock fo r many industries. In 2014 in excess o f 850m
tonnes o f oil Products were carried by sea. Petroleum, diesel and heating oils are among the
many products o f the refining process.

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Introduction to Shipping 17
C h a p te r I

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18 Institute of Chartered Shipbrokers

 M a rítim e G eograph y

1.6.2 M anufactured goods

The trade in manuíactured o r semi-manufactured goods follows quite different routes. W hile
the movements in raw materials tend to be predominantly north to South, general cargo routes
are predominantly east to west. Examples are between Europe and N o rth America (trans-
Atlantic), west coast USA to and from the Far East (trans-Pacifìc), Europe to and from the Indian
subcontinent, south-east Asia and the Far East.

Car carrier waiting to berth

VVoridvvide Container trades, vvhich are almost entirely made up o f manuíactured o r partly
manuíactured goods, are expected to reach 1,000m tonnes a year very soon.

Cars and trucks, carried in specially designed ships, have also become a global trade.
Manuíacturers now construct vehicles, o r parts o f vehicles, in countries other than their
own. The netvvork o f lines carrying cars and trucks is almost as complex as that o f the
Container trade.

Introduction to Shipping 19
C h a p te r I

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20 Institute of Chartered Shipbrokers

 iỉỉ^

The Shipping Business

Pehmarnsundbrũcke - Kiel Cơnơl

C h a p te r 2

2.1 IN T R O D U C T IO N
Shipping can be divided into four main sectors.Two o f these carry cargoes in bulk and travel at
a íairly sedate speed.The third moves faster and carries passengers.The íourth segment is the
Container trade. Unlike buik commodities, consumer goods are needed relatively quickly in these
days o f just-in-time inventory logistics. For this reason, oceangoing Container ships are usuaily
capable o f speeds 50%-80% íasterthan bulk carriers and oil tankers.

2.2 W H Y SHIPS?
More than two-thirds o f the w o rld ’s suríace is covered by vvater. Passenger ships certainly need
to take their human cargoes from one place to another but the substance o f this book is the
need fo r ships to carry cargoes.

The demand fo r ships is derived from the demand fo r the goods that they carry; that is why
economists reíer to merchant shipping as a derived demand.The customer wants those goods
to be delivered to them saíeiy and at minimum cost. O ne o f the largest expenses in the shipping
business is fuel, so there is serious pressure to reduce fuel consumption.The faster a ship travels,
the more fuel is burned, so the best way to limit fuel cost is to limit a ships speed. Speed at
sea is measured in knots, vvhich is the w ord fo r nautical miles per hour.A nautical mile is 1,852
metres, which is approximately 6,080ft.

Goods that have to be delivered quickly can be sent using other íorms o f transport such as
airíreight. This is ideal fo r small and pertiaps valuable items o f cargo. AirTreight is expensive,
howeven so shippers are careíui about which mode o f transport they choose.

Sea transport is a relatively slow and inexpensive form o f transport. Modern ships are capable
o f carrying hundreds o f thousands o f tonnes, so travelling another mile adds only a small amount
to the cost o f carrying a tonne o f a particular commodity. As wili be explained laten this ailows
buik materials to be moved halfway around the w orld and still arrive at an economic price.That
is why by far the greatest volume o f goods involved ÌR international trade is carried by sea -
more than 80%.

Since 1970, global seaborne trade has expanded on average by 3.1% a yean reaching an
estimated 8.8bn tonnes in 2 0 12. A t this pace, and assuming no major upheavai in the w orld
economy, giobal seaborne trade IS expected to increase by more than 30% by 2020 and to
doubie by 2033.

W hile the customer ío rth e goods carried is usually in another country from the selier o f those
goods, shipping is just as effective at transporting commodities from place to place within the
same country.This is especially im portant if the country concerned has a very tong coastline o r
is made up o f a series o f islands.This form o f shipping is vital to a num ber o f countries and is
often known as Coastal shipping on more technically, cabotage. Hov/ever, the latter term tends
to be used in reíerence to countries seeking to restrict such trade solely to ships owned by
companies based in that country,

Iniand shipping vvithin o r between countries across lakes and on rivers is com mon in many parts
o f the vvorld. Hovvever, unless the vessels involved ventLire out to sea the^e is littie common
ground between inland shipping and oceangoing trade.

2.3 T H E T H E O R Y OF T R A D E
The movement o f cargo by sea comes about as a result o f one party, the e xp o rte r seiling
a com m odity to another party, the im portenThis sale from one to another is reíerred to as
trade.You will often hear the exporter reíerred to as the consignor o r shipper and any subtle
diíĩerences between these terms will be explained laten Similarly, you may see the im porter
reíerred to as the consignee o r receiven

22 Institute of Chartered Shipbrokers

 T h e Shippíng Business

Pirst, we have to ask why A should want to buy goods from B.The obvious answer is that
A needs o r wants vvhat B produces.This comes about because o f the uneven distribution o f
resources throughout the world. N ote that the reíerence was to distribution o f resources, not
simply the distribution o f commodities. For example, Great Britain, once a major e xp o rte r o f
coal, still has substantial reserves but produces very little even fo r its own domestic consumption
because it is uneconomic to extract it. By contrast Australia can sell coal to Britain profitabiy
even though the countries are more than 10,000 nautical miles apart.

Beíore dealing with this apparent Paradox, let us concentrate on the implications o f resources.
W hen considering the theory o f trade, economists often speak o f absolute advantage. This
refers to a commodity that one country possesses in exportable quantities but another country
lacks. For example, neither bananas nor coffee can be produced in northern Europe, but they
are abundant in the Caribbean islands and west Aírica. In these cases, the absolute advantage
is the result o f climate. Absolute advantage may also come about through geology. C opper is
mined in several parts o f Southern Aírica, but it is not found in many o f the countries that need
it to produce goods.

Thereíore, in the case o f absolute advantage, the resource is simply the physical availability o f
the commodity. However, other íactors are involved that may lead to comparative advantage,
commonly through one country being able to produce a com m odity more cheaply o r in a
more desirable form than another

In addition to climate and geology, comparative advantage can derive írorm land, labour, Capital
and enterprise. N o tw o countries have exactly the same resources and few, if any, are tru ly self-
sufficient. For example, even with the vvide-ranging natural resources present in South Aírica,
the lack o f appreciable quantities o f oil prevents the country from being self-suffìcient.

Land incorporates climate and geology in terms o f absolute advantage, but it can also have a
proíound effect on comparative advantage.This explains why Australia can sell coal to Britain,
even though the latter still has large reserves o f coal o f its own. In Britain, the geology means
that coal has to be deep-mined, which is expensive, whereas in Australia, extraction is mainly
from open-cast pits, which is easier and cheaper, even ailowing for the cost o f transporting it
halfway around the world.

Labour refers to the fact that the cost o f living in some countries is far lovver than in others,
which enables them to produce certain items at a much lower cost. Shipbuilding was at one
tim e almost exclusively carried out in northern Europe and the USA. Today, it is a declining
industry in those areas but is thriving in Japan, South Korea and China.

Chinese shipỵard Yantai Raffles with a 20,000 tonne load (credit Haakm ơn)

Introduction to Shipping 23
C h a p te r 2

Capital does not simply mean money as it includes the things that money can buy: manuíacturing
equipment, roads, ports and everything else that comes vvithin the deíìnition o f inírastructure.
These perm it goods to be produced and brought to a place from whence they can be
conveniently exported.

Both labour and Capital may be involved in enterprise. Countries w ith high labour costs have used
their skills and knovvledge to develop a high degree o f automation in production. Automation
demands a huge amount o f Capital to be invested but it enables the same amount o f w ork to be
carried out by far fewer people.

Land, vvhich embraces geology and climate, may be considered static, as most mineral deposits
have been located, even if they are not yet being developed. Despite the effects o f global
vvarming, changes in weather patterns do not hugely aíĩect global production. Short-term
changes can be brought about by natural phenomena such as earthquakes, droughts or ílooding.

Labour and enterprise, by contrast, can change radically in a relatively short time. Mention was
made earlier o f how shipbuilding moved from Europe to South Korea. But before South Korea
attained its present dominance, Japan was the vvorld leader in constructing ships.When Japanese
vvorkers began to seek higher wages their countrys competitive edge was eroded, despite
substantial automation.Today, a similar situation has occurred in South Korea, with the result that
China, where workers are paid much less, is experiencing a boom in shipbuilding fo r export.The
vvorld leader position is a struggle between Japan, China and South Korea. Currently, China is
pulling into the lead, but the picture could change again beíore long.

Enterprise tends to change in an evolutionary way as populations become more technologically

advanced. More drastic changes may be brought about by politics. A narrow comparative
advantage íavouring im ports can easily be reversed by the imposition o f customs duties that
make im ported goods more expensive. Such ím port duties favour domestic production in
order to increase employment. Alternatively, a government may give money o r concessions to
manuíacturers in Its own country as a subsidy.The obịect here is to enable the countrys goods
to compete more effectively in the e xp o rt market. European countnes adopted this approach
for several years to try to retain their position as major shipbuilders, ultimately w ithout success.
The theory o f subsidies is that it is b e tte rto use taxpayers' rnoney to maintain competitiveness in
manuíacturing and so earn íoreign currency than to spend it on social beneíìts for unemployed
people.

A nother exampie o f politics bringing about rapid changes is in the form er Soviet Union.
Throughout the I980s and I990s vast amounts o f grain were im ported to supplement
the inefficient collective íarming sỵstem. But at the end o f 2002, aíter the collapse o f their
state-run economies, Russia and Ukraine altered farming practices and became net exporters
o f grain.

Patterns o f trade iníluence imports and exports vvhere politics as vvell as enterprise can
have their effect. Until the middle o f the 20th century, several European countries controlled
territories overseas that had once belonged to their empires.Trading patterns grew up between
the m other countries and these overseas possessions, many o f vvhich produced items that were
required in Europe. For example, Australia and N ew Zealand speciaỉised in agriculturaí and daiì-y
products such as meat and butten while the Caribbean and Indian Ocean islands concentrated
on sugar, bananas and spices.

As these economic and political links with Europe have vveakened, the íorm er colonies have
found new markets fo r their outputs. Australia, for example, has boosted exports o f coai, iron
ore and other minerals to Asian countries.

Politics can inAuence trading patterns in other vvays. W a r and unrest in the Middle East caused
the Suez Canal to be closed fo r long periods.This prom pted the design and construction o f
Capesize vessels to transport commodities around the Cape o f Good Hope, at the Southern

24 Institute of Chartered Shipbrokers

 T h e Shipping Business

tip o f Aírica, instead o f through the Suez Canal. Despite the longer journey, these larger vessels
w ere able to take goods to Europe at the same delivered price.

The dominance o f Middle Eastern counthes in oil production and the regions complicated
local politics have caused periodic increases in oil prices to such an extent that global trade
recessions have resulted. Recent, and continuing, political upheavals in north Aírica and other
parts o f the Arab vvorld have also caused volatility in oil prices.

An im portant iníluence on trade and trading patterns that has little o r nothing to do w ith the
actual íactors o f production has been the technology o f ship design and production.

Untii the I950s, 10,000 tonnes was large fo r a dry cargo ship and a so-called supertanker
carried 20,000 tonnes. Today, ships more than 20 times these sizes are commonplace. Such
increases in size brought about what economists call economies o f scale.Very simply, this means
that you do not need 10 times as tnany people to crew a ship 10 times the size. Indeed, other
technological advances have meant that crew numbers on a modern 200,000-tonner are often
less than one-third o f those o f a far smaller ship o f the 1950s. Just as importantly, the larger
ships engine does not need to burn 10 times the amount o f fuel.

The effect o f these economies o f scale has been to enabie raw materials to move halfway
around the vvorld and still arrive at a competitive price. W e have already read how Australian
coal can be marketed in Europe. N o t only can raw materials be moved over long distances very
cheaply, it’s also possible to ship goods in íreight containers over vast distances at a cost that
adds only a small percentage to their unit price - often a trivial amount in the overall shop price
of, fo r example, a reírigerator o r television.

All these practical and political iníluences on trade and trading patterns are not the end o f the
story. Simple preíerence, encouraged by clever advertising, can take advantage o f the cheapness
o f modern sea carriage.The USA has the biggest car-producing companies in the w orld and yet
on us streets you can encounter many vehicles manuíactured in Europe and Asia.The shelves
o f European supermarkets are íilled vvith food items from all overthe vvorld, even though these
developed countries are able to produce almost all the food that is essential for life. Here again,
though, personal preíerence is an im portant part o f comparative advantage.This has led to the
te rm 'globalisation' being applied to the vvorldvvide distribution o f mainly consumer goods.

2.4 S H IP P IN G M AR K ETS
As mentioned earlien shipping is divided into four distinct sectors; liner trades, dry bulk trades,
tanker trades and the passenger segment.

2.4. i Liners
Liners are so-called because they trade according to a schedule o f ports o f ioading and discharge.
They usually adhere to a published timetable on set conditions o f carriage.They oíten charge
fo r such carriage at a published rate o f íreight.Their cargoes are made up o f many consignments
írom numerous shippers. Each consignment has to be separately documented and could be
as small as one carton o r as large as several tonnes.

Liner cargo is almost always made up o f manuíactured o r partly manuíactured goods.The vast
majority, perhaps as much as 90%, o f liner cargo is now carried in containers.The Standard cargo
Container was introduced in the early I960s and since the I970s, each new generation o f liner
ships has been specially designed to accommodate them. Containers themselves are íamiliar
to all o f us, being seen on roads and railvvays throughout the vvorld. in ports, ships are rapidly
loaded with hundreds o r thousands o f these containers, which are emptied o f their cargo at
th e ir destination after the ship has discharged them and has sailed away.

Introduction to Shipping 25
C h a p te r 2

Container stacking area

Beíore the introduction o f containers, liner cargo, usually reĩerred to as general cargo, was loaded
piece by piece, which was a very slow, labour-intensive process. However, not every exporter
has enough cargo to fill a Container so that the expression general cargo o r generals is still used
for these small, less-than-containei' load (LCL) consignments that have to be Consolidated into
containers in order to be loaded.

On the few routes that are not containerised, cargo may be cailed conventional cargo, recailing
the days when Container transport was something new. More usualiy, non-containerised cargo
is reíerred to as break-bulk cargo and comprises those items that are genuinely impossible
to containerise.

2.4.2 D ry buik cargo

D ry bulk cargo is carried in ships that are sometimes reíerred to as tramps.The name derives
from the fact that these vessels go from place to place according to where they can fìnd cargoes.

26 Institute of Chartered Shipbrokers

 T h e Shipping Business

They do not follow a schedule, but sail to wherever the market dravvs them.They may load a
cargo at place A, discharge it at place B, and if there is no cargo to load at B.they will sail empty
o r in ballast to c and load for D and so on.

Some dry bulk cargo ships have become highly specialised so although they do not follow an
advertised schedule like liners, they do tend to stay in one trade, which often involves returning
írom the discharging p o rt back to the same loading p o rt o r area empty o f cargo. It is suffìcient
here to visualise a market in which many o f the ships are very large, built with certain bulk
cargoes in mind, plus a variety o f multi-purpose ships that continue to fulfìl the role o f typical
general cargo vessels.

Unlike liners, bulk carriers almost always carry raw materials o r semi-raw materials, usually taking
only one commodity at a time and invariably loading a cargo írom only one shipper on behalí
o f a charterer.Typical cargoes in the tram p market are coal, iron ore and other minerals, grains,
íertilisers, steels, scrap metal and tim ber Unlike liners, tramps carry cargoes at rates and on
conditions that are individually negotiated.

Bulk carrier being discharged in Rotterdam

2.4.3 Bulk iiquids

Bulk iiquids are carried in ships called tankers that may be iooked on as highly specialised tram p
ships.The main cargo carried in tankers is oil, and some o f the world's largest ships have been
built for this trade. Crude oil is transported in the State that it comes out o f the ground and
taken to oil refineries.These tend to be situated close to the main areas o f consumption o f
the íìnished product, although there is a growing tendency to site them in oil production areas.
Some o f these Products may be transported overland by pipeline, railway o r road vehicle, but
much o f it is carried by smaller ships.These ships are íairly specialised, designed to carry the
simpler reíìned Products such as petrol o r gasoline, kerosene, paraffin, jet fuel, diesel oil, fuel oil
and lubricants.

Introduction to Shipping 27
C h a p te r 2

Some by-products o f oil reíìning are chemicals that require smaller tankers. They have to be
carefully designed and constructed so that they are not harmed by the chemicals they carry, nor
contaminate those chemicals.

Included under the tanker heading are some o f the world's most sophisticated ships, the gas
carriers.They are designed to carry either liqueíìed petroìeum gas (LPG) such as butane and
propane, o r liqueíìed natural gas (LNG). VVhile most o f the world's tankers transport oil o r gas,
there are other liquid trades including chemicals, acids, vegetable oils, wine, molasses and even
orange juice.

Preight rates ío rth e carriage o f liquid cargoes are also íreely negotiated and íluctuate according
to the markets demands b u tth e tanker chartering market is separate from and rather diíĩerent
to the dry cargo market.

2.5 W H O TRADES?
W e have already mentioned the main characters in the trading world, proíessionals such as
exporters and importers, shippers and receivers, consignors and consignees.

This being seaborne trade, the shipowner is clearly a significant íìgure. Most, but by no means
all, ships are ovvned by companies. Some may own just a few ships while others may have very
large fleets. Some shipowners, especially those with small íleets o r institutions that have bought
ships as a speculative investment, empioy ship managers to manage their ships ío rth e m ,

W here bulk cargoes are concerned, the entity employing the ship, if not the ovvner carrying
its own cargoes, is reíerred to as the charterer A charterer may be the actual e xp o rte r or
im porter but might also be a trader that acts betvveen them .W ith bulk cargoes it is usual fo r the
entire ship to be chartered, although part-charters occasionally occunThe charterer may take
the ship fo r a single voyage, when it is customary fo r the ow ner to charge a rate per tonne o r
a lump sum to carry the goods from A to B.The charterer may, howeven need to have more
ílexibility than a voyage charter permits and will then take the ship on a tim e charten In this
case, it is customary to pay a rate per day fo r the tim e agreed. Sometimes a charterer may have
large volurnes o f cargo to move and, rather than negotiating many individual voyage charters,
he will enter into vvhat is cailed a contract o f aiĩreightment (C O A ) w ith a single shipowner.The
ow ner must then provide ships as they are required according to the prearranged agreement
and schedule.

The shipowners and charterers involved in arranging the íìxture are reíerred to as the principals.
But it is usual fo r the actuai chartering deal, called a íixture, to be negotiated on behalí o f the
charterer and the shipovvner by shipbrokers.

For greater clarity it is common fo r the shipbroker representing the ow ner to be reíerred to
as the owner's broker and the one acting for the charterer to be called the charterers broker.
The term ‘charterers agent’ is used when reíerring to p o rt representation. Such shipbrokers
may be, and often are, independent firms o r companies. But among the larger shipowners
and charterers it is quite common fo r shipbrokers involved in negotiations to be members o f
departnents within the principals cw n company.

Mention has already been made o f the way in which liners carry goods fo r a num ber o f
exporters, In this case, the person, firm o r company contracting w ith the ow ner will be the
shippen who may be the actual manuíacturer o r may be a trader

Again, the contract fo r the carriage o f those goods may be arranged by the shipping departm ent
o f the actuat exporter; o r alternatively by an independent firm o r company known as a íreight
forw arderThis is reíerred to as a íorAA/arding agent, o r a shipping and íor^arding agent, and
may make the arrangements on behalf o f the shipper Such a forw arder o r agent will perTorm
whatever duties the e x p orter requires to arrange fo r the goods to move from the premises to
the point where the shipovvnertakes over responsibility.

28 Institute of Chartered Shipbrokers

 T h e Shipping Business

W ith the majority o f general cargo now moving in containers.there has been a development o f
the íreight fonA^arder's function in which a firm o r company takes on the role o f carrier instead
o f acting as an intermediary. In this case, it is known as a non-vessel-operating carrier (N VO C ).
As the name implies, it does not own any ships, and may not even own road transport. It does,
hovveven take on full responsibility fo r the moving o f goods from the exporters íactory right
the way through to the im porters premises.This it achieves by contracting with hauliers and
shipovvners in its own name. For once.the lawyer's deíinition is simple, describing an N V O C as
'deemed to be the carrier but not actually the carrier.You will oíten see the initials as NVO C C ,
w ith an additional C.This stands íor the word 'common', which is legally required in the USA
and some other countries. A common carrier is one that offers its services to the public at large.
The alternative, a private carrier, would be a ship under contract to a charterer.

Londons Baltic Exchange

O ne íurther definition is ship operator It is quite common fo r companies, even large ones, to
operate ships as if they own them, but w ithout actually owning them .This is done by taking
the ships they require on tim e charter o r another form o f long-term employment known as a
bareboat charter In this case.the operator may be reíerred to as the disponent ownen deíìned
as someone 'deemed to be the ow ner but not actually the owner'.This status gives the operator
much greater ílexibility to react to market changes. A nother advantage is that a disponent
ovvner does not have to find large sums o f money to buy all the ships it requires.The term ship
operator is also used in a more general sense to cover shipowners, ship managers and ship
operators collectively.

Introduction to Shipping 29
C h a p te r 2

2.6 C O N C L U S IO N
The point was made earlier that the demand fo r shipping is denved from the demand fo r the
com m odities tha t ships carry. It was also stressed that the cost o f carrying those commodities, the
rates o f íreight, are freely negotiated and you may hear economists stating that the international
chartering m arket is the nearest one can get to perTect competition.

Some o f the com petition and the rate Auctuations that flo w from it spring directly from the
supply o f ships. In its simplest terms, tw o ships and only one cargo make a weak market, tw o
cargoes and only one available ship make a fìrm m a rke tT h e major íluctuations in demand fo r
ships follow íluctuations in the demand fo r commodities.

Such íluctuations can be long o r short term and arise from a wide variety o f causes. For example,
a p o o r grain Harvest in one part o f the w orld may increase the demand fo r imports in another
Conversely, a bum per crop could have the opposite etĩect. Even something as short term as
a serious strike could create a sudden demand fo r a particular type o f ship that might have
repercussions and knock-on effects in o ther markets.

Trade recessions can have a proíound effect on the demand fo r ships. Political decisions such as
OPEC countries adjusting oil production in o rd e r to inAuence the price o f crude oil can cause
w orldw id e changes in the demand fo r all types o f ships. A n outbreak o f war can create a sudden
and enorm ous increase in demand fo r shipping space th a t could cause freight rates to soar.

Quarterly VVs rate AG/West

300

Graph showing quarterly average VLCC VVorldscale rates foí' a voyage from the Middle East to the
iJS G'jlf

30 Institute of Chartered Shipbrokers

V
ịi)ổ-
C h a p te r 3

3.1 T H E S IX D ISC IPLIN ES

The basic disciplines o r areas o f activity in the commercial shipping w orld that fall under the
term shipbroking can be conveniently divided into six categories o f proíessional expertise, listed
below.

1. The purchase and sale o f a ship, sale and purchase broking.

2. Once purchased, the ship has to be crewed, maintained andmanaged, and stores
purchased; after that, it will require cargoes.

3. If the ship is a linen the Service must be marketed, the cargoes documented and
arrangements made fo r loading and discharging these cargoes.AII o f these fall underthe
heading o f liner trades, which are carried out either within the liner operating company
o r by independent liner agents.

4. If the ship is a dry cargo tramp, íìnding a cargo fo r the ship o r finding a ship fo r the cargo
will be the task o f brokers in dry cargo chartering.

5. A tanker will require a broker skilled in tanker chartering.

6. VVhenever a dry cargo tram p o r a tanker calls at a p o rt its interests will beentrusted to
those w ho specialise in p o rt agency.

O f the many other businesses involved in commercial shipping, tw o o f the most signiíìcant are
the exporters and those that represent them, íreight foPiA/arders.

3.2 T H E IN S T IT U T E OF C H A R T E R E D SHiPBRO KERS

A proíession is a type o f employment where the employee is obliged to pass qualiíying

examinations. These are set, invigilated and marked by a proíessional body. For example, to
become a chartered accountant a candidate has to pass the examinations set by the Association
o f Chartered Certiíìed Accountants. By contrast, banking is a trade, so bankers do not have a
proíessional body to join o r from which they can be struck o fí fo r misconduct.

32 Institute of Chartered Shipbrokers

 P ractitioners

In 1911, vvhen the Institute o f Chartered Shipbrokers was íormed, the w orld o f shipping was
a simpler place and the proíession o f shipbroker in the UK reíerred to a person w ho arranged
the chartering o f ships. Shipbrokers looked after them when they called at a p o rt and very
occasionally became involved in sale and purchase negotiations. Liner services were in the
hands o f a relatively few major operators that used e ith e rth e ir own offices o r exclusive loading
brokers to look afte rth e ir business.

Since that time, a royal charter has been awarded and members and fellows have the right to
call themselves chartered shipbrokers.The Institute became a truly international organisation in
1984 when the charter was amended. It retains its title w ith all the tradition o f proíessionalism
it involves while fully recognising the way in vvhich speciaiisation has created these six disciplines
w ithin the shipping business.

It is recognised that the w ord ‘shipbroker’ means diííerent things in different countries and in
many there is a clear distinction made betvveen brokers and agents. Several years ago,

the United Nations Coníerence onTrade and Development (U N C TA D ) carried out a survey
into the duties o f intermediaries in the shipping business and adopted the term ‘shipping agent’
to coverthem all, including íreight forwarders and íorM/arding agents.The survey was conducted
as part o f an initiative to introduce a non-mandatory code o f practice fo r shipping agents.

Although the shipping business has become more specialised, overlaps do occun as some people
undertake tasks that íall under more than one o f the Institutes examination headings. In the
interests o f simplicity, hovveventhe six disciplines will be treated separately.

3.3 S H IP SALE A N D PURCHASE

Alm ost all marine-related property can be bought and sold, from new vessels ordered from
shipyards and old ships sold for demolition to cash buyers and scrapyards (now known as
'recycling íacilities’) to secondhand ships fo r íurther trading. It is the latter category that íorms
the major part o f the w ork o f a ship sale and purchase (S&P) broker.

Sale and purchase is probably the most highly specialised sector o f shipbroking, demanding all
the usual attributes o f a skilled negotiator with vvide-ranging knovvledge o f the technical aspects
o f ships.

It is customary for an s&p broker to w o rk fo r only one party in a deal. W hen working fo r a
potential buyen the broker needs to be well versed in ship types and be well avvare o f the
vices and virtues o f particular ship designs, builders and machinery so they can advise clients
appropriately.The broker may also be called up to provide advíce on matters such as registration,
classification and sources o f Tinance.

If vvorking for a sellen the broker has to be able to place the ship beíore the greatest number o f
buyers via their brokers in the shortest possible time.

In both situations, a thorough knovvledge o f the strength o f the market is essential.The aim is to
ensure that the buyer pays no more than necessary to secure the right ship or, conversely, for
the sellerto obtain the best price possible.

It is the accumulation o f knovvledge o f the market that enables leaders in the s&p field to act
as ship-valuers when called up fo r an expert opinion.This may be required by governments,
íinancial institutions, Insurance undervv/riters, probate lawyers, arbitrators and lavvyers needing an
e xp e rt witness.

This is a branch o f shipbroking that demands many skills simultaneously. Entrepreneurial flair
is essential, as are technical knovvledge and proíiciency in gathering market iníormation from
every source. The latter includes details o f vessels in the market fo r sale and sales recently
concluded, but also íreight market movements that might iníluence prices o f ships. As all this
iníormation has to be stored and be easily retrievable, an avvareness o f databases and analysis
tools is very helpful.

Introduction to Shipping 33
C h a p te r 3

s&p brokers oíten specialise. Some deal e x c lu s iv e ly in new ships, fo r which it is essential to have
a close knowledge o f the prices that yards are quoting, the availability o f building berths and
the payment terms being offered to buyers. O ther brokers may operate at the opposite end
o fth e ships liíespan and specialise in demolition.They will need to know which recycling yards
are hungry íortonnage and vvhich are overstocked, as this will dictate the prices available.Those
vvorking in the secondhand market may vvell specialise in tankers o r bulk carriers, o r m ore niche
areas such as oil exploration vessels, ferries, dredgers and fishing vessels.

$ miliions Ten-year-old bulkcarriervalues

$160
— Capetóe — Panamax — Handymax — Handytóe

Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

Ships' values since the beginning of the 2 1st century

The sums o f money involved in s&p are large. The number o f deals that fall through is
considerably higher than those that succeed. A broker needs to be able to cope vvith a high
level o f írustration. W hen a deal does succeed the rewards can be very attractive.The brokers
income arises from a commission on the price paid when the sale is concluded, All the brokers
involved receive this commission from the seller Rates o f commission vary from 2.5% fo r ver'y
small ships dovvn to I % fo r larger sizes.

s&p brokers are only as strong as their record-keeping, so impeccable data, constantly updated,
is essential. Support staff are vital, and many s&p brokers start their careers pounding the keys
o f a Computer keyboard.

3.4 SH IP M A N A G E M E N T
Maintaining a ship as an operational unit requires a variety o f specialist services. In a large
shipowning enterprise these are usually carried out by the company itselí.

Small-scale ovvners o r organisations that do not see ship operating as a core business employ
the services o f an independent ship management company. There are many such companies
based in diííerent parts o f the world.These contain all the diííerent departments needed to
provide an effìcient Service fo r which they charge a fee o r they can subcontract the services
o f specialists fo r certain aspects o f the operation. Because o f their size, they are usually able to

34 Institute of Chartered Shipbrokers

 P ractitio n ers

attract top-class executives and the large numbers o f ships under their management enable
them to enjoy economies o f scale.

There is, o f course a dilemma for the medium-sized shipowner which will have to consider
the benefìts o f using its own staíí over vvhich it has direct control and balance this against the
economies in using a third party to manage its ships. Sometimes that problem is solved by
subcontracting only a part o f the management íunction, which is possible in view o f the clear
demarcation betvveen the different activities in ship management. Crewing is a prime example
o f this partial subcontracting.

A nother device that has successíully overcome the lack o f economies o f scale for the medium-
sized shipowner has been contracting to manage other owners' ships by the same personnel
as are empioyed in caring fo r the ow ner’s own vessels. This is different from the pooling
arrangement that many owners adopt fo r commercial employment o f their vessels since, under
that type o f arrangement, the real management o f the ship remains with the owner,

Ship management companies fall into tw o main categories. One type is the shipowning
company that manages its own ships and offers the same Service to other shipowners. The
other is a company that has no ships o f its own and solely provides ship management services
to shipovvners.

Either way, the ship management íunction is the same and has the following six components:

1. crewing;

2. storing;

3. technical;

4. Insurance;

5. operations;

6. commercial.

O ther services such as training and consultancy may also be offered.

Ship management appointments are individually negotiated according to the requirements o f

the principals. A Standard ship management agreement, SHIPMAN 2009, sets out in detaii all the
tasks a ship manager may be cailed on to períbrm.

3.4.1 Crewíng
It is not unusual fo r some shipowners to contract with a ship management company fo r crewing
alone.This is particularly popular among those traditional maritime countries that allow ships to
be íiagged out to acceptable open registers.The shipowner is able to combine the advantages
o f the national flag with more relaxed regulations on the nationality o f the ship's personnel. For
UK-based shipowners, the Isle o f Man, Gibraltar and Bermuda have become popular flags.

Introduction to Shipping 35
C h a p te r 3

Crew climbíng the gangvvay

Such shipovvners carry out the main aspects o f ship management but entrust crevving to an
offshore company. Counthes such as the Philìppines provide the crew supply Service, which IS in
efíect an invisible export.

The crevving departm ent is responsible fo r checking the certiíìcates o f competency o f the
offìcers and takes up reíerences from previous employers. It also checks vvhether the seaíarers
are properly qualiíied for their positions on the ship.

Leave is an im portant part o f a seafarer's contract and the crewing departm ent has to ensure
that crew changes are carried out in such a way that ships are never delayed.Travel arrangements
for crew joining o r leaving their ship will also be the responsibiiity o f the crewing department.

Managers must ensure that ali crew members receive their correct vvages at the right time.
It is a vital task fo r those in charge o f crewing. Just as im portant is ensuring prom pt payment
o f those portions o f their wages that are to be sent to the seafarer’s íamily back home.These
are called allotments and in some jurisdictions it is common to send home a percentage o f
crevv vvages.

3.4.2 storing
Stores fall into tw o classes: those Items concerned with the crew and those concerned w ith the
operation o f the ship. Some o f the latter will be the responsibility o f the technical department.

For the crew, the obvious items are food and drink, which some still call Victualling’ but now
are more usually term ed ‘provisioning’.This can be a demanding task, as each nationality has its
own food preíerences, often determined by religious o r cultural needs. In many cases, the ships
command is given a budget vvithin vvhich it has a high degree o f control over buying supplies.
Nevertheless, close supervision is essential.

36 Institute of Chartered Shipbrokers

 P rac titio n e rs

O th e r stores for the crew include such things as bed linen, cleaning materials and cooking
utensils.

For the ship itselí, stores íurther divide into tw o categories: deck and engine room. Deck
stores include materials needed for cargo operations such as ropes fo r lashing, and tim ber for
dunnage. Specialist items such as tank cleaning and reírigeration materials, and also paints and
o the r materials for routine maintenance, fall underthe deck stores heading. Engine-room stores
include lubricants, but spare parts are usually the responsibility o f the technical department.

3.4.3 Technical
It is in this departm ent that one is most likely to fìnd íorm er ships officers with considerable
seagoing experience.The departm ent is oiten subdivided into tw o sections. O ne will be under
the management o f the marine superintendent, usually a íorm er master marinenThe other will
be managed by the engineering superintendent, generally a íorm er chieí engineen

A n engineer w orking on a ships auxiliarỵ engine

The respective responsibilities o f these tw o sections are probably self-evident.The engineers

are concerned w ith all the ships machinery, often including the cargo-handling equipment and
sometimes also electronic navigational devices. Marine superintendents are not only responsible
fo r the fabric o f the ship but also fo r keeping the classification surveys up to date.

A íurth er vital role is to respond immediately should any ship under its control become involved
in an accidentTechnical departm ent members are accustomed to ílying to the other side o f the
vvorld at short notice to attend to a vessel in trouble.

3.4.4 Insurance
Insurance is a shipowner’s second biggest item o f cost.The personnel dealing with this aspect
need to be highly skilled. Marine Insurance íalls under tw o distinct headings. The íirst is the
insuring o f the ship itselí.This is reíerred to as hull and machinery (H&M) Insurance. In view o f
the high value o f ships, even a small reduction in the rate o f premium can save substantial sums
o f money, but finding the best cover needs considerable expertise.The best known provider
o f H&M Insurance is Lloyds o f London. Insurance w ith Lloyds is undertaken by individual
undenAíriters w ho group together in syndicates and can only be accessed through a Lloyds
broken Marine Insurance can also be arranged with Insurance companies and it is for the ship
managers Insurance departm ent to ensure the best deal.

Introduction to Shipping 37
C h a p te r 3

The other type o f Insurance is a form o f third-party Insurance, as it covers any claim made
againstthe ship by another person o r company. Examples include a p o rt authoritys claim against
the ship fo r damage to a jetty and a personal inịury claim by a mennber o f ships personnel
alleging negligence on the part o f the shipovvnen In addition, claims made by cargo owners
when their goods do not arrive in the same 'apparent good order and condition’ are covered.

For historical reasons, Lloyd’s o f London was reluctant to offer this type o f Insurance, so
shipowners themselves íormed protection and indemnity associations, universally reíerred to as
p&l clubs. Protection is the legal help given to fìght o ff unfair claims. Indemnity covers repayment
to the owners fo r any third-party claims vvhich have been legitimately made and settled. As
several third-party claims are invariably in the pipeline.the Insurance departm ent is always busy.

3.4.5 O perations
The ship is run by this department. It communicates with the commercial people and plans the
voyages; it decides on bunkering; it appoints p o rt agents. Generally, it does all that is necessary to
convert the w o rk o f the other departments into a trading entity on the high seas.

The operations departm ent must alvvays remain in close contact with the other departments.
It vvould be unprofessional fo r the operations departm ent to plan a long voyage just when the
technicai departm ent had committed the ship to a spell in drydock.

In some companies, the commercial people are an integral part o f the operations department,
vvhich ultimately decides which trade to undertake. Brokers seeking cargoes vvould obtain their
authority to negotiate business from the commercial people in the operations department.

Jobs in ship management vary from undemanding tasks to highly specialised work. Many o f the
technicai positions are the natural choice fo r ships oíĩìcers when they come ashore.

There is no set fee o r percentage commission fo r ship managementThe managers remuneration

is a m atter for negotiation at the time o f the appointment.

3.4.6 ISM Code

It IS unim portant w hether a ship IS managed by its true ovvner o r a third party.The Standard o f
management has a profound effect on the condition o f the ship and how safely and effectively
it is operated.

Bad shipovvners and managers run bad ships and it is those ships that are most often involved in
incidents that lead to serious concerns. Even companies that wouid be expected to operate to
the highest standards can allow bad practices to creep into their procedures.

In recognition o f this, and to try to reduce the number o f dangerous incidents, the IMO
incorporated a section into the SOƯ\S Convention that requires ship operators to comply with
a code o f practice.

38 Institute of Chartered Shipbrokers

 P ractitioners

The International Maritime Organization building in London

Knovvn as the International Safety Management Code (ISM), it requires operators to have their
management procedures on shore and at sea audited and approved by inspectors acting on
behalí o f the flag State. If they satisíy the inspectors.the company will be issued with a document
o f compliance (D O C ) fo r the shore office and each ship will also be audited and inspected
beíore being issued w ith a saíety management certiíìcate (SMC).

Passing the inspections is not a mere íormality. The company and its ships must be able to
demonstrate full compliance w ith SOU\S, Marpol and local regulations governing conditions
and training on board ships.AII crew have to be properly trained ío rth e ir jobs and in possession
o f appropriate certificates.

The ISM Code was first introduced fo r companies operating passenger ships and tankers. Bulkers
followed soon after and in July 2002 the code was extended to cover all ship types. Under the
terms o f the ISM Code, every ship operator must appoint a designated person ashore (DPA).
Their role is to be a link betVv/een the ship and senior management. Usually the DPA is the senior
superintendent, but companies may make their own arrangements. In very large management
companies there may be several DPAs, each dealing with a section o f the fleet.

3.4.7 T h e lS P S C o d e
The International Ship and Port Pacility Security (ISPS) Code is part o f the SOLAS Convention
and was devised by the IMO in response to concerns over security and terrorism, particularly
in the wake o f the September 2001 attacks in N ew York. It also addresses tw o other
probiems that have been o f concern fo r many years: piracy and stowaways. It came into íorce
on I July 2004.

The ISPS Code has tw o prongs; ships o f more than 500gt and ports. Governments and maritime
administrations must appoint recognised security organisations (RSOs) to certiíy the security
arrangements that have been made in ports. The code also covers shore offìces o f shipping

Introduction to Shipping 39
C h a p te r 3

companies. It is up to each national government to decide what type o f organisation can

become an RSO. In the UK, fo r example, only the Maritime and Coastguard Agency (M C A ) has
the povver to vet ships, but many flag states have delegated the w o rk to classification societies.
Panama, on the other hand, has avvarded a monopoly to a specialist security company,

Both ships and ports must undergo a risk assessment, aíter which a security plan is drawn up.The
RSO revievvs the plan and once the p o rt o r ship has been successíully inspected and audited, a
certificate is issued. Pont states can deny entry to any ship that lacks a certiíìcate, including ships
Corning from ports that have not been certiíìed as complying with the code.

On a practical level, both ports and ships operate on a three-stage security alert, with precautions
being matched to the security threat. For the most part, ports and ships operate at the lovvest
alert level until intelligence indicates that a higher level is desirable.

3.4.8 Liner trades

The Institute reíers to this sector o f shipping business as liner trades rather than liner agency.
VVhether carried out in-house o r by agents, the w o rk is the same.There is a Standard liner
agency agreement devised by the international agents' association knovvn as the Pederation o f
National Associations o f Ship Brokers and Agents (PONASBA). It is recommended by the Baltic
and International Maritime Council (BIMCO).

Ship loading w o o d pulp

40 Institute of Chartered Shipbrokers

 P ractitioners

The agreement sets out in detail the duties o f a liner agent.The im portant ones are listed below,
along with the relevant sections o f the agreement.

1. Marketing and sales 3.10 to 3.14

2. Documentation 3 .15

3. Attending the ship 3.20 to 3.29

4. Control o f equipment 3.30 to 3.38

5. Accounting and ílnance 3.40 to 3.47

The PONASBA agreement is comprehensive in its summary o f an agents duties, but there can
be variations. For example, the agent may be called on to deal only with inward cargo arriving in
the agents territory. Conversely, they might deal only with outvvard cargo.The agent may even
be invoived just in sales and marketing, as would be the case if they were based in Switzerland,
Austria, Zimbabwe o r any other landlocked area. Such agents are oílen reíerred to as
hinterland agents.

Liner w o rk is the most labour-intensive sector o f the shipping business and can involve the
Processing o f hundreds o f separate consignments in a s h o rt period o f time. Each o f these will
involve several duties including, in the case o f outvvard cargo, taking cargo bookings. Among
the tasks are calculating the íreight, checking the bills o f lading and recording the Container
movement. W ith invvard cargo there is the all-im portant job o f ensuring the cargo is handed
over to the legitimate holder o f the bíll o f lading.

Containerisation may have dramatically reduced the physical handling to be done on the
dockside, but it has greatly increased the amount o f w o rk coming through the liner agency
office. Consequently, liner trades provide many types o f w o rk ranging from maintaining close
links with the ship itselí to jobs remote from the dockside.

The independent liner agents remuneration is a commission on the gross freight earned.There
can be negotiation around severai aspects o f the overall task o f liner agency.

3.4.9 D ry cargo chartering

First assume that there is one broker representing the charterer looking fo r ships to carry
its principars cargoes. A nother broker represents the shipowner looking for cargoes to fill its
principars ships.This is not alvvays so but is often the case.

T h e / may be exclusive brokers; in other words,the respective principals channel ali their business
through them .The appointment requires the broker to advise the principal and to ensure the
best possible deal in every case. Exclusivity may be total o r may be exclusive to one part o f
the vvorld, so the principal may use one broker in London, another in N ew Y ork and another in
Hong Kong.

Alternatively, principals may place their business through several brokers, w ho are then reíerred
to as competitive brokers because they compete with each other to bring suitable business to
the principal.

A nother category is the intermediate broker, who may be part o f a Chain linking brokers on either
side o f them.They are less common than íorm erly because modern methods o f communication
make contact from one side o f the vvorld to the other as easy as a local telephone call.
An intermediate broker may also be used when that broker is the only one betvveen the
tw o principals.

The most exclusive broker is a member o f the principars company.This is quite common. For
example, many o f the major grain companies run their own chartering departments.

Introduction to Shipping 41
C h a p te r 3

Handysize bulk carrier

W hen using an external broker the principal has something o f a dilemma. If using an exclusive
broken the principal has a source o f advice and Service, a specific loyalty. That loyalty is
motivated by the knovvledge that the entire connection is at risk if the broker gives a p o o r
Service. Hovvever, there may be a practical limit to how much o f the market a single broker can
cover in a iimited time.

On the other hand, by placing its business in the hands o f many brokers, the principal may feel
that the market has been fully saturated.The incentive is ío rth e brokers to w o rk as hard and
as fast as they can to be the first to the principal w ith suitable business.This does mean that the
principal may receive less in the way o f objective advice.

VVhether exclusive, competitive o r intermediate, and w hether working on their own o r fo r the
charterer, all have one duty in common: they have to know their market.That does not simply
mean knowing the trade they are in, but aiso recognising how a sudden demand in a diíĩerent
part o f the w orld for a totally different com modity can trigger a nse in rates in their own trade.

Although face-to-face negotiations on the flo o r o f the Baltic Exchange have been overtaken by
electronic communication, chartering is still essentially a person-to-person activity and demands
a strong ability to inspire confidence. Fellow brokers will look fo r someone whose w ord they
can trust. Principals’ additionally, seek speed, eííìciency and sound advice. Stamina is also a
necessity as chartering is an activity that takes place globally across many tim e zones. N ew York
is fìve hours behind London.Tokyo is íìnishing w o rk just as Europes vvorking day is starting - a
chartering broker cannot expect a nine-to-fìve job.

A brokerage - the commission o f 1.25% to each o f the brokers involved in the tìxture - is usual
in dry cargo chartering.

A chartering departm ent does not consist entirely o f brokers.Their back-up, generally reíerred
to as the post-fixture department o r the back-office, requires people w ho can translate the
Communications into a w ritten contract, the charter party, ready fo r principals to sign. Many
front-line brokers started their careers this way.

42 Institute of Chartered Shipbrokers

 P ractitioners

3.4.IO T anker chartering

Most o f what has been said about dry cargo chartering applies to tankers except that tanker
chartering is highly specialised. Many o f the ships are limited to a single commodity, while the
charterers are often major oil companies.The broker generally sits betvveen the tw o principals,
both o f vvhom have a proíound knowledge o f the trade.

Urgency seems endemic in the crude oil w orld.The tim e lapse between business Corning into
the market and being fìxed is usually very short. Charterers tend to be more concerned vvith
the sheer speed o f finding the right ship. Exclusive brokers are rare in the tanker sector.

As with dry cargo chartering, 1.25% per broker is the usual brokerage in tanker fixtures.

3 .4 .1 i P ort agency
This sector o f the industry demands 24-hour toil. Alm ost two-thirds o f ships arrive and depart
outside normal offìce hours. Nevertheless, a special sort o f job satisíaction derives from dealing
physically vvith ships and their personnel.

W hen a vessel calls at a p o rt to load o r discharge, considerable w o rk has to be done beíore,

during and aíler that cali. The ow ner o f the ship probably resides far away from the p o rt
concerned, so they entrust the ship husbandry to an agent, who effectively becomes the
extended arm o f the ovvner.

An agent going ashore

Introduction to Shipping 43
C h a p te r 3

The agents íirst task is to coníer w ith the p o rt authority, vvhich has to be paid large sums o f
money in dues fo rth e use o f the port. Duties may include arranging a berth and involve liaising
with the people w ho will actually load o r discharge the cargoes.

The agent usually meets the ship on arrival regardless o f the tim e o f day o r night. In the past,
except fo r a laconic exchange o f radio telegrams.this would have been the íirst contact between
the agent and the ships mastenToday, radio teiephony and mobile telephones make it likely that
there will have been several exchanges beíore the ship arrives. During these conversations,
arrangements made by the agent and the principal requirements o f the ship will have been
discussed.This íìrst meeting is, however, an im portant one, because customs and immigration
íormalities need to be dealt with. Im portant to o will be the handing to the master o f cash for
the ship and also the ships mail, which will be eagerly avvaited by the crew.

A ships agent w orking vvith the purser

Delivery o f stores and spares has to be arranged and cleared through customs. Service engineers
for the ship's equipment may be required, and mundane tasks such as organising laundry fo rm
part o f the agents duties too. Crew members may need medical o r dental attention.The ag^^ent
may also need to use their dipiomatic skills to extricate from offìcial custody any crew m em bers
w ho spent th e irtim e ashore unvvisely.There really is no end to the activities in vvhich the ag:'ent
may become involved and fo r which the agent’s local knowledge is invaluable.

Throughout this tim e the agent will keep the ow ner advised o f the ships progress and nnake
any recommendations that might assist in the all-im portant task o f turning the ship round in the
shortest possible tirne.

The job is not finished when the ship has sailed.The parties wiil probably require a statememt o f
íacts, which is a record o f how every minute o f the ships tim e in p o rt was spent. From this,, the
amount o f demurrage o r despatch, if any, will be calculated.

All the accounts that have been paid on the ships behalf will have to be gathered togethenTílien
there is the task o f compiling the disbursement account fo r submission to the ovvner A vwise
agent will have obtained substantial funds in advance and the disbursement account will set out
how much more the agent requires o r how much he must refund to the ownen

44 Institute of Chartered Shipbrokers

 P rac títío n e rs

The agents remuneration is usually a fee, often based on a tariff.These tariffs were at one
time mandatory and some had government support, although today any form o f price-fixing is
prohibited.The tariff is thereíore no more than a guide.The scale tends to be based on the size
o f the ship plus any more complex duties the agent may have to petform .The size o f the ship
may not determine the actual amount o f w o rk involved. Howeven it has always been accepted
that such scales reílect the concept that the larger the ship, the greater the agents responsibility.

A p o rt agent often has to resolve a conílict o f interest.The charterer o f a tram p o r tanker oíten
stipulates that the ow ner must appoint an agent nominated by the charterer. For convenience
in negotiations this is often reíerred to as the charterers agent, which gives an erroneous
impression. In the eyes o f the law, the agent represents the ovvner o r disponent owner o f the
ship. It is pertìaps easier to think in terms o f the agent representing the ship.

Charterers demand this right o f nomination fo r several reasons. For example, a tanker charterer
needs to maximise eííicient use o f the oil jetty and wants only one source o f iníormation about
ships' positions írotn a known expert in whom they have confidence. Also, oii installations are
vulnerable and security-sensitive places, and limiting the number o f people seeking access makes
security easier. In other trades, the charterer may be anxious not to share knovvledge o f their
business vvith the owner's appointed agent.

N o t surprisingly, the charterer expects something in exchange from the agent they have
nominated.The obvious one is that the charterer wíll receive as steady a stream o f iníormation
about the ships loading o r discharging progress as the ow nerThe charterer can be coníìdent
that the handling o f their cargo is in expert hands. Hovveven very occasionally the agent will
be presented vvith a dilemma. A situation may arise vvhen the law o f agency demands that the
agent has to take the ow ner’s side against the very people w ho insisted on that agent being
appointed. In such cases the agents professionalism is tested.

As was mentioned earlier, the only occasion when the agent does not represent the ow ner o f
the ship is when the ship is on tim e charten In this case.the agent represents the tim e charterer
o r the disponent ow ner and is expected to carry out all the normal duties fo r the ship.There
are occasions when the owner wants something extra done. It is then quite usual fo r the ow ner
to make an arrangement with the agent working for the tim e charterer to do this vvorkThis is
quite in order unless a conílict o f interest is likely to arise.

There are rare occasions when the shipovvner is simply not happy w ith the agent appointed
by the charterer. In such circumstances the ow ner will appoint a supervisory agent, sometimes
reíerred to as protecting agent.These will oversee the w o rk done by the charterer’s appointed
agent and will carry out any duties that the ow ner is not prepared to entrust to the charterers
agentYou will see that the appointment o f a supervisory agent is catered fo r in the scale o f
agency charges.

All the duties o f a p o rt agent are also carried out by a port-based liner agent. These are
incorporated in a liner agency contract.

The essentially practical aspects o f p o rt agency w o rk make it the best possible basis for a career
in any other branch o f shipping business.

3.5 C O N C LU S IO N
Except where any o f the foregoing six disciplines are carried out by a department in the
principars own offìce there is a principal and agent relationship.

In essence, an agent is only o f value to a principal so long as they can do the job more eíĩiciently
than the principal could do it themselves and do the job as well o r better than any other agent
in the same locality.

Introduction to Shipping 45
C h a p te r 3

46 Institute of Chartered Shipbrokers

The supply of ships

Golden Gate Bridge - Sơn Francisco

C h a p te r 4

This chapter highiights some im portant aspects of, and constraints within, the shipping business
that have created and continue to shape the shipping vvorld.

4.1 A BRIEF H IS TO R Y
Ships have been used ío rtra d e forthousands o f years, but todays shipping business is the result
o f technology and practices established over the past 150 years.

Modern ship designs had their íoundations laid by inventors o f the I9th century. Two
developments caused the slow demise o f vvooden sailing ships.

■ ^: - S I ; ', -

Old passenger ship

The first was the use o f iron fo r ship construction. It to o k many years fo r the shipping industry
to have confidence in iron instead of wood. Many claimed that it vvould be impossibie for
a material as heavy as iron to íloat. Com m on sense prevailed, and it was discovered that
larger ships could be built than had been possible w ith wood.This was the era in vvhich the
magnificent tea clippers plied the seas, but even the stoutest sailing ships were still at the
mercy o f the vveathen As a result, it was impossible to predict with accuracy when a ship would
complete its voyage.

The second development was the steam engine, íìrst as a supplement to sail and tìnally it
replaced wind pow er altogethen Although steam engines had been available fo r many years
and were used fo r pumping and similar tasks on land from the late 17th century, it was not until
1830 that they were considered reliable enough to propel ships. Eaiiy dttempts were hardly a
roanng success.The first was the Hindostơn. which carried only 200 tons o f cargo but needed
500 tons o f coal fo r fuel.

Sailing vessels continued to be built fo r the carriage o f low-value cargoes weli into the 20th
century. Steamships developed stovvly because their machinery was expensive to buy and to run
in comparison with sailing ships, which relied on a free source o f pow er (wind). Howeven unlike
sailing ships, steam propulsion meant that ships could adhere to a timetable in all but extreme
vveather. In addition, steamships could take more direct routes as they were not dependent on
the prevailing vvinds.

48 Institute of Chartered Shipbrokers

 T h e Supply of Ships

In the early days o f steam it was the requirements o f passenger traííic rather than cargoes that
encouraged owners and builders to develop ocean shipping.White Star Line launched the first
o f the luxury trans-Atlantic liners, the Oceanic - o f 17,272 gross tons and capable o f 2 1 knots -
in 1899.

There was a third milestone in the development o f merchant shipping: wireless telegraphy.This
permitted an enormous step fo w a rd as it became possible not only to communicate directly
with customers overseas but also to make contact with the ships themselves. Compared with
to d a /s satellite-based voice and email contact betvveen ship and shore, telegraphy was a
primitive form o f communication in vvhich radio officers tapped out messages in Morse code.

The spur to international trade provided by technological progress was matched by

developments in p o rt inírastructure and construction o f canals fo r oceangoing ships.The Suez
Canal through Egypt opened in 1869, the Kiel Canal across northern Germany in 1895 and the
Panama Canal in 1915.The Suez Canal was so effective in shortening the voyage time to India
and the Far East that the w orld suddenly experienced an oversupply o f ships.

Deveiopment o f passenger ships continued, including the ill-fated Titanic and the magnificent
Queen Mary. Advances in machinery included oil-burning steam turbines fo r the best o f the
luxury liners. Oil aiso started to become the fuel o f choice fo r reciprocating steam engines.The
íìrst diesel engines began to appear in the I930s although coal-fìred tram p ships were still in
Service well into th e 1950s.

The Second W o rld W a r had a proíound effect on merchant shipping with thousands o f merchant
ships being sunk by submarines.To replace the lost tonnage, a type o f ship was designed that
could be mass-produced by semi-skilled labour.The vast majority o f these ships were buiit in
N o rth America to a British design.

The most íamous o f these was the 'Liberty’ class and although they were looked on as being
expendable, th e / continued in Service fo r many years a fte rth e w ar was oven In m id-November
19 4 1, the keel o f the merchant ship Roberĩ E. Peary was laid. It was built in a record time o f four
days 15.5 hours.

Towards the end o f the war, counter-measures against submarines had become so effective that
merchant ship losses were minimal, but production lines were still turning out record numbers
o f ships. Despite a massive upsurge in w orld trade in the late 1940s and early 1950s, there were
more than enough ships to cover the requirements o f trade, with the result that there was little
íncentive to develop merchant shipping. Meanvvhile, oceangoing passenger liners were íeeling
the eííects o f competition from improved airtransport.

As the Liberty ships came to the end o f their lives, the need fo r replacements was obvious and
the pressure was on to achieve economies o f scale in bulk transport. Provided the loading and
discharging terminals could be expanded to cope w ith larger ships, there appeared to be no
upper limit to ship size. Oil companies had little diffìculty in extending reíinery ịetties, which
allovved progressively larger tankers to be accommodated. Sizes quickly rose from the wartim e
average o f 15,000 tons deadweight to 50,000 tons. It was then only a m atter o f evolution for
ships in the 100,000-200,000-ton range to be developed u n derthe name o f very large crude
carriers (VLCCs) and eventually ultra-large crude carriers (ULCCs), the largest o f vvhich was
around 500,000 tons cargo-carrying capacity.

Although experiencing rather more modest growth, shippers o f iron ore, coal and grain also
sought to achieve economies o f scale. N ew loading and discharging terminals were built as new
ore and coal deposits were developed.

Economies o f scale count fo r little if larger ships end up spending longer in port, particularly those
loading and unloading manuíactured goods. Quick p o rt turnround times allow more voyages to
be undertaken in a year It was only when containerisation to o k hold in the i 960s that the liner
trades were transíormed. Once the svvitch to íreight containers was íìrmly established, and

Introduction to Shipping 49
C h a p te r 4

aided by a massive investment in new p o rt inírastructure and equipment, it to o k less than 30

years for Container ships to grow in size from being able to carry 2,000 20-foot-long containers
(known as teus) to capacities in excess o f 18,000teu.

~a

■Ấ

Quick port turnround times allow more voyages to be undertaken in a year

4.2 T H E SUPPLY OF S H IP P IN G
The effective supply o f shipping vvorldvvide is influenced by íour main íactors:

1. the number o f ships:

2. the size o f ships;

3. ship speed;

4. tim e spent in port.

These four íactors are interrelated. Two ships o f 10,000 tonnes provide the same carrying
capacity as one ship o f 20,000 tonnes. Simiiarly, a ship that steams at 20 knots (20 nautical miles
per hour) will spend half the tim e under way as one steaming at 10 knots; the íaster vessel
will thereíore provide twice the carrying capacity o f the slower one.The effective increase in
tonnage capacity resulting from ĩaster p o rt tu rnround times is just as easy to imagine.

The size o f the w orld fleet has increased enornnously in recent years and continues to do so.
The chronology o f increases in ship size is m ost easily seen in tankers.The following table shows
the deadvveight tonnage o f what was considered a 'large’ tanker fo r each period.

1914 8,000dwt

1945 I5,000dwt

1952 50,000dwt

1959 I00,000dwt

50 Institute of Chartered Shipbrokers

 T h e Supply o f Ships

1967 200,000+dwt (VLCC)

1972 330,000+dwt (ULCC)

1974 555,000dwt (w orid’s largest tanker)

Tanker sizes have not increased since 1974, As well as economies o f scale, there can also be
diseconomies o f scale.While it is true that a ship o f twice the size o f another will not need twice
as big a crew o r need twice the fuel consumption to propel it, there is a limit to the beneíìts o f
building bigger Larger ships need larger ports, but eventually a stage is reached at which many
ports cannot be deepened íurther and berths and handling equipment cannot be enlarged.
Reíìneries o r other industrial processes should be big enough just to meet the demands o f
the markets they supply.The oil companies appear to have decided that VLCCs, carrying 2m
barrels o f oil, provide a steady supply.This makes more economic sense than larger interm ittent
consignments even though the cost per tonne-m ile o f cargo in a bigger ship is lower. ULCCs
have proved to o big to be profitable and only tw o remain in w orld trade.

Container ships provide the best example o f economies o f scale in the shipping business. As
mentioned earlier, ships o f 2,000 20-foot equivalent units (teus) were once considered large.
Container ship capacity is measured in teus because containers are standard-size boxes
measuring 8ft wide, 8ft 6in high and either 20ft o r 40ft long. One 20ft-long Container is counted
as Iteu and a 40-footer is 2teu.

Throughout the I970s, w orld trade increased so rapidly that naval architects were pressed to
design the largest Container ship that could transit the Panama Canal.This is called Panamax size
and to o k Container capacities up to nearly 5,000teu.

18,300teu Container ship

The tremendous economies provided by ever-larger Container ships have reduced the cost of
carrying manuíactured goods in containers from one side o f the w orld to the othen stimulating
growth in w orld trade.This boost in trade has in turn encouraged construction o f even bigger
Container ships. Liner companies calculated that substantiaily larger ships would allow them to
trade economicaily vvithout using the Panama Canal. Ship sizes rose quickly: 12,000-15,OOOteu
Container ships became a reality and vessels o f 18,30ữteu are now being delivered.

Introduction to Shipping 5I
C h a p te r 4

Container traffic has an advantage over some other transport methods because o f its
intermodalism.This describes the way that a Standard Container can easily be transíerred from
one form o f transport - say, a truck o r a railway wagon - to anothen such as a ship, w ithout the
goods needing to be repacked o r manually handled.

Containers allow ports that are to o smali to accept the iargest vessels to be served eííìciently
through a process known as transhipment.The p o rt with greatest capacity becomes the hub o f
a Container transport network, vvhere containers are transíerred o r transhipped from the large
Container carrier to smaller íeeder ships.

For shipping, intermodalism is a double-edged sword. Because o f inland trade, more containers
travel by road and rail than by sea and in recent years, larger trucks have been introduced in
Europe and N o rth America. Even when carrying a 40ft box, there is unused space on the lorry
trailen which has encouraged production o f 45ft-long boxes. Many o f the latest Container ships
are designed to take a mix o f 40ft and 45ft boxes. Increasing space is being allocated to the
larger containers, vvhich suggests that at some point 45ft containers vvill be the most populan

Merchant ships sailed at 10 knots o r less in the m id -l9 th century, but much íaster speeds are
possible today. There is always a balancing act to be períormed, howeven fo r while a íaster
ship can períbrm more voyages, greater speed requires more fuel to be burned. Beyond a
certain point, any increase in speed will require a disproportionate addition o f povver and fuel
consumption, so there is usually an ideal speed range for every size o f ship, depending on its
hull design. Reducing speed to cut fuel consumption may become necessary when trade is poon
íreight rates are low o r fuel costs become very high.

Unemployed ships laid up

Engine designers have made considerable advances in machinery since diesel engines
became the Standard pow er piant fo r ships. Marine diesel engines use more o r less the same
grades o f oil as used to be burned in the boilers o f steam engines, unlike the lighter íuels
used by road vehicles. Designers have to reconcile tw o aims.The first is to achieve the highest
speed with maximum fuel economy, and the second is to offer the vvidest possible range o f
economical speeds.

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In prosperous times, a wide margin o f economical speeds enables a ship to increase o r decrease
its speed to meet its schedule as efficiently as possible - something that is particularly im portant
for Container ships. In recent years, large Container ships have been able to cruise at about
25 knots, vvhereas bulk carriers and tankers are content to sail at around 14 knots. A fte r the
economic dovvnturn o f 2008, Container ship speed became a major talking point. W hen the
financial crisis broke, a great many ships, including some very large vessels capable o f carrying
around 12 ,0 0 0 -13,000teu, had been ordered in anticipation o f ever-increasing w orld trade and
these continued to be delivered as global trade stagnated.The presence o f so many new vessels
during a depression has pushed íreight rates to very low levels. As a result, many liner operators
have put their ships into storage (knovvn as lay-up) and operate their remaining ships at reduced
speeds.The strategy is term ed slow steaming.

This situation was anticipated by some in the industry, notably the German classification society
Germanischer Lloyd. It had been questioning the need fo r such fast Container vessels fo r several
years.At present, a speed o f 20 knots is considered to be the most economic, but many believe
that this should be reduced to 18 knots.

A ship can be up to tw o years in the design-and-build stages beíore it is ready to carry cargo.
O ver that period the perceived demand that persuaded the ow ner to opt fo r a new ship may
have evaporated. Portunately, w orld trade has proved m ore resilient than many had thought,
greatly helped by China gaining membership o f the W o rld Trade Organization in 2001 and the
opening up o f its massive markets to both im ports and exports,

W hen trade grovvs it can do so in a variety o f ways. More o r bigger vessels can handle increased
trade betvveen existing ports o f loading and discharging, but coping with most trade growth
these days is not so simple. As demand fo r com m odities and Products grovvs, existing sources
cannot always satisfy demand. N ew sources have to be íound, vvhich may be m ore distant
írom the end market. O n the other hand, sources that once were considered uneconomic
may suddenly become attractive as demand soars.The impact on shipping is such that if the
total tonnage traded o f a product increases by 10%, there could be an increase o f up to 50% in
tonne-miles. As a result, many more new ships will be needed to carry this extra cargo.

The bulk carrier is one ship type that seems to have found its optimum size range.This is
a complex combination o f maximum economies o f scale coupled with the demands o f the
consumers plus certain limitations imposed by physical constraints.

Improvements in ship design need to go hand in hand w ith improvements in ports. In the
minerals secton bulk cargo terminals are often ovvned o r operated by the companies that
extract and e xpo rt the raw materials. In other cases, commercial competition ensures that the
size o f the p o rt o r terminal is appropriate to the ships that call there,

Competition between ports is fierce in the Container industry. The key is intermodalism, by
which a Container moves sm oothly from th e ship to a road o r railway vehicle and th e n remains
on wheels until it reaches its destination. Porthis reason it is no longer vital fo rth e ship to call at
a p o rt as near as possible to the im porter o r e xp o rte r Instead.the ship can choose a p o rt that
provides the best íìnancial return on the voyage.

The fìrst consideration is the p o rts geographical position, because it is in the shipovvners interest
to keep the voyage as short as possible.The accommodation has to perm it even the largest o f
the owner’s ships to berth w ith the minimum o f delay.The p o rt authority can iníluence this by
contracting a dredging company to deepen the approaches to, and areas alongside, the berths.
The p o rt o f Rotterdam, fo r example, increased its depth o f water by 15 metres (50ft) over the
course o f the 20th century.

The p o rt also has to o ffe rth e right equipment and inírastructure. Loading and discharging ships
today, especially Container ships. is considered in te rm s o f hours and minutes, not vveeks and
days as was the case 50 years ago.The speed w ith which quayside cranes can move containers
on and o ff the ship largely determines the tim e the vessel spends in p o rt - and tim e is money.

Introduction to Shipping 53
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Money, in the form o f the p o rts charges per tonne o f cargo o r per Container moved, is also an
im portant íactor in deciding w here the ship should call.

4.3 W H Y OPERATE SHIPS?

The reason for owning and operating ships is mainly to make a proíìt. But there are o ther reasons
that might apply, particularly to large trading houses that have large volumes o f cargoes to move.
Also, many governments encourage ship ownership and some operate a state-ovvned merchant
fleet. Owning ships under the national flag may be encouraged through financial incentives.The
main reasons fo r governments encouraging the development o f a shipping industry are given
below.

4.3.1 Conserving íoreign exchange

Countries with a limited ability to earn íoreign currency through exports may seek to ensure
that all, o r most, o f the goods they e x p o rt o r im p o rt are carried in th e ir ow n ships.This means
that the íreight charges are paid to themselves rather than to íoreign vessels. As the major costs
o f operating the ir own ships are paid fo r in th e ir own currency there is no drain on íoreign
reserves. Limiting the use o f íoreign ships has been implemented in some cases by directing
cargo to state-ovvned vessels and in others by arranging preíerence to be given to ships ílying
the national flag.

Large Container ship

4.3.2 C ontroi of tra d e and prestige

Newly independent countries often seek to reiníorce that independence by establishing a
national shipping line. O ften an airline has been established, followed by a shipping line.VVhile a
national airline still seems indispensable fo r many countries.the need fo r a national shipping fleet
tends to fade as the country becomes m ore settled and commercial shipping is able to provide
sea transport more cost-effectively.

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4.3.3 Earning foreign exchange

Some countries have seen that operating ships, especially passenger cruise ships, can be
profitable in íoreign currency term s and often in real term s as vvell.The íorm er Soviet Union,
w ith its m ajor construction and operating costs all being in roubles, was able to provide low-
cost cruising o f acceptable quality w ith a substantial p ro ĩit left over for the State operators.
A ttem pting to achieve simiiar profits w ith merchant ships is more diíĩìcult because o f the high
cost o f com peting in the open m arket against the m ajor maritime countries. Nevertheless, if the
country concerned has sufficient natural resources, then viable national íleets can emerge, such
as in Brazil w ith mining giant Vale.The State can then lim it shipments to its own ships, ensuring a
good basic income fo r local shipping companies.

4.3.4 s tra te g ic needs

Many countries feel th at they should have a m inimum level o f merchant tonnage under their
own flag in case ships are needed to move strategic supplies during an emergency.This approach
is less apparent in peacetime, but tends to resurface at times o f conílict.

4.4 P R O T E C T IO N IS M
O nly countries w ith a substantial shipbuilding industry, such as South Korea, have been able to
maintain a viable cargo preíerence scheme. Even so, the estimated cost o f running and operating
a fleet cannot alvvays allovv fo r m ajor market Auctuations.

A country may provide o th e r íorm s o f protection to its shipping industry. Because shipping
is a tru ly international market, the same rates o f íreight are payable and the same income is
achieved, regardless o f the ships nationality. Each countrys economy is unique, however; so
costs o f living diíĩer. C rew wages represent a m ajor cost item fo r shipovvners and operators, so
it is clearly cheaper to em ploy a crew from the Philippines, at rates appropriate to their local
economy, rather than one from a vvestern European country.

A governm ent may assist its shipping industry by offering a cash subsidy to buy ships.This is how
the USA has satisíìed its requirem ent fo r a strategic merchant fleet. Direct subsidies to shipyards
have proved almost as effective and many countries provide them in o rd e rto maintain the local
shipbuilding industry against othervvise unbeatable íoreign competition.

Several countries preíer to operate a form o f indirect subsidy, vvhich may be in the form o f
special income tax concessions. O thers provide Capital finance at rates o f interest far b elow the
market level.

4.5 S H IP R E G IS T R A T IO N
Every seagoing ship must have a nationality. A ship must thereíore have a register shovving both
the country and the specific p o rt that is its hom e.That p o rt o f registry is painted beneath the
ships name across the stern, and the vessel flies the national flag o f its country o f registry.You
will often hear the expression that a ship is Aagged in a certain country, vvhich is the same as
saying the ship is registered there.

Originally, ílagging was simple. A ship was registered where the owner had their office, which may
o r may not be an actual p o rt. Ships are registered to landlocked countries such as Switzerland
and Zambia, although clearly those vessels can never dock at their home ‘p o rt’.

Shipovvners began to find that registering ships in their own country was becoming to o
expensive. In some cases, local wage levels w ere considered to o high to be competitive.
National governments o r trade unions sometimes imposed minimum manning levels that were
o u t o f line w ith those o f o th e r countries.

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As th e / found these costs were making them uncompetitive, shipowners looked fo r countries
that imposed lo w e r taxes and less demanding Controls on ships under th e ir flag, Panama and
Liberia, which each operated a simple scheme allovving owners to establish a Shell company in
the country, soon became the ovvners’ registries o f choice. In fact, the Liberian flag was actively
encouraged by us shipovvners, who íound they had no chance o f surviving underthe ir own flag
vvithout government assistance.

Many other countries have followed the pattern o f Panama and Liberia in establishing these open
registries. The traditional maritime countries countered the ioss o f tonnage by creating th e ir
own open registries that retained the national flag and national compliance with international
saíety conventions but relaxed many o f the íìnancial and crewing rules.

Open registries have been criticised fo r their lack o f strong control and alleged lack o f care about
ships' observance o f saíety measures, particularly the International Maritime Organization (IM O )
Saíety o f Life at Sea (SOư\S) and Marine Pollution (Marpol) conventions. All the traditional
maritime countries, and also many open registry countries, have ratiíìed these agreements. Some
countries have not done so, howeven and such flags tend to attract shipowners that have scant
regard for the saíety o f their personnel o r for the cargoes they carry.

The ships name and p o rt o f registry are shovvn on the ships stern togethervvith its IM O number

It is vvorth noting that most IMO conventions must be ratiíied by a certain number o f states
controlling a specifìed percentage o f the w orld fleet before they take effect. It vvould have been
impossible to bring many o f these conventions into effect w ithout the support o f open registry
countries such as Panama and Liberia, which in some instances have proved more supportive
o f the IMO's saíety and environmental conventions than have traditional maritime states.
Liberia, fo r exampie, was th e íirs t c o u n try to ratiíy the section o f M arpol th a t Controls polluting

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emissions from ships' engines. Despite Europe being home to many o f the vvorlds shipowners
and managers, the European Commission has sometimes felt the need to introduce regulations
that are more severe than those íormulated by the IMO.

Criticism about their lack o f control o f ships ílying their flags has prompted the more prominent
open registry countries to take a greater interest in control and eníorcement o f standards on
board. Some are removing the w orst ships from their ílagged fleet, while others have closed the
d o o r to newcomers.

It should be understood that many o f the open registries, particularly those with the poorest
standards, are not run by the governments o f the countries concerned but are commercial
enterprises that simply pay a fee to the government. The countries tend to be small and
impoverished, and the registry is seen as a way o f generating income. Sub-standard ships are not
restricted to open registries, however; some national-flag ships compare uníavourabỊy vvith the
average open registry ship.

A ttem pts are regularly made to counteract the problem o f sub-standard ships. An international
affiliation o f transport trades unions knovvn as the International Transport W orkers' Pederation
(ITF) from tim e to tim e arranges a ‘svvoop’ on a ship that employs what the ITF considers to
be an underpaid o r badly accommodated crew. It tries to ensure that all the unions in the p o rt
where the ship is lying boycott the ship until the ovvner agrees to sign a contract with its crew
on terms laid down by the ITR

4.6 PO RT STATE C O N T R O L
The governments o f countries with ports and access to the sea used to take little interest in the
condition and operating standards o f ships belonging to other states. Provided they paid their
p o rt dues, such ships vvere free to trade w ithout any Controls o r sanctions from the states o f
the ports they visited.

Since the I980s, however, there has been a grovving emphasis on saíety and environmental
protection at sea. Public pressure íorced authorities to take measures to saíeguard the
environment around their coasts, and it was in this atmosphere that the idea o f p o rt State
control (PSC) was developed.

A t first, individual countries gave themselves the povver to intervene and impose restrictions
on any ship that was felt to pose a threat to the national interest, irrespective o f the flag it was
ílying. But acting alone was not particularly effective, since a pollution incident, fo r example, may
have originated in the waters o f a neighbouring country.

In 1982, several European countries met in Paris to agree to take joint action on PSC issues. As
a result, the group is known as the Paris Memorandum o f Understanding (MoU). Later, Canada
joined the group to extend PSC across the N o rth Atlantic.

Ten years laten a second regional group was íormed by Latin American countries, vvhich was
rapidly followed by the Pacific,Tokyo and Caribbean groups.The USA operates its own PSC
regime outside any regional group. More recent PSC groups cover the Indian Ocean, the
Mediterranean,West and Central Afhca,the Black Sea and Arabian Gulf.

Port State control authorities target ships using a number o f criteria such as past record, flag,
class, ship type and ownen Statistically, some ship types, ovvners and flags are more likely to be
sub-standard than others, and these are prioritised fo r inspection. A selected vessel is boarded by
an inspecton w ho íìrst checks the ships documents. If the document check reveals problems o r
if the inspector has reason to believe the ship needs a closer inspection.they will go through all
aspects o f the ship, covering construction, maintenance, navigation equipment, safety equipment
and procedures, fìre-fìghting capability and pollution prevention compliance.

VVith the entry into force in August 2 0 13 o f the International Labour Organization (ILO)

Introduction to Shipping 57
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Maritime Labour Convention (MLC), PSC inspectors now have a clearer guide to acceptable
standards fo r crew welfare.The MLC covers matters such as the minimum age o f crew members,
conditions o f employment, access to medical care, safety training and even food and recreational
íacilities on board ship.

H er Majesty’s Mantime and Coastguard Agency IS responsible fo r p o rt Sta te control in the UK

There is a standardised procedure fo r PSC inspections, although understandably standards do

vary. A t the end o f the inspection the PSC officer records details o f any deíìciencies found. If
the deíìciencies are suíTiciently serious, the vessel may be detained until they are rectiíìed. If oniy
minor deíìciencies are found the vessel is ailowed to sail, but will be given a tim e limit to rectity
each deíiciency.

All the reports are stored on a Central database by each MoU and in the USA. Ships that
have been detained are recorded on the database and details publicised in nevvspapers and
on websites in an attem pt to shame the owners o r operators into improving conditions on
the ships.The ultimate sanction is a complete ban o f the vessel entering any p o rt vvithin the
regional MoU.

4.7 SH IP C LA S S IFIC A TIO N

It is im portant to understand the difference betvveen registration and classiíìcation. Registration,
it will be recalied, establishes a ships nationality - its flag.

Classification is the way a ship obtains a certificate o f quality. VVithout this, no one vvill want to
insure the vessel o r the cargo it carries, and no wise person vvould wish to entrust their cargo to
such a ship. Ciassiíìcation is provided by classification societies, some o f vvhich are government
bodies while others are commercial organisations.

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Classitìcation is by no means essential worldwide, but some countries do insist on it - often

because the roles o f flag inspection and classiíìcation society are combined within a single
organisation. Russia and South Korea are both examples o f this. India has a similar system, but
fo r commercial reasons most Indian shipowners class their ships with one o f the European
classiíication societies as well.

A t one tim e all classitìcation societies were considered reputable, but alongside the growth
in open registries there has been a huge increase in the number o f bodies calling themselves
classifìcation societies, some o f vvhich operate to dubious standards. It is diffìcult to say exactly
how many classiíìcation societies are operating because some o f the poorest ones are short-
lived, but there are probably betvveen 30 and 50.

Because classitìcation societies are so obviously linked to the condition o f the vessels that they
classiíy, p o rt State control authorities oíten target ships fo r inspection based on their classiíìcation,
Those that have the w orst record sometimes close and reopen under a new name to avoid this
targeting strategy.

The largest and most reputable societies are members o r associate members o f the International
Association o f Classification Societies (lACS), an organisation established to ensure consistent
standards. It also collectively develops regulations and undertakes research into all aspects o f
ship design and construction.The current membership o f lACS is given below.

Members Symbol

American Bureau o f Shipping ABS

Bureau Veritas BV

China Classiíìcation Society CCS

Croatian Register CRS

D N V GL Group DNVGL

Indian Register o f Shipping IRS

Korean Register KR

Lloyds Register LR

Nippon Kaiji Kyokai (Class NK) NK

Polish Register PRS

Registro Italiana RINA

Russian Maritime Register o f Shipping RS

The Lloyđs Register o f Ships and its O n lin e database Seơ-VVeb is particularly valuable to shipping
business practitioners because it includes every ship in the w orld o f more than 100 tonnes
deadweight regardless o f w hether o r not it is classiíìed by Lloyds.

The Lloyds Register numbering o f ships is so comprehensive that the IMO uses it to issue each
ship with a number that is used on offìcial documents and is prominently displayed on the ship
itselí. This number stays with the ship throughout its life, regardless o f name and ownership
changes, vvhich permits its history to be researched as necessary. W hen a ship gains a poor
reputation through PSC detentions, fo r example, unscrupulous owners may change their
company name and the name o f the ship. Howeven because the ship keeps its IMO number,
potential charterers, insurers, PSC authorities and others can still indentiíy the ship.

The accepted classiíication with Lloyds is lOOAI, which indicates that the ship has been
surveyed by Lloyds personnel and complies with its standards o f seaworthiness. W here a

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C h a p te r 4

Maltese cross Symbol is added, IOOAI * (described as Hundred A I Star), it signifies that the ship
was constructed u n d e rth e supervision o f Lloyds surveyors.

To maintain its class a vessel must undergo regular surveys, which include inspections afloat
and in drydock. A special survey has to take place every fìve years. Each special survey tends to
become rnore rigorous as the vessei ages. All parts o f the ship are subject to survey; the hull,
the machinery, boilers and tailshait (which links the engine to the propeller) all have th e ir own
survey programme. In 2 0 10, some classifỉcation societies introduced an extended drydocking
program m e fo r n ew ships o f certain types, m ainly Container, general cargo and m ultipurpose
vessels. These have to have been built to specific standards and with agreed maintenance
strategies in place. Ships accepted fo r these programmes are inspected alongside and need
drydock only every 7/2 years until they are 15 years o f age, when they revert to normal
inspection regimes.

The beginning o f this chapter stressed the distinction betvveen classification and registration.
It is im portant to have this clear in one’s mind, because most countries entrust some parts o f
th eir registration procedure to a classiíìcation society. In particular; this involves a ships saíety
certiíìcation. Some flags leave the entire process o f registration in the hands o f a classification
society, so there is a risk o f coníusing the tw o processes.

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The ship iies at the centre o f the shipping industry. Although the minute design details o f a ship
are beyond the scope o f this book, certain basic aspects need to be understood.

5.1 T O N N A G E A N D LO A D LINES
W hen describing a ship people often State that it is so many tons. In shipping the w ord 'ton', o r
the metric equivalent, tonne, has a variety o f meanings and ways o f being calculated.

For instance, when reíerring to a ships volume fo r carrying cargo,'ton' does not re fe rto a unit o f
mass o r weight at all. It was derived from the w ord 'tun', which meant a 252-gallon (1,146-litre)
barrel used in the wine trade in the days o f sail. A convenient way o f estimating a ships size
was to calculate how many o f these barrels it could carry and that íìgure was used as the ships
registered tonnage.

From thattradition .and after engines were added to ships.there evolved the ships gross register
tonnage (GRT) and net register tonnage (NRT).These were a measure o f the enclosed space in
the ship calculated on the basis o f a ton being 100 cubic feet. Gross was the total space, while
net was this íìgure less any space used fo r machinery and accommodation.

DECKUNE

300 mm

_ iJ £

LT_ ĨL

LS.
230 mm

LW 230 mm

w
LWNA
.WNA
4S0nnni I

230 mm S40m m Aft S40 mm Fòrword 230 mm

ALL LINES ARE 25 mm IN THICKNESS

Plimsoll mark to show loading levels in various climatic conditions

There tended to be variations from country to country in the method o f measuring ships íor
their GRT and NRT so that a new system o f measurement was internationally agreed and came
into full force in 1994.The ton now varies between 95 and 105 cubic feet depending on the size
and the type o f vessel.To differentiate between the old and the new system the word Vegister'
was dropped so that we now have gross tonnage (GT) and net tonnage (NT). Because the
change is still relatively recent some people, even seasoned proíessionals, may still mistakeniy

62 Institute of Chartered Shipbrokers

 T h e Ship

re íe rto GRT o r NRT when they mean GT o r N T But the old terms are not completely obsolete
because some countries still calculate minimum manning levels based on the old íìgures.

These somewhat curious uses o f the w ord 'ton' are retained because entities such as p o rt
authorities, which base their charges on ship size,considerthatthese measurements give a good
idea o f a ship’s revenue-earning capacity. Gross tonnage is also the preíerred measurement
system for passenger ships.

Despite w orldw ide discussion and agreement, the Suez Canal and Panama Canal authorities
have retained th eir own unique methods o f measuring ships fo r the purpose o f calcuiating
canal charges.

O th e r systems do use weight as the basis o f measurement. A t one time, the type o f ton used
depended on the ship's nationality, but today the methc tonne is used almost universally. It should
be noted that vvhile the British use the spelling 'tonne' to indicate the metric measurement,
distinguishing it from the imperial o r ‘long’ ton ( 1,0 16 tonnes), other European countries tend to
use the 'ton' spelling to mean the metric measurement.

5.1.1 Displacem ent tonnage

The w ord 'displacement' is used in reíerence to Archimedes Lavv.This states that the weight o f a
body is equal to the vveight o f w ater it displaces. Loaded displacement, which is the total weight
o f the ship and all that it is carrying, is not employed fo r merchant shipping but is commonly
used as a way o f reíerring to the size o f vvarships.

5.1.2 Lìght displacem ent

This is the actual weight o f the empty ship, vvhich is o f interest to technical people. It is also
essential to ship sale and purchase brokers when negotiating the sale o f a ship fo r recycling or
scrapping. It is a measure o f th e quantity o f Steel and o th e r metals th a t are being sold.

5 .1.3 D eadw eight (d w t)

This is the difference in tons between the light and loaded displacement, but its commercial
importance is that it represents the total weight a ship can carry which includes cargo, fuel, stores,
fresh w ater and so on. You may also encounter the acronym DWAT, standing fo r deadweight
all told.

O f greater importance to those concerned w ith the ship commercially is the acronym D W C C ,
which stands fo r deadweight cargo capacity, which indicates the potential earning capacity o f
a ship. Hovveven it is a figure that may change.When quoted in a ship's description it assumes
tha t the maximum quantity o f stores and bunkers are on board. In practice, the operator may
increase the DVVCC by carrying less bunker fuel.

5.1.4 Loadline
A ships deadweight is determined by its loadline. A ship has a maximum depth to which it is
perm itted to be loaded.This is reíerred to as the ships draughtThe draught differs according
to the part o f the w orld in which the ship is loading and also the tim e o f yeanVVhen reíerence
is being made to a ships deadvveight w ithout any qualification, it invariably refers to the amount
tha t can be loaded on its summer marks.

The ships maximum draught and its variations are determined according to an internationally
established íormula.This international convention was the first one dealing with ship safety and
was established in 1876. It was then that Samuel Plimsoll, a campaigning politician, persuaded
the UK government to pass a Merchant Shipping Act, which gave the authorities powers to
detain unsaĩe ships. By an amendment dravvn up in 1894 it introduced a loadline. This was

Introduction to Shipping 63
C h a p te r s

the deepest level to vvhich a loaded ship could sit in the vvater and was shown on the side
o f the ship by a painted circular disc.The circle is 12 inches in diameter with a line 18 inches
long drawn horizontally through its centre,which represents the loadline. Addítional marks have
been added over the years.The International Convention on Load Lines (ICLL) was adopted
in 1966 and entered into íorce in 1968, with subsequent amendments since then. Because o f
Plimsoirs involvement, the loadline is sometimes reíerred to as a Plimsoll Mark,

The location o fth e ioadline is decided when the ship is constructed and the decision process is
overseen by the ships classification society, which issues the loadiine certiíìcate and supervises
the placing o f the loadline.This mark is situated approximately amidships on both sides o f the
vessel.The classification societys initials, such as LR, GL o r PRS, are included in the loadline.
The maximum draught allowed ís calculated according to a íormula laid down in the Load
Line Convention. O wners are permitted to opt fo r a lesser draught and, if they do so, a lovver
N T can be assigned to the ship. Ovvners that intend to use their ships fo r carrying lightweight
cargoes may choose this option because it means that p o rt charges calcuiated on the ships GT
o r N T will be lowen

Plimsoll m ark which is painted on each side of a ship

t
Assigned sum m er
íreeboard

TF

F
T

w
W NA

Forward

Commercially, one tends to associate the loadline w ith the draught o f the ship, but the safety
aspecl oí the loadline is concerned with the ships íreeboard.This is the am ount o f the ships
huil betvveen the vvater levei and the loadline deckThis is the highest continuous watertight
deckThe ievel o f this deck is indicated by a horizontal line painted on the ship’s side above the
loadline itselí

Different parts o f the w orld and different seasons are considered to vary in their degree o f
risk and so vary in the amount o f íreeboard necessary fo r saíety. International convention has
divided the w orld into zones, withTropical being the least dangerous and VVinter N o rth Atlantic
zone the most dangerous. Purthermore, saltwater provides more buoyancy to a ship than íresh
water so that if the ship loads in fresh w ater it may be loaded to a deeper draught. It will then
rise up to the correct draught when reaching the ocean.

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 T h e Ship

For these reasons a ships loadline can have as many as six marks, each o f vvhich has an initial
against it, representing:

TF Tropical Zone (íresh vvater)

F Presh W ater

T Tropical Zone (saltvvater)

s Summer (in other zones)

w W in te r (in other zones)

W NA W in te r N o rth Atlantic

The actual mark (the disc w ith a line through it) is the Summer mark. On the line are placed
the initials o f the classiíìcation society that surveyed the ship to determine the positioning o f the
m arkThe illustration shows LR fo r Lloyds Register

Ships used for carrying tim ber o r lumber may be granted an additional privilege because o f the
inherent buoyancy o f the cargo and allovved to load deeper than ships carrying other cargoes.
Additional loadline marks, corresponding to those mentioned above, are painted on the ship
and prefixed w ith the letter L. If the ship happens not to be carrying tim ber on a particular
voyage.then the maximum draught will be in accordance with the Standard marks.

5 .1.5 D raught
Sometimes spelt ‘draít’, this w ord refers to the distance between the bottom o f the ship (the
keel) to the level o f w ater on the ships side, the waterline.

The greaterthe weight o f cargo loaded.the deeperthe ships hull is submerged in the w ater and
the deeperthe draught.This is shown on a deadweight scale which is usually íound on a ships
bridge o r on a bulkhead in the accommodation. Pronn this, fo r every State o f the ships draught,
there is a corresponding total deadweight.The scale makes it possible to estimate approximately
the additional amount o f cargo that will take the ship down to its maximum draught.The íormula
used is tonnes per centimetre (TPC) on fo r older British and most us ships, tons per inch (TPI).

Draught marks on a ships bow

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C h a p te r 5

For some bulk cargoes.the taking o f a draught reading beíore loading has started and then again
when loading is íìnished gives a good check on the weight o f cargo that has been loaded.This is
called a draught survey and when it is o f critical importance it is usually carried o u t either jointly
by personnel from the ship and from the ternninal o r by an independent surveyor

The w ord ‘draught’ is also used in reíerence to the depth o f vvater available at a certain place -
fo r example,‘the draught available at low tide is six metres'.

5 .1.6 Ship m easurem ent based on volum e

The ship’s interior dimensions are im portant because some cargoes are bulkier than theỵ are
heavy. One tonne o f tim ber will clearly take up far more space than one tonne o f Steel. It would
be pointless arranging fo r a quantity o f cargo equivalent to the ships DVVCC if there was
insuffìcient cargo space in which to stow it.

For this reason it is vital to know both the cubic capacity o f the ship and the cargos stovvage
íactor - that is, the number o f cubic metres o r cubic feet to the tonne. A ship always has
tw o cubic capacities. One is reíerred to as the grain cubic, which is the measurement o f the
total cargo space.This is based on materials such as loose grain vvhich can flo w into all the
spaces in the holds.The other íigure, the smaller o f the two, is the bale cubic.This measures
around the beams and girders in the hold and is based on the fact that bales o f material cannot
occupy the awkward corners. The difference betvveen the tw o will vary according to the
construction o f the ship, but in older vesseis the baie cubic is roughly 10% less than the grain
cubic. Modern ships have an inner skin over the side beams so that the bale and graỉn cubỉc
are much closer.The cubic capacity o f a ship wiil depend upon the trade fo r which it has been
designed. A ship dedicated to the iron ore trade will not need as much hold space as one
intended fo r grain carrying.

5 .1.7 Stowage
Each cargo has its own density, vvhich for the purpose o f shipping is reíerred to as its stowage
íactonThis used to be measured in cubic feet to the ton (cu ft/ton), and well into the middle o f
the 20th century general-purpose ships tended to have a cubic capacity w ith a ratio o f about
40 cu ft to the ton deadweight. For this reason, cargoes w ith a stovvage íactor o f less than 40
cu fl/to n were reíerred to as deadvveight cargoes. Those o f less than 40 are reíerred to as
measurement car^oes,

Two things have changed since then: most countrìes have adopted the metric system and multi-
purpose ships novv have a cubic capacity closer to 50 cu ft/ton.This means there is a rather
vvider range o f cargoes w ith which a ship can be full and down - the State vvhere a ship has its
holds full to the to p and the waterline ievel with its loadlìne.

Although cubic capacities are now measured in cubic metres, many shipbrokers around the
w orld still use cubic feet when quoting stovvage íactors. Partly this is because it is easier to
w o rk with and remember stowage factors v/hen quoted in cubic feet. W heat, fo r example, has
a stowage íactor between 40 and 44 cu M o n n e , the eqưivalent in metric woulcl be i . 13 3 -
1.246m3/tonne. O f course, the ships cubic has to be converted into cubic feet, but this involves
just a single multiplication o f the quoted figures, aithough in most cases the ow ner vvill simply
give the cubic in cubic feet vvhen describing the ship.

It is vítai that you appreciate the manner in which stowage íactors can vary between diíĩerent
cargoes.When actively engaged in shipping business, knowledge o f stowage íactors is important,
as is shovvn by an example from the tim e when Britain started im porting m ore coal than it
exported. British coal is mainly deep-mined and very dense, so shipowners were safe in
assuming coal to be a deadweight cargo.W hen ships loading coal from N o rth America were
being chartered, hovvever, the market realised that shallow-mined coal can stow far lighterthan

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deadweight. Some unhappy disputes arose beíore charterers and owners recognised that they
now needed to check on the stovvage íactor

There are reíerence books to be found in all shipowners’ and charterers' offices and often
in brokers’ bookcases as well.These outline stowage íactors and include comments alongside
some commodities. Readers should develop the habit o f memorising any crucial characteristics
about cargoes such as a tendency to combust spontaneously o r to contaminate the holds, o r
the need to be kept dry, cool and vvell ventilated.

5.2 TYPES OF SH IP
W e have already mentioned the many difíerent types o f ship and how they have evolved. In this
section we take a closer look at some o f them and their principal íeatures.

5.2.1 B ulk carrier

These are the simplest o f ships in terms o f construction and are designed to carry homogenous
cargoes in bulk. W ha t they will have in common is a single deck with clear holds and large
hatches. Some existing bulk carriers are o f single-skin construction. Some ships with double hulls
have been built and continue to be built, but the IMO rejected a tnove to make this m ethod o f
construction mandatory in 2006.

Bulk carriers vary in size from small Coastal ships o f a few thousand tonnes deadweight up to
ships capable o f carrying as much as 400,000 tonnes o f cargo.

5.2.2 Capesỉze
This te rm reíers to any vessel to o large to pass through the Suez o r the Panama canals.The
latter effectively puts a lower limit on the DW AT o f around 75,500 tonnes. Anything above this
size vvould be considered a Capesize vessel until the enlarged Panama Canal is commissioned.

Typically, a ship o f this type has nine cargo holds o f approximately equal size. Capesize vessels
are rarely, if even equipped with gear and are used mainly in the grain, coal and ore trades. Bulk
carriers contracted after 2003 are required to be íìtted with a raised íorecastle, as a m ethod o f
protecting hatchcovers against heavy-vveather damage.

5.2.3 Panam ax
These ships are the largest able to pass through the Panama Canal and so are a maximum o f
about 75,500dwt.Although vessels a tth e higherend may not be limited by length o r beam .their
draught when fully laden may make them to o deep. Such ships wili thereíore need either to be
part-laden o r full with high-stowage-factor cargo if they are to make use o f the shorter routes
made possible by the Panama Canal. Panamax vessels typically have seven holds and some are
equipped w ith gean In the main, Panamax vessels participate in much the same markets as the
Capesize ship but are more Aexible being able to call at a vvider range o f ports.

The dimensions o f the enlarged Panama Canal will enable ships, designated N ew Panamax, o f
366m LOA, 49m beam and 15.2m draught to transit the watetAA/ay. A modern Capesize bulk
carrier is about 180,000dwt, with an LOA o f 290m and a beam o f 45m. It could easiiy transit the
canal w ith a part cargo o f about 130,000 tonnes.

5.2.4 H andysize and handym ax

Such ships follow essentially the same design: handysize run from 20,000dwt to 35,000dwt and
ships above that are reíerred to as handymax. Both classes have fìve o r six cargo holds and
are much more likely to be geared than the Panamax and Capesize ships.The most marked

Introduction to Shipping 67
C h a p te r 5

difference is likely to be in the shape o f the cargo holds, vvhich in both o f the smaller types is
usually square-sectioned ratherthan hopper-shaped because, aside from grain and ore cargoes,
these ships are also active in the Steel and forest product trades. As a consequence.the hatches
need to open to give access to as much o f the hold as possible, and often extend virtually the
full vvidth o f the ship - leading to them being reíerred to as open-hatch vessels.This is n o t to be
coníused with open-hold Container ships, vvhich have no hatchcovers.

Ships belovv the sizes mentioned above are commonly reíerred to as small bulkers or
mini-bulkers.

The cross-section o f such a ship reveals that they are self-trimmers, as they are hopper-shaped
at the to p and bottom . As discharging proceeds, the cargo falls tovvards the centre o f the hold
so that it is under the square o f the hatch.Thus all the cargo is accessible to grabs vvithout any
manual labour being needed to trim it from the sides. W hen loaded, the shape reduces the
suríace area o f the cargo so that the extent to vvhich the cargo is able to shift in bad vveather is
kept well vvithin safe limits.

Additionally, the centre o f gravity o f the cargo is higher than it would be in a box-shaped hold.
This makes the ship more comíortable in a seaway.

There is a íurth er saíety íeature in this design because the sloping sections are vvater ballast tanks.
More often than not, bulk carriers have to travel long distances vvithout any cargo in the holds.
This would mean the ship would be so high out o f the vvater as to be almost unmanageable
in even moderately rough vveather, with the propeller probably half out o f the vvater. By íìlling
those tanks with vvater the ship can be brought down to a saíer draught with sufficient ballast
above the wateriine as well as belovv to make fo r a comíortable passage.

Such a design, with cubic capacity adequate fo r most bulk commodities, is by no means ideal
for one o f the most common bulk cargoes - iron ore. Such material is extremely dense and
so vvould only make a relatively small heap in the bottom o f each hold.W ithou t going into the
technicalities o f stability diagrams, ịf all the vveight is concentrated at the bottom , the ship will
behave like a pendulum in any sort o f rough sea. Such a movement, apart from being most
uncomíortable ío rth o se on board, imposes undue stresses on the íabric o f the ship.

The solution lies, o f course, in purpose-built ore carriers, which have a smalier cubic capacity
than general-purpose bulk carríers. Such ships are also specially strengthened along the fore and
aft line to cope with the strain that is imposed during ioading and discharge, when parts o f the
ship are full while other parts are empty.

5.2.5 Tvveendecker
Despite the proliíeration o f specialised carriers today, a substantial proportion o f the world's
trade is still carried in multipurpose ships that are the descendants o f this kind o f vessel.

Virtually all multipurpose ships are able to carry containers both in the hoids and on deck,
and most are equipped vvith cargo-handling gear and a stern ramp. Most o f these vesseis are
equipped with cranes, cornmonly with a liíting capacity o f around 30 tonnes, unless the vessel
is intended ío rtra de s vvhere heavy-lift cargo is írequently carried.As well as being employed in
general cargo liner services, multipurpose ships are oíten chartered fo r tram p voyages to carry
cargo th a t is n o t easily containerised.They are used in the bulk trades fo r cargoes such as Steel
and íorest Products, w hile fo r vessels equipped w ith íolding tvveendecks, grain, íertilisers and
coal are also popular cargoes,

The number o f holds varies from tw o to fìve, all íìtted with íoiding hatches. Ships w ith fewer
hoids often include one very long hold that can accommodate cargoes o f exceptional length
that need under-deck stovvage.

Tvveendecks add to a ships versatility because, apart from the obvious need to have a simple
way o f separating consignments, there is a limit to how many bags, drums, crates and other

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cargo types can be loaded one on to p o f another beíore the bottom tiers collapse under the
vveight o f those above,

5.2.6 C o ntain er ship

This type is used mostly in the regular liner trades and carries most o f the w o rld ’s trade in
manuíactured goods.

The large purpose-built Container ships are íuily cellular; which means that the holds have vertical
metal guides into vvhich containers can slide. Such a coníìguration obviates the need fo r any
íurther securing o f the containers vvithin the ship and also allows loading to take place much
more quickly. Such ships vvill load several tiers o f containers on deck that will, o f course, have to
be secured by substantial methods o f lashing.

The size o f Container ships is expressed in 20ft equivalent units (teus) based on the Standard
ISO 20ft-long containenThe largest vessels engaged in deepsea trade have a capacity o f around
18,300teu, but the vast majority o f the Container ship fleet is in the 8,000-10.OOOteu range.

5.2.7 R o ll-o n /ro Ịi-o ff (ro -ro )

These ships are designed fo r any type o f wheeled cargo. They range from small ferries fo r
shortsea crossings.to trans-Atlantic ships well up into the 20,000dwt class. Common to all ro-ro
ships is some form o f ramp so that the cargo may be driven o r towed on board. As well as cars,
trucks, trailers and the like, ro-ro ships often operate on a conventional cargo route.The usual
procedure for such an operation is fo r the cargo to be pre-loaded on to special trailers that
are tovved on by a specially designed tracton Alternatively, the cargo can be conveyed on to the
vessel and stowed by fork-lift trucks.

Ro-ro ships designed speciíìcally ío rth e carriage o f new cars are easily distinguished írom other
types o f ship by their slab-sided construction and minimal superstructure. Prequently, the bridge
on these vessels is located in a forward position although the engine room remains aft. Ro-ro
ships fo r carrying cars are often reíerred to as pure car carriers (PCCs) o r pure car and truck
carriers (PCTCs). Ships that are used on íreight and passenger ferry services are often called
ro-pax vessels.

For the most part, ro-ro ships are built vvith single hulls, but there is an increasing tendency
fo r íerries to be built with a catamaran hull. Some o f these are term ed fast íerries and are
capable o f speeds up to 40 knots.To help achieve this, extensive use o f aluminium is made in
the superstructure and, instead o f propellers, the ships are equipped with waterjet propulsion
systems.

Ro-ro vessels have been designed with their ramps in almost every conceivable position. Some
have straight ramos that proịect directly fon/vard o r aft o f the bow o r stern respectively. O thers
have quarter ramps that proịect at an angle from one o r other o f the stern quarters vvhile
some have side access doors.Vessels with quarter o r side access can usually berth alongside any
normal quay whereas those w ith straight stern o r bow ramps will require an L-shaped berth
to w o rk effectively. One advantage o f the straight ramp is that extremely long loads can drive
directly into the ship, which is not possible w ith quarter o r side access.

Ro-ros commonly have their capacity measured in lane-metres.This measure gives an indication
as to the total length o f space available fo r vehicles o f given vvidths.

5.3 C A R G O -H A N D L IN G GEAR
This phrase is used for the equipment that loads cargo on to a ship and discharges cargo from
the vessel. W ith highly specialised ships, such as the larger bulk carriers and Container ships, this
process is carried out by appliances on the shore, because the greater space available and lack

Introduction to Shipping 69
C h a p te r 5

o f need to w o rry about vveight enables shore gear to be íaster and have a greater capacity.
Tankers, o f course, depend upon pumps - shore pumps to put the cargo in, shipboard pumps to
discharge it. It has to be this way because pumps can push liquid very efficiently but suck rather
poorly.

it is on th e sm alier bulk carriers, Container íeeder ships and general-purpose ships th a t shipboard
cargo-handling equipment is íound and if the trade needs a ship with cargo gear; there are
various íeatures that have to be considered.

Most ships use deck cranes that operate at a fast rate.The main íactor here is the weight that
it can saíely lift, which is term ed its safe working load (SWL). Heavy-iift ships designed to carry
specialist cargoes have much larger cranes. In this secton a 250-300-tonne crane was considered
Standard until recently, but today there are cranes that can lift 1,000 tonnes.

The SWL o f cranes varies considerably depending upon the trade the owners have in mind,
Usually they are in the range o f 10-40 tonnes, but there is a trend tovvards slightly higher-
capacity cranes o f 60 tonnes. Heavy-lift ships engaged on speciaiised liner services are equipped
with a variety o f cranes including tw o large cranes as large as 320 tonnes.These can w o rk in
tandem to lift loads o f up to 640 tonnes.

5.4 TA N K ER S
These are vessels that carry liquids in bulk and can be split into tw o main categories: crude oil
and product tankers, and chemical and specialist tankers.

5.4.1 Crude oil and product ta n k ers

The following term s are used to describe the various types o f tanker that fall into this category:

i) ultra-large crude carriers (ULCCs);

ii) very large crude carriers (VLCCs);

iii) Suezmaxes and Aíramaxes, which are medium-sized crude carriers;

iv) product carriers.

The term ULCC describes tankers in the range 320,000-500,OOOdvvt. O nly tw o are currently
trading and none is on order A ULC C can carry 3m barrels o f oil.

VLCCs range from 200,000dwt to 320,000dwt and are employed on similar routes to ULCCs,
but th e ir smaller size allovvs fo r greater ílexibility.They can load at many terminals within the
Middle East, W est Africa and north-vvest Europe.They can discharge in the u s Gulf, Europe
and south-east Asia. They also have the advantage o f being able to transit the Suez Canal in
bailast condition,

Suezmaxes and Aíramaxes range between 80,000dw t and 150,000dwt and are, in the main,
used fo r shorter-haul trips w orldw ide.T he y have the advantage o f being able to load at most
terminals W'thin the N o rth Sea. No!"th Aírica and the Mediterranean, W est Aírica and the Far
East.Their reduced size also gives ílexibility vvithin the ports they serve, allovving many more
options to charterers and shipovvners.This type o f vessel can use the Suez Canal in either fully
laden o r part-laden condition depending on its size.

Product carriers can be subdivided into tw o main tonnage groups. The larger types carry
Products in quantities betw een 60,000 and 90,000 to n n e s w hile th e sm aller handysize loads
betvveen 20,000 and 55,000 tonnes.

Tankers are constructed to a simple but well-tested system, Longitudinal and lateral bulkheads
divide the vessel into a series o f centre tanks ílanked by tw o smali wing tanks.These wỉng tanks

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 T h e Ship

are used only fo r vvater ballast and, being segregated, do not become contaminated with oil.The
ballast can then be discharged overboard into the sea (where permitted).

Tankers are invariably self-discharging and m ost are equipped with at least four pumps that
operate at high speed, enabling a fast turnround in port. The rate o f discharge is, o f course,
affected by local conditions such as climate, size o f shorelines and the distance o f the receiving
tanks from the berth.

W hen carrying certain types o f oils, tankers require heating coils within the tanks to keep the
cargo íluid.Those coils, usually íitted in the bo tto m o f the cargo tanks, can maintain a constant
heat o f up to about 50°c. Heating coils are not usually íound in ULCCs orV LC C s because
they are to o large to load at m ost o f the terminals that supply the heavier and more viscous
crude oils.

5.4.2 Chem ical and parcel ta n k ers

O v e r the past 30 years, the expansion o f the petrochemical industry has seen the need for
specialist vessels to carry the sophisticated products now produced. The smallest speck of
rust o r drop o f vvater can ruin the speciíìcation o f many petrochemical cargoes. To counter
this, m odern chemical tankers are built w ith cargo tanks internally coated with types o f epoxy,
silicates o r polyurethanes, and the different coatings are compatible with different chemicals.The
most sophisticated chemical carriers are those whose tanks, pipes and pumping systems are
m ade o f stainless Steel.

Chemical and parcei tankers are usually no m ore than 50,000dwt.They must be able to carry the
maximum num ber o f diíĩerent products and, above all, must be able to keep them so completely
separate during loading, on passage and during discharging that there is no risk o f one product
contaminating another and, o f course, no hsk to human |ịfe o r the environment.

5.4.3 Gas carriers

The m ovem ent o f gas, both natural and Petroleum, is a major trade vvithin the shipping
industry,

As the name implies, natural gas comes o u t o f the ground in a form that allows it to be used
w ith little o r no treatm ent. An example is the N o rth Sea gas that íuels most homes and many
factories in the UK. Petroleum gas, on the o th e r hand, is a by-product o f the retìning process
o f crude oil. Am ong its many uses, the ones w ith vvhich we are probably most íamiliar are
the small cylinders o f butane used in portable stoves fo r camp cooking on smaller still, for
cigarette lighters.

Both types o f gas are carried in liquefied form and both need purpose-built ships. T h e / do,
however, need quite different types o f ship.

5.4.4 Liquefied Petroleum gas (LP G )

The tw o main types o f LPG, butane and propane, have the advantage that they can be kept in a
liquid State so long as high pressure is m aintained. As w ith all gases in a liquid State, th ey are able
to be kept that way m ore easily at a low tem perature.

Gases can, thereíore, be carried either at ambient tem perature under pressure o r in insulated
tanks at liqueíaction tem perature but at atmospheric pressure. They may also be carried in a
com bination o f these tw o states; at liqueíaction tem perature and under pressure.

For loading purposes the gases are liqueíìed by reducing their temperature by an amount
dependent on the actual product involved.This operation is normally carried out by the shore

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C h a p te r 5

installation. Most modern LPG carriers are, hovveven íìtted with refrigeration equipment so
they can reduce and maintain the cargo tem perature to about -50°C.The vessels onboard
reĩrigeration system can iiqueíy any gas that vaporises during the voyage o r while discharging.
The size o f LPG carriers has increased over the past 20 years from vessels that carried 700m^
to those able to transport more than 70,000m l

Cargo tanks in LPG carriers are normally cylindrical, constructed from aluminium alloy, and are
self-supporting and freestanding. T h e / are insulated to keep the heat out by a coating o f a
suitable material such as polyurethane foam.

5.4.5 Liquefied natural gas (L N G )

Natural gas cannot be liqueíied by pressure alone, so has to be carried at very low temperatures,
The main types o f natural gas are ethane and methane. Ethane has to be carried at - I04°c and
methane at -I6 3 °c , both at atmospheric pressure.Tvvo quite diíĩerent systems are used in the
design o f LNG ships, although both rely on insulated tanks to store the cargo.

The Moss system, named atter its designer, is instantly recognisable by the spherical tanks that
protrude high above the ships deckThe tanks themselves are made from an aluminium alloy
surrounded by insulation and protected by a Steel o u te r Shell.The tanks are connected to the
ships hull but do not form part o f it.

The second type o f ship employs the membrane-type containment system. Unlike the spherical
tanks o f a Moss-type LNG tanken the prismatic tanks o f a membrane LNG carrier are íully
integrated into the huii.The cargo containment system IS fitted inside the tanks, betvveen the
inner hull and the liquid cargo.

N either type o f storage system is fully eíĩective, so the gas cargo boils o ff at the rate o f around
0 .15% a day. Ordinarily, this would be considered a negative íacton but many LNG ships are
designed to make use o f this tendency and are equipped vvith steam turbine engines that are
mostly fuelled by the boil-off gas (BOG). Por this reason, LNG carriers need to take on bunkers
only fo r their auxiliary engines. More m odern LNG carriers tend to be dual-fuel and burn
normal bunkers ío rth e main engine and auxiliaries.

Most LNG carriers are built to Service the needs o f speciíìc contracts as there is only a small
spot trade in LNG.This situation is changing as the properties o f LNG as an aiternative fuel
to petrol and diesel are being more appreciated. LNG consists o f almost 96% methane which,
when burned, produces very few greenhouse gases. Although most LNG is extracted fronn
underground reserves in the same way as oil (and in the same geographical locations), it can be
produced ashore from waste materials. It is a fuel that is growing in importance, vvhich is driving
demand fo r LNG carhers.

The vast majority o f LNG carriers are betvveen I 35,000m^ and I45,000m^ equal to about
60,00ơ-70,000dwt, but new ships o f 250,000m^ have already been built.

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Capesìze vessel

Freefall Bridge and accommodation Raised íorecastle

liíeboat (Fo'c'sle)

After
Single peak Engine No.9 No.8 No.7 No.6 No.5 No.4 No.3 No.2 No.l
' / skin room hold hold hold hold hold hold hold hold hold
' hold
/

Double-bottom tanks Double-bottom tanks

Porepeak
Side-rolling_^hatchcovers \

Typical vessel specifìcations

Typical size l25-300,000d w t

Typical length 290 m etres
Beam 45 m etres
Draught 17.5 m etres
Holds/hatches N ine holds/nine hatches
Main englne 23-25,OOOkVVh

Introduction to Shipping 73
C h a p te r 5

Panam ax bulker

Cargo hopper tank for bleeding

o No.7

hatch
No.6
hatch
No.5
hatch
No.4
hatch
No.3
hatch
No.2 No.1
hatch hatch T

Typical vessel speciíìcations

Typical size 60-75,OOOdvvt

Typical length 230 m etres
Beam 32.2 m etres
Draught 12.8 m etres
Holds/hatches Seven holds/seven hatches
Capacity 78,000 cubic m etres
Main engine 16,500 kW h

74 Institute of Chartered Shipbrokers

 T h e Ship

Handysize bulker

Typical vessel specifications

Typical size 25-40,OOOdvvt

Typlcal length 180-200 m etres
Beam 24-30 m etres
Draught 9.5-10.5 m etres
C ran es 20-30 tonnes S W L X 4

Holds/hatches Flve holds/five hatches

Main engine 9-1 l.OOOkVVh

Introduction to Shipping 75
C h a p te r 5

M ultip u rp o se vessel

Typical vessel speciíìcations

Typical sizo 30,C 00dw t

Typical length 192 m etres
Beam 28 m etres
D raught 1 1.2 m etres
Holds/hatches Fo u r to five holds/eight to 10 hatches
C ap acity 30-35,000 cubic m etres
Teu 1,500
C ra n e s 40-300 tonnes S W L
Main engine 21,0 0 0 k W h
Speed 18-20 knots

76 Institute of Chartered Shipbrokers

 T h e Ship

Panam ax Container ship

Containers loaded
on deck

Typical vessel specifications

Typical length 294 m etres

Beam 32.3 m etres
Draught 12.04 m etres íresh w ater
Teu 4,000-5,500
C o ntainers Max 13 across
A ir draught 57.91 m etres
Deadweight A b o ut 50,000 tonnes
Main engine 48 .000kW h
Speed Up to 25 knots

Introduction to Shipping 77
C h a p te r 5

R o -ro vessel

H inged stern ramp Ramp to upper deck

------------ ■ -------------- J 1 ----------------- 1_ _

------------ -- & J
----------------------------------------------------------- '
Ro-ro lanes

Typical vessel speciíìcations

Typicaí length 200 m etres

Beam 26 m etres
D raught 7 m etres
Cap acity 4,000 lane-m etres
Ram p load 100 tonnes
Main engine 40,000kwh
Speed 19 knots on 90 tonnes fuel oil per day

78 Institute of Chartered Shipbrokers

 T h e Ship

V e ry large crude c a rrie r (VLC C )

fr

Typical vessel speciíìcations

Size 305-320,000dw t
Length 333 m etres
Beam 60 m etres
D raught 22.6 m etres
C arg o pumps 3 X S.OOOmVhour

C arg o pumps 3 X 5,000m Vhour

C arg o tanks 15
Slop tanks 2
Main engine 33 ,00 0kW h
Speed 15 knots

Introduction to Shipping 79
C h a p te r 5

Suezm ax ta n k e r

Double sides for vvater ballast

Typical vessel specifications

Size 155,000dw t
Length 288 m etres
Beam 50 m etres
Draught 20 m etres
C arg o capacity approx 1m barrels
C arg o tanks 10
Slop tanks 2
Main engine 20 ,00 0kW h

80 Institute of Chartered Shipbrokers

 T h e Ship

A fra m a x ta n k e r

Bridge
,--------- L J , Freefall Hose cranes
liíeboat Accommodation
\ / ■■■ port and starboard
■I ■ Slop tanks and I ^
■I I /pum p room
.......................
A,fter
peak
Starboard Port Engine No. 6 No. 5 No. 4 No. 3 No. 2 No. I
tanks tanks room cargo cargo cargo cargo cargo cargo
tank tank tank tank tank tank

V
' Double-bottom tanks

Double sides for vvater ballast

Typical vessel specifications

Size 95-120,000dw t
Length 250 m etres
Beam 44 m etres
Draught 14.6 m etres
Cargo tanks 12
Slop tanks 2
Cargo pumps 4

Ballast pumps 2
Main Engine l7 ,0 0 0 k W h

Introduction to Shipping 81
C h a p te r 5

M ediu m -rang e ta n k e r

Bridge Hose cranes

port and starboard
,---------L J ,
\
Freefall
liíeboat n ■I I
III /
I • ■*
Accommodation
Pump room and Fire monitor Walkway
/ slop tanks
It
After / Fore-
peak Engine
No, 6 No. 5 No. 4 No. 3 No. 2 No. I peak ,
Starboard Port room
cargo cargo cargo cargo cargo cargo
tanks tanks
tank tank tank tank tank tank

V V

' Double-bottom tanks

Double sides for water ballast

Port slop tank

Port tanks
Engine Fore-
room Starboard tanks p e ^

Starboard slop tank

Typical vessel specifications

Size 32-50,OOOdvvt
Length 189 m etres
Beam 32 m etres
Draught 13 m etres
Cargo tanks 12
Slop tanks 2
Cargo pumps 4
Main engine 9,000 kW h

82 Institute of Chartered Shipbrokers

 T h e Ship

Pressurised LPG large gas c arrier

Bridge
I— I
Accommodation □

o, ,o
\fter
beak
a I I I I .1 I I
LPGtank
I I I I I I
^ f
I I I I I l '~I T T
LPG tank Fore-;
peak/

() Engine
room

Double bottom

Typical vessel specifications

Size 4,800dw t
Length 93 m etres
Beam 17.6 m etres
Draught 4.2 m etres
Capacity 3,500m '

C arg o types Butane, butadine, propane, propylene.VCM

Introduction to Shipping 83
C h a p te r 5

LNG ship w ith Moss spherìcal ta n k design

Typical vessel speciíìcations

Size 66,500dw t
Length 290 m etres
Beam 42 m etres
Draught 10.7 m etres
Capacity 130,000m '
Cargo tanks 5 reírigerated tanks
Pumps 10 X 1,1 OOm^ (2 pumps per tank)
Main engine 30 ,000kW h

84 Institute of Chartered Shipbrokers

 T h e Ship

LNG w ith prism atìc ta n k desìgn

FRONTVIEW SIDEVIEVV

Engine Bridge AERIALVIEVV

Typical vessel specifications

Slze I0 0 -I3 0 ,0 0 0 d w t
Length 277-345 m etres
Beam 44-53 m etres
Draught 1 1.4-12 m etres
Capacity 140-260,OOOm'

Cargo tem perature down to -I66°c

Main engine 30,000kW h
Speed 19 knots

Introduction to Shipping 85
C h a p te r 5

86 Institute of Chartered Shipbrokers

Chapter 6

Dry Cargo Chartering

Pont Jacques Chaban-Delmas - Bordeơux

C h a p te r 6

6.1 IN T R O D U C T IO N
The sectors vvithin the shipping business are reíerred to as markets.This is because at some
stage there is the sort o f negotiation betvveen tw o parties that is characteristic o f a market.The
bulk trades especially are driven by the laws o f supply and demand internationally. Economists
refer to the chartering markets as periect competition.

Like the kind o f market one might fìnd in a country town, vvith its different stalls, the dry cargo
chartering markets are composed o f specialities such as grain, coal and iron ore.VVhere it differs
from the tow n market is the way that you will fìnd the same trades being worked in different
centres throughout the world, N o t only do they deal in the same trades but, such is the iníluence
o f international communication, the same prices o r rates apply worldw ide too.

A t one tim e the only significant marketplace fo r dry cargo chartering was London, vvhich came
about because the vvorlds largest merchant marine was íorm erly under the British flag.The
place where this all to o k place was the Baltic Exchange, in a Street called St Mary Axe, in the
heart o f the City o f London.

Some argue that the origins o f the ‘Baltic’ go back almost to the early part o f the 15th century
vvhen there was an active im port and e xp o rt trade betvveen Britain and the countries
surrounding the Baltic Sea. Until well past the middle o f the 20th century, the chartering o f dry
cargo ships to o k place on the trading ílo o r o f the Baltic, the business being conducted by w ord
o f mouth, vvhich is why the m otto o f the Baltic Exchange, in common w ith that o f the Institute
o f Chartered Shipbrokers, is ‘O u r W ord O u r Bond'.

Electronic communication has provided more practical international alternatives to face-to-

face negotiation, and chartering markets have been established in other cities such as N ew
York, Hong Kong, Hamburg, Oslo and Tokyo. Even so, London remains the most active o f all
the marketplaces.

- iS = ^ /

■£ì
Ũ
11' X Í|1 '
f ■
inl' ■'lỉb
Illl un
ii ií iiiỉ
1111 ■ : lll
iỉí í . iiỉi ..
k / -SBC.

-ÍỂ ÍS B S v *

The memorial w indow from the old Baltỉc Exchange, now on display at the National Maritime Museum,
Greenwich

88 Institute of Chartered Shipbrokers

 D ry Cargo C h arterin g

6.2 C H A R T E R IN G
The íormal contract between a shipovvner and the merchant seeking the use o f his ship, who
is known as the charterer, is called a charter party.The name is derived from the Latin charta
partita (divided document).This dates from the time when an agreement was drawn up on a
single sheet o f parchment and then torn in two, one portion fo r each o f the tw o parties. If they
had a disagreement, they had to bring the tw o halves together to attest that this was the original
agreement.

There is nothing new about chartering ships, fo r the earliest w ritten voyage charter is in the
British Museum and is dated A D 236. It contains all the basic elements o f a modern charter
party.There are tw o basic ways a ship can be chartered.

6 .2 .1 Voyage c h a rter
By this means the merchant charters the ship to carry an agreed quantity o f cargo from A to B.
Payment is by tneans o f íreight which is usually expressed in terms o f dollars pertonne, but may
sometimes be agreed as a lump sum, a total amount ratherthan an amount pertonne.

The actual level o f rate o f íreight will be reached by negotiation, the dominant íactor being the
strength o r weakness o f the market at the time.

Voyage charters may be fo r a single voyage o r can be several voyages o f the same ship on a
consecutive voyage basis. A variation o f this is to ship an agreed quantity o f cargo over a period
o f time.This is called a contract o f aííreightment. Such an agreement is o f beneíìt both to the
charterer, vvhose requirements will be covered fo rth e period in question, and fo rth e shipowner
w ho can employ whichever o f his ships is most conveniently placed rather than having to bring
the one ship back in ballast on each occasion. Contracts o f affreightment can be o f particular
benetìt to a pool o f shipovvners.

6.2.2 T im e c h a rter
In this instance the charterer hires the vessel fo r a period o f time and instead o f paying a rate
o f íreight per tonne, the charterer pays a hire rate per day, During this time the shipowner
still operates the ship and provides the crevv.The difference is that the charterer tells the ship
vvhere to go and what to do and pays fo r all the bunker fuel consumed as well as the expenses
incurred in entering and leaving ports, and in loading and discharging cargo.Thus the charterer
acts in many vvays as if it were the ow ner and is known as the disponent ovvner; vvhich is the
legal expression used fo r an entity that is 'deemed to be the ow ner but not actualiy the ovvner’.

All the terms o f a tim e charter have to be negotiated in just the same way as fo r a voyage
charter. The main items to be agreed are, o f course, the rate o f hire and the period o f the
charten which may be fo r a few months, fo r several years o r even fo r a single trip. In the latter
case, the job the ship carries out is very similar to a voyage charten going from place A to place
B, but it is paid at a rate o f hire per day rather than a rate o f íreight per tonne.The charterer
may opt ío rth is method o f chartering because although it will bearthe expense o f any risks o f
delays, it will have íar more ílexibility than is easily possible under a voyage charten

There is a type o f time charter where the shipovvner does not take any part in operating the
ship and does not supply the crew. It is called a bareboat charter or, in more legal terminology, a
demise charter. In these cases, the charterer really does act just as if it ovvned the ship and this
method o f chartering is resorted to only when a substantial hire period is required. Bareboat
chartering is perhaps more easily visualised if it is looked upon as a way o f íìnancing the
ownership o f vessels w ithout having to raise the Capital to buy them.

It may help to perceive these diííerent methods o f chartering ships if you think o f voyage charter
being like hiring a taxi for a single journey, a tim e charter like hiring a car with a driver by the day,
and bareboat chartering like renting a self-drive car fo r a period o f time.

Introduction to Shipping 89
C h a p te r 6

Chartering, as has been stressed already, is achieved by negotiation o f a commercial contract

betvveen charterer and ovvnenThis is usually conducted through the medium o f shipbrokers in a
completely free international market governed only by the lavvs o f supply and demand.There is
considerable íreedom o f choice as to what is included in a charter party.

Voyage charter party dated 9 June 1860

There are many Standard íorm s o f ch a rte r p arty (abbreviated to C/P), m any o f th em specitìc to
individual trades.

I. Scores o f private forms are used exclusively by individual charterers o r groups o f

charterers. Even th e Standard form s are rareiy used exactly as th e y are printed.Changes

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 D ry Cargo C h arterin g

are made to reílect special conditions applying to some voyages, and shippers and
charterers both have íavourite amendments that they preíer to incorporate into the
Standard form s.

2. Many o f the íorm s are very old. Even those shown as íairly recently established are in
many cases revisions o f Standard íorms originally compiled in the 19th century. A typical
example is the Americanised VVelsh coal charter party (Amwelsh), vvhich was derived
írom a VVelsh coal form . It was adopted by the Chamber o f Shipping o f the United
Kingdom in 1896.

Conservatism on the part o f owners and charterers íavours vvell-established íorms

even though they may need to be heavily amended to comply with modern conditions.
The value o f such trie d and trusted documents is that almost every part o f them has at
some tim e been tested in courts o f law.

3. Some íorm s fo r very speciíìc trades were devised by the charterers and will tend to be
biased in íavour o f them . Conversely, there are those that have been approved, adopted
o r actually compiled by the Baltic and International Maritime Council (BIMCO), an
ovvners' organisation, and these íorms naturally tend to íavour the shipovvner Bias can
always be corrected by negotiation and amendment o f the vvording, but the extent
to vvhich this can be achieved in íavour o f one party o r the other depends upon the
strength o f the m arket at the time.

One o f the most w idely used tim e charter forms is Baltime, and is an example o f the box layout.

A n oth er extrem ely popular voyage charter íorrn, Gencon, is the form used fo r any trade fo r
which there is not a suitable o r acceptable Standard form.

Time charters require m ore details o f the ship, including the speed and consumption o f bunker
fuel, fo r which the charterer pays. Ovvners will demand the inclusion o f trading limits and the
exclusion o f certain types o f cargo.The place and tim e o f delivery and redelivery are im portant
to both parties, and, o f course, the period and rate o f hire are crucial.

In voyage charters, in addition to the obviously im portant items such as vvhere frotn and where
to, the cargo and the rate o f íreight, much attention is paid to time.

Pirst, there is the tim e when the ship has to present to load.Then there is the tim e allovved fo r
loading and discharging.The phrase 'time is money’ certainly applies to shipovvners, because tim e
spent in p o rt reduces the tim e available fo r sailing and tneans fewer cargoes can be carried in a
year Many w ords are thereíore devoted in voyage charters to laytime.This is the w ord used to
cover loading and discharging time. If a charterer takes longer than the agreed amount o f time
to load o r discharge, the charter will provide fo r a penalty called demurrage to be paid to the
ownen In several d ry cargo charters there is also provision ío rth e ch a rte re rto be rewarded by
a sort o f bonus fo r taking less than the agreed amount o f time.This is called despatch tnoney
and is usually based on half the am ount per day that was agreed fo r demurrage.

One o f the m ost im p ortan t clauses gives details o f how and when the notice o f readiness
(N O R ) is to be given. An N O R is a statement given by the ship, o r an agent acting on its behalí,
to the charterer advising that the ship is ready to start loading o r discharging. On the face
o f it this seems like quite a simple procedure, but it is complicated by events such as berth
congestion, obtaining clearance fo r the ship from p o rt authorities and confirmation from the
charterer that the condition o f the ship is acceptable. W o rk may be delayed by a whole host o f
other possible obstructions. Usually some tim e is also allovved to the charterer after receipt o f
the notice to arrange labour and equipment to w o rk the vessel.

Despite all the attem pts to make things clear as to when tim e starts to count and what periods
are excepted.there are m ore legal disputes over laytime than any other element in chartering.

Introduction to Shipping 91
C h a p te r 6

There are many abbreviations and acronyms used in chartering negotiations and many o f these
relate to laytime. Even these can be íurther complicated such as w ith SHEX, vvhich means that
Sundays and holidays are excepted - in other words, these are not counted againstthe number
o f days allovved for loading and discharging. But what if the charterer decides to continue
working during these excepted periods? To cover this eventuality One may íìnd the letters 'uu'
added aíter SHEX, which means 'unless used’. Ifth e market is in the charterers íavour, the added
letters may be ‘eiu’ meaning ‘even if used', vvhich would allovv the charterer to w o rk over the
vveekend vvithout any o f that tim e counting.The overtim e cost to the charterer might be more
than compensated fo r by the despatch money earned.

All voyage charter parties contain a clause that details w hat íorrm the bill o f lading should take
and how many are issued. A bill o f lading is one o f the most im portant documents that you will
come across in the shipping business. It is a document that carries iníorm ation about the cargo,
the terms on vvhich it is being carried and w ho is entitled to take possession o f the goods after
discharge.

In legal terms ít is a receipt fo r the goods, evidence o f a contract and a docum ent o f title.
This is easily remembered by the acronym RED. The last makes it just as valuable as the goods
themselves, since the holder can sell the goods while they are at sea merely by transíerring
the bill o f lading to the buyer.

Im portant as these are, all the íoregoing probably only accounts fo r half o f the total vvording o f
the charter party.The rest comprise clauses that cover either essential procedures o r provision
for unexpected eventualities.

Essential procedures include the name o f the party that is to arrange and pay fo r the cargo
handling o r that has the choice o f agents at the ports. Included under unexpected eventualíties
are wars, strikes and ice affecting navigation.There will also be a clause setting o u t the cancelling
procedure if the vessel is unable to arrive in time to begin the voyage.

O the r clauses provide protection for either party in case the o th e r side does something that
causes additional expense o r damage. Damage to the cargo is a com m on problem and the
parties can agree beíorehand what causes o f damage are exciuded o r included, M ost charter
party íorms also have a clause paramount that incorporates internationally agreed rules on
cargo carhage.These rules are eith e rth e Hague Rules o r th e Hague-Visby Rules. Although they
can apply to charter parties if speciíìcally included, they almost alvvays apply to liner cargoes.

An im portant clause from the ow ner’s point o f view is the lien clause, vvhich sets out
circumstances in which the ow ner can retain possession of, o r even seil.the cargo if the charterer
fails to pay íreight o r demurrage in due time.

6.3 C H A R T E R IN G N E G O T IA T IO N S
Like any other trading negotiations, chartering a ship begins w ith one side o r the o ther making
an offer; most írequently it is the shipovvner w ho opens the ‘bidding’.

Then will follow offers and counter-offers from each side until everything has been agreed,
the contract is coníìrmed and is reíerred to in the chartering vvorld as a íìxture. The tw o
sides usually come together through their respective brokers, although many shipovvners and
charterers use departments in their own companies as brokers.VVhere the o w ner o r charteren
reíerred to as the principal, uses independent brokers they may be exclusive brokers, which is
where the principal piaces its business on the market through only one broken O rth e y may use
competitive brokers, which is vvhere the principal spreads its business across many brokers, who
compete vvith each o th e rto be the first to bring acceptable business to the principal.

The negotiations are opened by One side making a firm ofíer; w hich vvill have a tim e limit. In
these days o f rapid communication this will only be a few hours, but good sense will ensure
there is enough tim e fo r the brokers to pass the ofíer to th e ir principal fo r consideration.The

92 Institute of Chartered Shipbrokers

 D ry Cargo C h artering

opening offer will inciude all the basic essentials, vvhich fo r a voyage charter would include:

the ships name and other details to identiíy it;

the cargo and the quantity;

loading and discharging ports;

rate o f íreight:

laydays and cancelling, Loading not to start beíore the first date and the charterers
having the option to cancel the charter if the ship does not present itselí beíore the
second date;

the rates o f loading and discharging, including a reíerence as to how time will count,
such as 12,000/9,000 SHEX, Most bulk cargoes today are chartered on a free in and out
(FIO) basis, that is, the charterer pays the cost o f loading and discharging, but in some
cases the ow n e r may be required to pay these costs in which case the amount per ton
will be stated here;

demurrage and despatch;

the charter party form to be used;

• the commissions payable to all the brokers involved.

Usuaily, in the early stages o f negotiations, the offers vvill State ‘otherAvise subject to details'.This
allovvs the parties to leave it until they are sure they are both seriously intent upon the business
before going into all the o th e rte rm s and conditions. Although im portant.they vvould not have a
m ajor effect upon the fìnancial aspects o f the charten

Q uite often ,th e brokers, when replying, may use an expression such as 'accept-except' and then
set o u t those items that th e ir principal seeks to alter. It is im portant to realise that a counter-
offer is really saying“ l decline your offer and I now make you the íollowing firm offer” . In other
words, the party making the first offer is under no obligation to continue with the negotiations
if the o th e r party fails to give a clean acceptance vvithin the speciíìed time, and this applies
throughout the negotiations until the tw o are able to agree when they will be abie to say “That’s
a fixture".

Deal done!

N o te thdt there is a íundamental difference betvveen English and us law on the m atter o f
subịect details. U nder English law, if the details could not be agreed upon, there is no contract.

Introduction to Shipping 93
C h a p te r 6

But under u s law, if the o the r party accepted the offer made subịect to detail, then there is a
binding contract and the parties are obliged to continue to w o rk o u t the details.

Once the negotiations seem serious,the charterers broker will spell o u t all the details.These may
be numerous, because even th e m ost recently devised Standard c h a rte r p a rty fo rm s undergo
many deletions and additions to the printed te x t and include a page o r so o f typed additionai
clauses to coverthe parties' speciíic requirements.

The same routine would be íollovved in the case o f a tim e charten but the content o f the firm
ofíer vvould be rather diíĩerent. O ne vvould expect to see:

ships name and o th er identiíying details;

other details o f the ship including total deadvveight, grain and bale cubic capacities,
number o f decks, num ber o f holds and hatches, and the num ber and capacities o f cranes;

period, such as five to seven months o r tw o to three years;

rate o f hire, stating w hether it is to be paid m onthly o r semi-monthly, but alvvays in

advance;

where the ship is to be delivered to the charterer; often an exact place, and where to be
redelivered to the ovvnenThis is often a range o f ports:

delivery dates; as in a voyage charten this will State not beíore a certain date and the
charterers option to cancel if laterthan a certain date;

the ships speed and daily fuel consumption expressed as so many knots on so many
tonnes o f vvhatever type o f fuel the ship uses;

the charter party form to be used;

the total commissions.

6.3.1 Voyage c h a rte r o r tím e charter?

Many íactors iníluence a charterers decision as to vvhether to charter on a voyage basis o r
to take a ship on tim e charten Voyage charter gives the charterer afixed price per tonne o f
matenal and passes almost all the risks - especially risks o f deiays caused by bad weather,
strikes and o th e r unexpected risks - o n to th e shoulders o f th e shipow ner.T he c h a rte re r does,
hovvever, have to pay fo r the privilege o f being risk-free.

Time charter gives the charterer considerable ílexibility as to vvhere to send the ship and is
spared the problems o f demurrage.Time charter does, hovvever, mean that if bad weather delays
the ship o r if vvorkers in a chosen p o rt go on strike, the daily rate o f hire still has to be paid.
Incidentaily, if the delay is caused through the ship breaking dow n then hire is not payable; the
ship goes off-hire. As the charterer assumes many o f the ow ner’s risks and costs, the equivalent
am ount paid to the ovvner per tonne o f cargo carried is less than fo r a voyage contract.

If the charterer has a single com m odity from one o r a limited num ber o f loading places to go
to a single destinaticn o r a limited num ber c f discharging places, and if the rates o f loading and
discharging are well-established,then voyage charter is the obvious choice.

If, howevei'; the charterer has many com m odities from and to a variety o f places so complex
that it vvould be diíĩìcult, if not impossible, to include them all in a voyage charten then tim e
charter is a better idea.This is typified by tim e charter on a trip basis, vvhere you could well
see the business being quoted 'D elivery Kobe, trip across Far East-West Coast N o rth America
redelivery Los Angeles-Vancouver Range expected duration 90 days'.

Time chartering is often preíerred when a liner company seeks tem porarily to supplement
its own fleet to cope w ith a seasonal increase in business. Container lines use it to cater for

94 Institute of Chartered Shipbrokers

 D ry Cargo C h a rte rìn g

th e ir íeeder business and there is a vvhole segment o f the market devoted to relatively small
Container ships to fìll the requirements o f the íeeder industry.

There are even speculators w h o think that they can trade ships more profitably than the ovvners
themselves and will take ships on tim e charter and then re-let them on a voyage basis, hoping
to make a substantial p ro fit betvveen the cost o f the tim e charter and the income from the
voyage charten

6.3.2 C h a rte rin g and th e in te rn e t

There is a lo t o f history attached to the way the chartering market vvorks and sometimes
it may seem that the process is unnecessarily complicated, particularly the use o f brokers as
intermediaries to bring to ge the r shipovvner and chartererThere have been several attempts to
break w ith tradition and use the internet as a platíorm fo r chartering whereby charterers and
owners both subscribe to a site w here details o f cargoes o r available ships can be matched and
contracts concluded O n lin e . So far, all attempts have íailed, although attempts to establish an
Online tra d in g p la tío rm are m ade regularly.

It is not hard to understand w hy internet sites fail. Buying and selling goods and services on
Standard term s o ve r th e in te rn e t is a vvell-established method, but each com bination o f ship,
cargo, port, charterer and shipow ner brings its ow n unique fìnal charter party outcom e and so
is not best suited to the internet business format.

A n o th e r reason w hy brokers are unlikely to be made redundant by the internet is the very
internationalism o f the shipping business. W ith owners and charterers likely to be several
thousand miles apart and perhaps unable to speak the same language, brokers w ho can
negotiate fo r them and conclude an agreement, vvhich might well be in a third language, are an
essential element.

Internet broking has n o t proved to be as attractive as IT enthusiasts anticipated, but electronic

Communications and email have made chartering much easien N o t only are Communications
fasten but also charter parties can be stored on com puters and edited as required rather than
having to be retyped each time.

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96 Institute of Chartered Shipbrokers

Chapter 7

Tanker Chartering

Howrah Bridge, River Hooghly - Kolkơtơ

C h a p te r 7

7.1 IN T R O D U C T IO N
Although oil has been used fo r many thousands o f years, its real commercial signiíìcance only
began to emerge during the second half o f the 19th century. It was in Pennsylvania, USA, that the
first well speciíically fo r oil was drilled in 1859.The chief interest at that time was in kerosene o r
paraffìn oil used fo r lighting. O th e r Products remaining after extracting kerosene from the crude
oil were simply burned in íurnaces and the lighter constituents, such as gasoline o r petrol, were
something o f a problem.The automobile did not come on the scene until almost the end o f that
century, but when internal combustion engines became more widely used, gasoline ceased to be
a surplus commodity.

Prospecting fo r oil proceeded at a rapid pace and fo r many decades, the USA dominated the
oil production m arket It became the largest consumer, the largest producer and the largest
importen Exploration fo r oil became an international enterprise.

Although the USA, the UK and the Netherlands retained their dominance in refining and
distributing Petroleum Products, by the I930s the development o f the vast oil deposits in the
Middle East ensured that the Arab countries would eventually dominate the oil supply market.
In 2 0 13, Middle East oil producers were pumping more oil than ever beíore.

7.2 D EV ELO PM EN T OF TA N K ER S A N D T H E T A N K E R
M ARKET
For many years, demand fo r oil was small enough that it could be m et by transporting it in metal
receptacles usually packed in wooden crates and reíerred to as 'case oir.The fìrst steamship
designed to carry oil in buik was built in 1886 and had a deadvveight capacity o f 2,300 tonnes.

Initially, oil retìning to o k place near the oil vvells, but írom the 1970s it became the norm to site oil
refineries closer to the place o f consumption, chiefly fo r political and economic considerations.
This protected reíìneries from the risk o f the oil-producing countries seizing these assets
from the foreign-owned oil companies. Refining oil as near as possible to the area o f greatest
consumption simpiifies the distribution o f many oil products either by smail specialist tankers,
trucks o r overland pipelines. The major advantage o f carrying oil in its crude State is that it
permits maximum economies o f scale in transportation terms.

In the 1940s, when reíìned oil was the main cargo, 15,000 tonnes capacity was large fo r a tanker
In the I950s, a normal-sized crude oil tanker was about 55,000dwt. By the mid- to Iate-I960s
almost all oi! reíining was taking place near the areas o f consumption and tankers carrying
200,000 tonnes were developed.These were called very large crude carriers (VLCCs).

In the I970s, the Suez Canal was closed and the size restrictions imposed by the canal
dimensions became irrelevant. Since there was no restriction on ship size,thei'e was an incentive
to maximise carrying capacity, vvhich resuited in ships o f around 350,000dwt becoming common.
These were the ultra-large crude carriers (ULCCs).

For many years the major oil companies owned vast íleets o f tankers so that they could move oii
around with complete ílexỉbilitỵ Some independent tanker ovvners v\/ere encouraged, because
the oil companies found it convenient to be able to supplement their own fleets from tim e to
time as demand rose and fell.

Oil companies later became anxious to reduce the sizes o f their ovvned fleets as these tied up
large amounts o f Capital. For them, the ideal situation would be to use voyage-chartered ships
with the íreight earned being roughly the same, whatever voyage was undertaken.

In the I960s, a scale calculation was developed from existing íormulae used by British and u s
government charterers.The fìrst o f these scaies was called INTASCALE.This was reíìned and in
1969, It was pubiished under the name it bears today, VVORLDSCALE, o r to give it its full title,
the N ew W orldwideTanker Nominal Preight Scale.

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VVorldscale is able to produce a íreight rate in dollars fo r almost every conceivable oil tanker
voyage.This amounts to some 60,000 voyage permutations. Each rate takes into consideration
the round voyage distance, p o rt costs and canal dues. Bunker costs are adjusted every year so
that, as far as is possible, the same income per day would be earned regardless o f the voyage
performed.This enables charterers to take ships on charter with wide loading and discharging
options, with both sides being content with vvhatever load and discharge ports are ĩinally
declared.

The rates are listed in the VVorldscale under the p o rt o f discharge showing the rate and the
distance o f the voyage in nautical miles, fo r example:

PHiư\DELPHIA
From $/tonne Miles

Banias 8.38 10,728

Bonny 8.28 10,364

Cinta 17.63 (C) 23,998 (C)

Cinta 15.94 (S) 20,838 (S)

N o te the diííerent rates via the Cape o f Good Hope (C) and via the Suez Canal (S).

O f course.the tanker market íluctuates as does any other chartering m arketThis is catered for
by chartering at VVorldscale followed by a percentage number.Thus VVorldscale 100 vvould be
the flat rate as in the scale,Worldscale 175 would mean 175% o f the ílat rate and Worldscale
75 vvould be 75% o f the flat rate. Market strength o r vveakness is not the only íactor to influence
the rate at vvhich a ship may be fixed.The scale is calculated using an arbitrary ship size, speed
and consumption as its basis, so fo r a ship that differs substantially from that basis, a different
percentage o f the flat rate will be negotiated,

The use ofW orldscale is not only convenient for chartering single voyages but is also very
convenient fo r the use o f contracts o f affreightment, which allovvs fo r a long-term comm itm ent
and gives the charterer almost all the ílexibility o f time charter with none o f the responsibilities
fo r delays and no sudden gaps in supply in case o f breakdovvn,

W ith oil companies no longer having large íleets o f their own, independent ovvners bear the
greater part o f the risks and beneíits o f tanker ownership. T h e / have their own dedicated
international association, Intertanko. The International Association o f Independent Tanker
Ovvners gives them a uniíied voice in the industry.

Independence is by no means coníined to tanker ovvning. Reíerence has already been made to
multinational oil companies o r oil majors - some o f the best knovvn are ExxonMobil, BP Am oco
and Royal Dutch Shell.There are also many smaller oil companies, some state-ovvned and some
in the private sectorThese operations are reluctant to be dependent upon the majors fo r
th eir supplies o f crude oil o r refined products.Their needs have encouraged the emergence o f
independent oil traders w ho buy oil and charter ships in their own names and sell the cargo to
whichever oil company will pay the best price. Inevitably, there is now a thriving oil market, the
dominant centre being in Rotterdam.The stage has now been reached where the oil traders
form an im portant segment o f the tanker chartering market.

7.3 TYPES OF T A N K E R

7.3.1 C rude c arrier

Most reíerence so far in this chapter has been to those tankers designed to carry crude oil.
Crude is the oil just as it comes out o f the ground and is a complex mixture. A t one end o f
the scale, it is a heavy, dark-coloured substance that is virtually solid at ambient temperature,

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and at the other, it can comprise highly volatile gases. Between these tw o extremes is the liquid
from which, when it has undergone a series o f refining processes, various grades o f Petroleum
are produced. These include gasoline o r petrol, kerosene o r paraffin, diesel oil and fuel oil.
Additionally, the reíìning process produces a large number o f liquid chemicals with a host o f
uses from specialised solvents to the raw material from which plastics are made. Crude oils
vary considerably depending on their origins. Some, like those from parts o f South Am erica and
Africa, are so thick and heavy that if allowed to cool they become aimost solid. On the o ther
hand, crude oil from the offshore vvells in the N o rth Sea is lighter in colour and freely pourable
at normal temperatures.

Crude oil is transported in the largest ships in the tanker group.

Typical crude carner

VLCCs and ULCCs are relatively simple in their design.There is no requirement to take eiaborate
precautions against cargo contamination, so their division into a series o f tanks is more fo r
structural strength than fo r segregation.The fact that these separations do exist naturally makes
It possìble fo r more than one discharging p o rt to be served if necessary.

Even though the construction o f crude carriers is straightíor^vard, they still include a fair am ount
o f complex machinery and instrumentation.Their cargo pumps have to be able to empty the
entire ship in no more than tw o days. Each tank needs to have its own set o f pipelines w ith
accompanying svstems o f valves and instruments to allovv the nght cornbination o f tanl<s to be
selected.They incorporate a means o f getting heavy residues away from the sides o f the tanks
vvhen discharging. Usually this is achieved by a system known as crude oii vvashing (C O W ),
vvhich comprises devices somewhat iike huge lawn sprinkiers that spray oil from the ships own
cargo around the insides o f the tanks to wash the residues down towards the pump intakes.

Many types o f crude oil are extremely viscous. Therefore some crude carriers are equipped
with heating coils, a system o f pipes in the tanks through vvhich steam may be pumped to keep
the oíl at pourable temperatures.

A nother set o f pipes comprises the inert gas systetn. Reíerence was made earlier to the fact
that one component o f crude oil is a volatile gas at normal temperatures. W hen blended w ith

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airithis gas produces a highly explosive mixture.To prevent air reaching it, the empty area above
the level o f the oil in the tanks is covered with a blanket o f inert gas. Most o f the gas is made
up o f scrubbed exhaust gases from the main engine, but most ships also have an inert gas
generator fo r back-up.

As crude oil carriers invariably have to ballast to their loading ports, an eííìcient system o f ballast
tanks is also essential to enable this leg o f the voyage to be carried out saíely, In the early days
o f tankers, ballast vvater was simply run into the cargo tanks, but this caused pollution o f the sea
when pumped out in preparation fo r loading.Thereíore tankers now have segregated ballast
tanks.The double-hull void spaces are utilised ío rth is purpose.

7.3.2 Product carrier

Seaborne petroieum Products are divided into tw o categories, clean and dirty. Clean includes
the lighter spirits and oils such as gasoline, kerosene, gasoil and diesel oil. D irty covers the
heavier oils such as the diiĩerent types o f fuel oil, especially the so-called residual oils, which are
n o w th e main ty p e o f b u n k e r fuel fo r ships. In c h a rte rin g íìx tu re re p o rts th e expression 'd irty '
also covers crude oil.

Tankers carrying clean products have to be meticulous about cleanliness and cargo segregation
because their cargoes are not íurth e r reíìned after discharge, Contamination vvould cause
serious problems. Heavy fuel oils are not so sensitive, but even so they have to arrive in a
satisíactory condition fo r immediate use.

Product carriers for clean cargoes are usually in the 60,000dwt range, although some cargo
sizes reach 75,000 tonnes o r more. D irty product carriers can be any capacity, even up to
VLCC size.

7.3.3 Chem ical c arrier

Cleanliness and íreedom from contamination in the chemical trade is param ount Purthermore,
some o f the chemicals are so corrosive that the tanks have to be coated so that the cargo
cannot make any contact at all w ith bare metal. Coatings vary vvidely depending upon the
intended cargoes. The most sophisticated chemical carriers have tanks, pipelines and cargo
pumps constructed o f stainless Steel.

7.3.4 Parcel ta n k e r
This is a specialised type o f chemical carrier incorporating a high degree o f segregation. Each
tank not only has its own pipeline system but also its own pumps.These tankers are almost the
liners o f the tankertrade as they are able to load several different parcels fo r diííerent shippers.
In this way, smallish quantities o f chemicals can be shipped. Individually, these parcels would be
insuffìcient to comprise a full cargo fo r even the smallest tankerThe specialist knovvledge o f the
operators o f parcel tankers and that o f their seaíarers has to be o f the highest order

7.3.5 Gas m arkets

Two distinct types o f gas are regularly carried in ships as liquids.The íìrst is liquetìed natural gas
(LNG), which is methane and is in the íorm o f gas when it comes out o f the ground.This has to
be carried in insulated tanks with a very powerful reírigerating system to keep it in liquid fornn.
LNG is the gas that is piped to íactories and homes.

The other type is liqueíìed Petroleum gas (LPG), and as mentioned earlier is mainly propane
and butane.These gases are by-products o f oil reíining.They require only a modest amount o f
cooling but have to be kept under pressure to remain in a liquid State. These gases are used

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vvhere fixed connections are not usually available such as remote íacilities, houses and caravans,
and fo r cigarette lighters and camping stoves.

The gas markets are very closely connected to the crude oil trades since natural gas is found
in the same sort o f locations as crude oil and LPG is a by-product o f the reíìning process. Most
o fth e gas supplies are controlled by major energy companies and, since the gas ships are highly
specialised and hugely expensive to build.they are not oíten built speculatively.

LNG particularly is considered a very clean fuel, because it produces only w ater vapour and
carbon dioxide when burned rather than the more harmíul acidic pollutants produced by
burning oil, Demand is grovving fo r LNG as a fuel fo r pow er stations to produce electricity, for
direct burning to supply heat and hot vvater, and lately, as a fuel fo r vehicles and ships themselves.

A new LNG hub is being built in Singapore. As a consequence, there will be an increase in the
number o f LNG ships and a growing spot market fo r them, which in the future may encourage
speculative building.

LNG carner alongside in Rotterdam

The major reserves o f natural gas are located near crude oil reserves, but there are also many
places where it is possible to extract gas commercially, even though it wouid be uneconomic
to remove oil.This opens up the possibility to revisit some o f the w orked-out crude deposits.
Natural gas also occurs in piaces where crude oil has not yet been located.

There are gasíìelds in the N o rth Sea, the Mediterranean, N o rth Aírica, the Middle East, the
Caribbean, the us Guif, Canada, Alaska, Indonesia, Australia and W est Aírica. Recently, large
gas finds have been discovered offTanzania. Consumption tends to be in the nearest densely
populated area, with Europe and the USA being large importers. There is also an expanding
market in the Far East. Pressure is grovving to reduce dependence upon coal-fìred and nuclear-
powered eiectricity generation.

In the LPG chartering secton parties sometimes agree to popular oil company voyage charter
party íorrms. More oíten, the charter form used regularly fo r shipping LPG is the Asbatankvoy.
For LNG cargoes a special form, Shell LN G Tim e I , is used. LNG ships are alvvays fìxed on either
a tim e charter trip basis o r on a longer-term tim e chartenThis is because many older LNG
carriers burn cargo boil-off as fuel.

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Most gas ships are built fo r specific contracts. In 2005, Excelsior, the first o f a new type o f
LNG ship, was commissioned and has since been followed by several similar ships, with more
being considered. They are designated liquefied natural gas regasiíìcation vessels (LNGRVs).
Equipment is installed that regasifies the cargo at the discharge pointThe latter is not a p o rt but
an oííshore mooring where the ship is connected direct to a pipeline and becomes in effect the
terminal.This method does away with the need fo r terminals on shore, which are not popular
with the public because o f the perceived risk associated with them. As the ships provide the
initial pumping capacity, one ship has to be connected to the pipeline at all times.

7.3.6 o th e r iiquid cargoes

Oil and the chemicals derived from oii are not the only liquids to be carried in tankers. Non-oil
cargoes include chemicals such as phosphoric acid, sulphuric acid and liquid ammonia.There is
also a separate market in edible liquids including vegetable oils, molasses and even orange juice
and wine.

The ships may not follow the same design basics that apply to oil tankers.

7.4 TA N K E R C H A R T E R PARTIES
There are many elements in tanker charters that follow the same lines as dry cargo íorms,
but there are signiíicant differences.The tanker market has its own Standard forms that have
mostly been devised by oil companies. W e will go through the details o f a charter party (c/p),
but progress has started to overtake the paper document, and the use o f a c/p administration
clause is spreading.This is described at the end o f this chapter

In Shellvoy 6 version I . I voyage charter party, the preamble gives the names o f the parties.
This is sim ilarto other Standard íorms.The next clause/Description o f Vessel', introduces some
o f the im portant differences. Lines 18-19 re íe rto heating coils, mentioned earlier.The Shellvoy
íorm is designed fo r use with any type o f liquid cargo so that line 20 refers to tank coatings,
which would not be o f interest if the cargo was crude oil but vital if clean cargoes o r chemicals
are involved.

Tankers are fitted w ith cranes to lift the heavỵ loading and discharging hoses

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It is interesting to note that lines 44-5 I deal with the vessels obligation to comply vvith the
latest guidelines and to carry current publications covering best practice fo r certain im portant
operations.This sort o f requirement is rarely included in dry cargo charter parties.

It should be noted from lines 21-22 that even tankers need cranes, although they are used only
to handle the hoses required fo r cargo handling.

Lines 23-28 are im portant because they deal with the capacity o f the ships pumps. Remember
that the shore installation pumps the cargo in and the ship pumps it out.

If the ship is intended fo r loading clean products, its previous cargoes couid leave a smali amount
o f residue and some Products could be contaminated by the merest trace o f íoreign matten
Thus lines 29-33 deal with the ships last cargoes.

Crude oil washing (C O W ) and inert gas systems (IGS) are covered by lines 34 -3 8 .The crude
oil washing is covered in more detail in clause 20, lines 3 0 5 -3 15 o f Part II o f the charter party
(c/p) vvhich details the charterers right to call fo r C O W and its effect on laytime.

The wording then follows more o r less customary terms until line 85 where reíerence is made
to laytime. It should be noted that this does not deal in so many tonnes per day loading and so
many tonnes per day discharging, but simply says running hours, o r SHINC. It is almost alvvays
agreed that the total length o f time fo r loading and discharging is 72 hours regardless o f the size
o f the ship.The ships pumps are invariably designed to match the size o f the ship and shore
pumps alvvays have plenty o f spare capacity. Running hours, as the vvords imply, mean no breaks
fo r Sundays and holidays because oil installations by their very nature w o rk 24 hours a day and
almost every day o f the year:

Lines 86-87 deal with demurrage and it should be noted that tanker charters have no provision
fo r despatch money.

It is recommended that you read through the vvhole form in order to gain a general impression.
Most o f the clauses are not so diíĩerent from a dry cargo íorm .There is, however, a reíerence
to oil pollution, even though this is, despite a few highly publicised incidents, a very rare
occurrence.

O ld er versions o f the Shellvoy c/p contain reíerence to TOVALORThis is theTanker Ovvners

Voluntary Agreement concerning Liability for Oil Pollution. It was a fund to which most tanker
ovvners subscribed to ensure that there was always a huge sum o f money available to deai
w ith a major oil spill.This voluntary agreement is deíunct, as it was made obsolete by stricter
regulatory regimes.

Shellvoy 6 now contains the Shell ITOPF clause in lines 662-663, and reads:

‘O w ners vvarrant that throughout the duration o f this charter the vessel will be:

1. ovvned o r demise chartered by a member o f the International Tanker O w ners’ Pollution

Pederation Limited and

2. entered into the Protection and Indemnity Club stated in part I (A) I (xii).’

7.4.1 Civil liab ility and fund conventions

The international compensation regime ío r damage caused by spills o f persistent oil from
laden tankers was based initially on tw o IMO conventions. These are the 1969 International
Convention on Civil Liability fo r Oil Pollution Damage (1969 CLC) and the 1971 International
Convention on the Establishment o f an International Fund fo r Compensation fo r O il Pollution
Damage ( 19 7 1 Fund Convention).This was amended in 1992 by tw o protocols, which increased
the compensation limits and broadened the scope o f the originai conventions.

The 1969 CLC entered into ĩorce in 1975 and lays down the phnciple o f strict liability. This

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liability applies even in the absence o f fault fortankerow ners and creates a system oícom pulsory
liability Insurance. Claims for compensation for oil pollution damage, including clean-up costs,
may be brought against the ow ner o f the tanker that caused the damage o r against the owner’s
p&l insurer.Tanker owners are normally entitled to limit their liability to an amount that is linked
to the tonnage o f the tanker causing the pollution,

The 19 7 1 Fund Convention provided ío rth e payment o f supplementary compensation to those

who could not obtain full compensation fo r oil pollution damage under the 1969 CLC.The
International Oil Pollution Compensation Fund (1971 lOPC Fund) was set up ío rth e purpose
o f administering the regirne o f compensation created by the Fund Convention when it entered
into force in 1978. By becoming party to the 1971 Fund Convention, a country became a
member o f the 1971 lOPC Fund. Payments o f compensation and administrative expenses o f
the 19 7 1 lOPC Fund were íìnanced by contributions levied on companies in fund convention
countries that received crude oil and heavy fuel oil after sea transport.

in 1992, a diplomatic coníerence adopted tw o protocols amending the 1969 CLC and the
1971 Fund Convention, which became the l992 C LC and 1992 Fund Conventions.These 1992
conventions, which provide higher limits o f compensation and a vvider scope o f application
than the original conventions, entered into íorce on 30 May 1996. As in the case o f the original
conventions, the tanker ovvner and p&l insurer are liable fo r the payment o f compensation
under the 1992 CLC, and oil receivers in countries that are party to the 1992 Fund Convention
are liable fo r the payment o f supplementary compensation through the 1992 lOPC Fund.
Signatories to the 1992 Fund Convention were required to renounce the 1969 CLC and
19 7 1 Fund Convention at midnight on i 5 May 1998. As more countries ratiíy o r accede to
the 1992 conventions, the original conventions have rapidly lost signiíìcance and the 1971 Fund
Convention was terminated altogether on 24 May 2002.

In O ctober 2000, the contracting states to the 1992 CLC and 1992 Fund Convention approved
a proposal to increase by about 50% to about $260m, the amount o f compensation available
under the terms o f the conventions.This came into effect on I Novem ber 2003.

Some countries that have not ratiíìed the international compensation conventions have their
own domestic legislation fo r compensating those affected by oil spills from tankers. Some o f
these are highly specific, such as the Oil Pollution A ct o f 1990 in the USA, vvhereas other
countries rely on broader laws originally developed for other purposes.

7.5 N E G O T IA T IN G T H E C H A R T E R
Negotiation by means o f offer and counter-offer are similar to those fo r dry cargo w ith a few
im portant differences. Reíerence has already been made to the way the majority o f tanker
Ííxtures are conducted according to VVorldscale with the agreed percentage number being in
line with the strength o f the market at the time.

In almost all cases, there tends to be only one broker betvveen the charterer and the ovvner;
unlike the dry cargo market vvhere there is usually a charterers agent and an owner's broken

Negotiations in the tanker market tend to be far brisker than in dry cargo. Both the charterers
and the owners specialise in the oil business so that there are far fewer terms and conditions
about which to haggle. Also, as the single broker is probably dealing directly with decision-
makers on both sides.the time limits on offers and counter-offers can be very short.

Unlike dry cargo chartering, which was, until recently, a face-to-face type o f trading, tanker
chartering alvvays was, like all chartering now is, essentially desk-based. Tanker brokers have
always been specialists and they usually tend to coníine that specialisation to one segment o f
the market so that those working in crude oil w o rk separately írom those concentrating on
refined Petroleum products, and chemical brokers are separate again.

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7.6 C H A R TE R PARTY FORMS

Increasingly, there are fewer charter parties being drawn up and signed, o r 'executed' as the
industry puts it. A more modern procedure involves th e inclusion in negotiations o f what is
called a c/p administration clause.This mechanism allovvs the íìxture recapitulation (recap) to
be sent to both principals. If they contìrm that the terms are a fair reílection o f what has
been agreed, they approve this documentation and a charter party is not drawn up uniess
requested at a later date. There are exceptions to this process. Brazilian, Indian and South
Korean charterers generally insist on a properly executed hard copy charter party being
dravvn up.

As a íurther tw ist in this matten there are companies which electronically store these recaps.
W hen the principals log on to the vvebsite and approve what has been agreed, the docum ent
is watermarked as O RIG INAL and locked. From this data, a printed version can be produced
if required.

It has to be said here that this system, o f which there are a couple o f companies offering such a
Service, is used mainly in th e d ry cargo sector

VLCC Very Large C rude Cacner

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Chapter 8

LinerTrades

Sydrey harbour bridge

C h a p te r 8

8.1 IN T R O D U C T IO N
A liner is a ship that is employed in a Service between a p o rt o r a range o f ports and another
p o rt o r range o f ports. It does this w ith a regularity and frequency that coníorms to an advertised
schedule. In the main liner trades, this is based on a fixed day o f the week.This is in contrast to
a tramp, vvhich foliows no schedule and may trade among a wide variety o f ports according to
the market at the time.

A liner is a common carrienThis means that any shipper may have their cargo carried so long as
they are prepared to pay the rate quoted and abide by the iiner operators terms and conditions.
This is in contrast to a tramp, vvhich is a private carrier, as the cargo carried under a charter
is individually negotìated and an agreement signed. In the USA and elsewhere, the expression
‘common carrier’ has a strict legal deíinition.

Whereas a tram p usually carries raw materials, very often in bulk, a liner almost always carries
manuíactured goods, very often in small consignments. A tram p generally carries the goods fo r
one shippen vvhereas a líner carries the goods o f several, often numerous, shippers; it is for this
reason that goods carried by liners are reíerred to as general cargo.

Because a line carries many consignments the contract o f carriage is not the subject o f individual
negotiation and the shipper has to accept the line’s Standard conditions o f carriage.These are
set out in what is the most im portant document in liner business, the bill o f lading, vvhich among
other íunctions is the evidence o f a contract.

líth e lack o f a formal contract signed by both parties is diffìcult to grasp, think o f the Service as
a bus journey.The issue o f a ticket in exchange fo r the fare and the passengers acceptance o f
that ticket is evidence o f a contract between the bus company and the passenger.This is aiways
subịect to the bus companys terms and conditions. In the same way, a bili o f lading is evidence o f
a contract betvveen the carrying line and the shipper and it is rare indeed to alter by negotiation
any o f the other terms and conditions o f carríage laid down by the liner operator.This IS quite
dissimilar from chartering vvhere almost anything can be negotiated.

The íreight paid by the shipper fo r liner transportation is called liner terms.These include the
fuil cost o f loading the cargo from the quay and discharging it to the quay at its destination.
This does not include the charges, which are usually cailed terminai handling charges, for
handling the Container into and o u t o f the Container terminal. W ith liner contracts there are
no complex time-counting provisions and no demurrage o r despatch. There is the exception
that demurrage will become payabie if a Container is delayed beyond the stipulated tim e by the
shipper o r consignee.

8.2 A BRIEF H IS T O R Y OF LINERS

Regular lines became possibie in the second half o f the 19th century when steam propulsion
enabled shipowners to predict voyage times with some accuracy. Ships were no longer totally
dependent on the wind and were less likely to be at risk from adverse vveather

Passenger shipping was the íìrst s e c to rto benefit from this improvement in reliabiiity.The line
operators competed to provide com íort and luxury in the ships' accommodation. European
counthes needed more reliable links w ith their colonial outposts so iiner companies deveioped
regular services fo r passengers, mail and cargo.As trades evoíved, the lines developed separate
services fo r cargo so that the passenger liners could concentrate on oíĩering fast passage times
fo r mail services.

Passenger-carrying continued to be im portant into the middle o f the 20th century when air
transport to o k over this traííìc. Passenger-carrying today is largely coníìned to ferry services and
to cruise ships, vvhich continue the tradition o f providing com íort and luxury, although fo r leisure
travel ratherthan point-to-point transport.

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8.3 C O N T A IN E R IS A T IO N
The next development in the carriage o f goods by sea was truly revolutionary. Cargo liners
had steadily improved in their speed and efficiency and matched the demands o f increasing
international trade. Purther improvements vvere hampered by the fact that general cargo came
in all shapes and sizes, from massive crates o f machinery to drums, bales, bags and cartons.
There were thousands o f separate consignments per saiiing. Ail had to be stovved by hand.
Extraordinary skill was needed to ensure that the different consignments did not damage each
other and were carried saíely, even in heavy weather.There was no scope fo r any economies
o f scale because larger ships had to spend even longer in port.The cost o f building íaster ships
would be lost, because the tim e in p o rt could not be improved.

An attem pt was made to improve matters by unitising cargo, which was putting all cargo on to
pallets o r placing ‘skids’ under heavy crates and cases.This process to o k place before the ship
arrived, and a rebate was offered to shippers that delivered their cargo already on pallets o r
skids. Palleted cargo could be handled by fork-lift trucks and even loaded into the ship through
side ports accessed via ramps on the shore. Unitisation raised productivity in the docks from 1.7
tonnes per m a n-hourto 4.5 tonnes per man-houn

The Container revolution transíormed cargo liner shipping from the latter half o f the 1960s.The
introduction o f containers boosted productivity in the docks to 30 tonnes per man-hour and
subsequently much more. Shipowners now measured p o rt stays in hours and minutes rather
than days and vveeks.

Containerisation began in the United States o f America, where the íìrst experiments to o k
place in 1956. A year laten a Container Service began operating across the N o rth Atlantic and
international discussions on standardising the dimensions o f containers to o k place.

Containers being discharged from a small C o n t a in e r ship

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8.3.1 The Container

The first international standards were for a 'box' measuring 8ft wide, 8ft 6in high and lengths o f
IOft, 20ft, 30ft and 40ft.The IOft and 30ft versions vvere never very much in demand and the
20ft size was most popular in the early days, which is why the 20ft equivalent unit (teu) became
the unit o f reíerence. A 40ft unit IS measured as 2teu. O ther Standard sizes were later agreed
but are generally in only limited use. In Europe.there is grovving use o f the 45ft pallet-wide box,
and ship designs are increasingly being produced to accommodate it. In the USA, most land
transport is done using 48ft and 53ft box lengths and at least one shipping line has proposed
ships designed to accept these boxes on the Pacific trades to the us W est Coast ports.

O ther items vvere included in the standardisation, including the security o f doors. The most
im portant Standard is the corner casting. By means o f three oval holes on each corner o f the
Container, Standard ised liíting, lashing and securing were established.This allovvs containers to be
handled speedily anyvvhere in the world.

Panamax C o n t a in e r ship berthing

Quite early in the containers history it went beyond simply being a box. Anything that could be
fitte d w ithin those eight c o rn e r castings set at th e Standard dim ensions was capable o f carriage
as a Container. In addition to the general-purpose Container, which is a sealed airtight and
w atertigh t box, th e re is also the ventilated Container, which is ideal fo r cargoes such as cofíee
beans that are still alive and require a through-flow o f ainThe ventilation ducts can be closed
when used fo r cargo that does not need it.The insulated porthole Container has all surTaces
insulated and is used fo r cargo that has to be kept at a constant tem perature.The reírigerated
Container, cornmoniy called a reeíer Container, has its own reírigeration unit and can be set to
sub-zero temperatures if necessary. It dravvs its electrical povver from the ship, from w hat are
knovvn as reeíer plugs.

For pieces o f cargo that are to o heavy to be loaded horizontally by fork-lift and can only be
handled by crane, there is the open-top Container; which may have a removable tarpaulin
providing a soft to p (or tilt cover) o r a Steel ro o f giving a hard top. For more awkward shapes
and sizes, there is the flat rack, vvhile fo r really large items several simple platíorms can be used
side by side.

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Bulk cargoes are not ignored, as there is the dry bulk Container; which incorporates openings
in the to p through which the cargo can be poured, which is ideal fo r malt, fo r example.Tank
containers may be dedicated to speciilc liquids such as chemicals o r foodstuffs.

The great beneíìt o f containerisation is that it reduces p o rt tim e to a minimum, allowing liner
operators to reap the same benefìts from economies o f scale as bulk carrier and tanker owners
had long enjoyed. Beyond this, it stimulated intermodalism.The Standard sizes, lilting and securing
systems o f containers perm itted containers to be carried w ith ease on railvvay wagons and road
vehicles.This opened the way fo r door-to-door íreight services.

8.3.2 C ontainer progress

The real revolution began in the late I960s when a consortium o f the lines operating between
Europe and Australia íormed Overseas Container Lines (OCL) and to o k delivery o f six
29,000dwt vessels. Each was initially capable o f carrying 1,250 20ft equivaient units (teus) - a
capacity equivalent to four o r fìve conventional general cargo ships.

The Australian Service was soon followed by the Europe-Far East services, by which tim e
shippers were opting fo r containers rather than having to be persuaded to accept them. All the
major routes eventually became containerised and in no more than three decades, the vvorlds
general cargo trade shifted from conventional methods to the point vvhere 90% o f cargo is
containerised and Container ships o f m ore than 18,000teu are trading.

More than 70% - and on some services, nearer 90% - o f cargo is presented to the line as full
Container load (FCL). Shippers with smaller consignments can present them to the line as less
than Container load (LCL).The line consolidates LCL consignments into containers fo r the lines
convenience. In the early years o f containerisation, enterprising íreight íorAA/arders offered their
services to shippers o f LCL consignments, charging them rather more attractive rates than the
line's minimum íreightThese forwarders Consolidated the shipments into containers that they
then presented to the line as PCLs.Their profit came from the difFerence between what they
paid the line fo rth e FCL and the aggregate o f what they charged the various shippers.

It was from these tentative beginnings that a vvhole new branch o f shipping entrepreneurs
evolved.These are the non-vessel-operating carriers (NVOCs) that take the role o f the actual
carrier but do not operate their own ships. In the USA, these are reíerred to as NVOCCs,
with the extra c standing fo r 'common'. Under u s law these operators are considered
common carriers.

Today, NVOCs specialise in house-to-house services on a w orldw ide basis.They provide a value-
added Service to merchants as part o fto d a ys global market. Some now handle more FCL units
than quite im portant shipping lines.They buy space, reíerred to as slots, in bulk and retail them
on a supply Chain management basis. Although most still offer a Service to FCL shippers at rates
less than the lines themselves, some NVOCs no longer handle LCL business at all.

Containers and the intermodalism that they have established are so íundamental to modern
trading in manuíactured goods that it seems inconceivable that anything could hinder continuing
productivity increases.

There are some clouds on the horizon, however.The Container is becoming the most popular
method fo r smuggling everything from tax-avoiding cigarettes, alcohol and endangered species
to vveapons and illegal immigrants. These misuses o f the Container trade, particularly the
fear that they could be used by terrorists to im port weapons o f mass destruction (W M D ),
prompted moves by the USA to insist on much more rigorous security checks. To this end,
some countries allow oíTicials from u s Customs and Border Protection to screen and inspect
cargo in containers at their ports.

In 2007 the USA passed a law requiring all US-bound containers to be scanned fo r W M D
beíore entering u s territory. The 100% scanning rule was meant to have come into efĩect by

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2012, but has been pushed back because the scanning equipment and other security devices
are still under development and many ports do not have the means o r the space to put the us
edict into effect.

8.4 CONPERENCES A N D PR EIG H T TARIFFS

Liner coníerences were price-fixing cartels. In the long-distance trades they had a Virtual
monopoly, vvhich they reiníorced by giving rebates to shippers that were loyal to the coníerence
lines but cancelling such payments if a shipper dared to ship even the smallest quantity in a non-
coníerence ship.This stiíling o f competition was the subject o f several offìcial inquiries. In the UK
alone the government staged such investigations in 1909, 1923 and 1970, but on every occasion
it was agreed that the advantage o f coníerences to merchants outweighed their disadvantages
and they should not be outlawed.

The United Nations, on behalí o f the world's developing countries, introduced a Code o f
Conduct fo r Liner Coníerences.This was not so much to limit price-íìxing but to ensure that the
new shipping lines o f the less developed countries would be able to secure a fair share o f the
cargo market.

By the tim e the U N code was adopted at an international convention in 1982, containerisation
had so altered the liner market that the coníerences no longer enjoyed dominance in any trade,
vvhich removed much o f the need fo r the code.

Conferences still exist in many trades and although they cannot exercise anything like their
íorm er povven they still strive to bring some order into liner routes.Their activities are constantly
under scrutiny by such anti-cartel regulatory bodies as the Pederal Maritime Commission in the
USA and the European Commission's Directorate for Competition.

Tariíĩs are stiil produced and regularly updated, but in most trades a large measure o f negotiation
o f íreight rates is quite normal. These tend to be on a per box basis irrespective o f the
commodity shipped.

8.4. i Liner consortìum agreem ents

Providing shippers with the írequency o f sailings they require in a particular trade remains a
problem. Many lines cannot aíĩord a large enough fleet to offer a saiiing on the same day every
week.The solution these lines have íound is to form joint services so that each line provides an
agreed number o f ships and then has a proportion o f slots in every sailing regardless o f whose
ship it happens to be.There are cases vvhere some consortium members may not contribute
a vessel but as members still take a share o f the slots availabie on each ship.These consortia
emerge and disband according to the changes in the strength o f the lines involved.The principle
is now an integral part o f Container services.

8.4.2 Alliances
Consortia were originally íorrned by a group o f lines operating in a particular trade such as
Europe to the Far East. Lines in that grouping might join vvith a diíĩerent set o f partners in, say,
the Europe to USA trade.This led to the íormation o f alliances where groups o f lines come
together on all three o f the w o rld ’s major trade routes, USA-Europe, Europe-Far East and Far
East-USA to provide an integral Service. Since the crisis o f 2009 the liner industry has been
under íìnancial pressure, whiie at the same tim e there is pressure to invest in ever larger ships in
o rd e rto reduce unit costs and improve the industrys environmental períormance.

W ith no sign o f íurther signiíìcant mergers o r acquisitions happening, continued development o f

co-operation betvveen liner companies is increasingly im portant as the only means available to
achieve íurther scale economies and reduce costs.

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8.4.3 Protile of a typicai m ajor lin er o p e ra to r

Todays liner operator is likely to involve the following elements:

(a) membership o f a consortium, alliance and possibly a coníerence;

(b) fìxed-day sailings;

(c) a netvvork o f its ow n oíTices a nd /o r agents supplying Service to custom ers w ith intense
publicity and sales activity:

(d) engagement in major east-west trade(s) with subsidiary trades either direct o r through
íeeder services north-south;

(e) inland and distribution operations by railway, road o r barge so as to provide a full door-
to -d o o r Service.

8.5 L IN E R D O C U M E N T A T IO N
The m ost im portant document concerned with cargo in liner shipping is the bill o f lading (b/l). A
b/l comprises the íront, which has a series o f blank sections to be completed in accordance with
the shipment in question. O n the reverse is a mass o f small print that gives details o f the terms
and conditions o f the contract o f carriage.The shipper supplies the line o r its agent with all the
cargo details when the booking is made in the form o f shipping instructions.This iníormation
is usually stored on a Computer and can be incorporated into the b/l at the touch o f a button.

O th e r im portant documents are: waybills, booking notes, shipping notes, mates receipts,
manifests, packing lists, hazardous lists and indemnity letters. The impact that electronic
documentation has had on the liner business is also highly relevant.

8.5.1 T h e th re e functìons of a bíll of lading

It is vital to fix in one's mind that a b/l has three functions. It may help to think o f a b/l as being
RED. It is:

1. receipt for cargo;

2. evidence o f contract;

3. document o f title.

In a typical combined transport bill o f lading, the name differentiates it from the type o f b/l that
is used fo r break-bulk cargo (although the latter is seldom encountered today because o f the
predominance o f containerisation). It stresses the fact that this b/l can cover the transport o f the
cargo from shippers location to the consignees premises.This may involve road o r rail transport
beíore o r aíter the ocean voyage. It may also include shipment in a íeeder vessel beíore or
after the ocean voyage.The im portant íact with a combined transport b/l is that the carriers
responsibility covers all the diíĩerent modes o f transport that may be involved even though
some o f these may be provided by sub-contractors.

8.5.2 Receipt fo r cargo

The b/l's role as a receipt for cargo is easy to see because it identifies the shipper and the
consignor. It shovvs the name o f the receiver o r consignee. It states where the cargo is íìrst
received into the carriers custody, the actual p o rt o f loading, vvhere it is to be discharged and
the íìnal destination. Then there is a large amount o f blank space in vvhich to describe the
cargo.

Belovv aii this is space for the signature on behalí o f the master o f the ship. Above that space is
a vital rem ark:‘Received by the carrier from the shipper in apparent good order and condition.’
It goes on to incorporate the term s printed on the back o f the form. A combined transport b/l

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C h a p te r 8

is issued when the goods are received by the carnenThis will often be at some inland point and
only later will the goods be shipped on board the vessel. But as will be seen laten contracts for
the sale o f goods often require the shipper to prove that the consignment has actually started
the journey to the buyerThis requires the b/l to give the actual date o f shipment, and in such
cases.the b/l is endorsed ‘Shipped on Board'with the date that occurred. Shipped on board b/ls
will also be issued for any goods that are received by the iine at the p o rt o f shipment.

The b/i’s function as a receipt for cargo is, thereíore, twofoid. It covers the quantity and the
condition o f the cargo and the consignees have the right to demand that they receive the same
quantity in the same condition as it was when loaded.

W ith a full Container load (FCL) that has been stuffed by the shipper; the description o f the
cargo will have the qualiíying words ‘said to contain'. This tells the parties involved that the
condition and quantity o f the goods are outside the ships control provided the exterior o f
the Container is in good shape. In the case o f less than Container load (LCL) cargo, where the
Container was stuffed by the line, the receipt as to condition and quantity are the same as for
conventional cargo, namely, the actual number and type o f packages.

The expression fo r loading the goods into the Container is 'stuíĩìng', which distinguishes it from
'loading'. The form er is íìlling the Container; the latter reíers to loading the Container on to
the ship.

The long-distance carriage o f containers by road is expensive

8.5.3 Evìdence of a contract

On the reverse side o f the b/l,there are many speciai clauses. A t this stage it is suffìcient to note
that it comprises a mass o f small print detailing the terms under vvhich the goods are carried.

But the b/l is not the contract itselí It is not a document signed by both parties and in any case,
the b/l is not dravvn up until the custody o f the goods passes from shipper to carrienThe actual
contract, írequently no more than a simple verbaí agreement, was made when the cargo was
booked by the shipper w ith the line o r the lines agent.The b/l is the evidence o f that contract.

Very rarely will there be a vvritten contract fo r iiner cargo. If there is, it will be in the form o f
a booking note. Booking notes might be used when a contractor fo r a major overseas civil

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engineering project vvishes to arrange a íixed rate fo r all the materials involved rather than have
the uncertainty o f different rates fo r different materials, which is what vvould occur if the goods
were shipped normally.

8.5.4 D ocum ent of title

Title in this context is deíined as ‘the right to ovvnership o f property with o r vvithout possession',
and this third íunction o f a b/l is twofold.

'Right to ovvnership' simply means that vvhoever legally holds the b/l may claim the cargo. A
unique íeature o f carriage in a ship, unlike surĩace transport, is that once the cargo is shipped
and the ship is at sea, no one except the crew can get to the cargo.Therefore, if the b/l changes
hands lawfully, the right to ownership changes at that moment. In other words, the b/l is a
negotiable document.This permits the initial transfer o f ownership from the consignor to the
consignee. It also permits subsequent transíers o f ovvnership by handing over the b/l, suitably
endorsed, to the new buyer if they so vvish, the new buyers can reseil the cargo, and the reselling
can go on any number o f times while the ship is still at sea until the eventual buyer presents the
b/l to the line at the discharging p o rt and claims physical possession o f the goods.

It will be easily seen that the seller o f the b/l can delay passing the hght to ownership until
payment has been made so that the b/l’s other íunction as a document o f title is as security for
paymentThis role is almost indispensable to international traders.

Land transport o f containers bỵ rail

W hen an e xp o rte r sells to an overseas buyer, only rarely can the m atter o f payment be an
iníormal arrangement such as cash in advance o r cash on delivery. Overseas trade is seldom like
that and the problem is most often overcome by the system knovvn as a documentary credit
This is often reíerred to as a letter o f credit.

The buyen having agreed the price and other details with the selier, instructs his bank to arrange
fo r a letter o f credit to be made available at a bank in the shippers country.VVhen the cargo
is shipped, the line o r its agent gives a signed shipped b/l to the shipper.They take this to the

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C h a p te r 8

bank holding the letter o f credit along with all the other documents that have to accompany
the letter o f cre dit lf the bank is satisíìed that the documents comply exactly w ith the letter o f
cre d itth e shipper can collect payment ío rth e goods.

The bank in the shippers country has the b/l as security fo r payment and now passes it to the
buyers bankThe buyers bank holds the b/l as security until the buyer has paid. A t this point, the
buyer can either sell the cargo on o r present the b/l to the line o r its agent in order to claim
the cargo.

The bank involved only vvants the b/l as security; it does not want to have all the responsibilities
o f an actual consignee. W hen a documentary credit is involved, the box marked ‘consignee’ is
completed w ith the w ord 'order'. Once the shipper has endorsed it, this makes the b/l open.
The name o f the buyer o r its representative has been entered in the notiíy box.Thus the line
o r its agent knows w ho to contact, even though that party vvill not have title to the goods until
payment has been made to the bank and the b/l handed oven

lf the buyer does not have the money, the bank is obliged to become the consignee rather than
simply holding the b/l as security. On this rare occasion, the bank will dispose o f the goods at the
best price it can obtain.

8.5.5 Sea waybilis

By spending only hours in p o rt and sailing at high speeds, iiner shipping presents a new problem:
the cargo may arrive before the documents have íiltered through the banking system. It still
takes time to scrutinise the documents to avoid the risk o f fraud.

One vvay to overcome this is for the buyer and the seiler to agree to a different method o f
payment lf this is possible, and if the buyer has no intention o f selling the goods on vvhile the
ship is on passage, a negotiable document ís not necessary. In such circumstances, a sea vvaybill
can be used.A sea vvaybill is sim ilarto a b/l in almost. all respects except it is not negotiable. It is
not a document o f title, so it does not have to be presented at the discharging port.The line or
its agent simply has to satisty itselí that it has properly identiíìed the consignee and then hand
the cargo over

8.5.6 Electronic bills of lading

All Container lines now use sophìsticated Computer systems to handle the large volumes o f b/is,
vvaybilis, íreight invoices, maniíests and other documents needed. In most cases, this iníormation
is exchanged electronically between the line’s offìce and agents. Many liner ports have integrated
p o rt community systems that allow data to be shared among their members by means o f
electronic data interchange (EDI).The line o r its locai agent inputs the data concerning its im port
o r e xp o rt vessel and this can be accessed bỵ authorised p o rt users such as customs, terminai
operators and harbour masters.

Replacing the negotiable aspect o f the b/l electronically is the subịect o f a pilot scheme initiated
by the Bill o f Lading Electronic Registry Organization (BOLERO).The initiative IS being closely
vvatched by the industry and the banks.The number o f companies that have adopted BOLERO
electronic b/is is steadily increasing,

In 20 iO, a new electronic b/l system was established by Electronic Shipping Solutions (ESS)
u nderth e brand name CargoDocs Services. Use o f this system was pioneered in the oil sector
and is now spreading to the dry buik segment.

ESS’s system provides a simple and secure web-based interíace with a Central registry vvhere
key documents such as b/ls are stored in a secure environment.The ‘lite’ version allows masters
full access to documents and the ability to sign b/ls digitally and, where necessary, issue a letter
o f protest.

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8.6 B ILL OF L A D IN G TERM S A N D C O N D IT IO N S

On the reverse side o f a typical b/l there are clauses dealing with the carriers responsibility.
A lm ost all countries have adopted one o f three international conventions concerning the
carriage o f goods under a bili o f lading. Each country will have incorporated the convention
into its own law under a title such as Carriage o f Goods by Sea Act.These conventions, o r rules,
lay down the carriers obligations, including the extent to which the carriers liability fo r loss
o r damage can be limited. It is limited because the contract needs to State: This is where the
carriers Insurance policy stops, so this is vvhere the merchants Insurance policy should start.’

Such conventions also exist fo r the international carriage o f goods by road and by rail.The
responsibility clauses in a b/l explain that when combined transport is involved, the convention
coveringthe mode o f transport involved will apply.When it is not known where the problem
arose then the convention covering sea transport always applies.

The documents in the appendices that refer to this chapter are those devised and printed
by the Baltic and International Maritime Council (BIMCO). They are included as examples
only. Most regular lines have their own b/ls with their own house style in the to p right-hand
corner and th e ir own clauses on the back o f the form .W hile these may differ from line to line,
the íundamentals are similar because so many o f the clauses have to comply with whichever
international rules apply.

M u lt ip u r p o s e s h ip s a r e u s e íu l f o r c r o s s t r a d e s a n d r o ll- o n / r o ll- o f f c a r g o e s

8.6.1 D ifferences betw eeiì iin er and c h a rte r p a rty bills of lading
A bill o f lading has the same three essential elements vvhether it is a liner bill o f lading o r a
charter party bill o f lading.The major difference betvveen them is in their íunction as evidence
o f a contract.The liner bill contains the contract vvithin the vvritten clauses printed on the bill.
There are no other documents, except perhaps a íreight tariíT, that would be needed fo r a court
to decide w hat rights and responsibilities each party had under the contract. But a bill o f lading
issued under a charter party will contain a clause stating that it was issued in accordance with
the charter party and contained all the terms and conditions therein. So, in the case o f a dispute,
the tw o parties would also have to produce the charter party beíore the courts could come to
a decision.

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C h a p te r 8

Clearly, any party that buys goods covered by a liner bill o f lading while they are at sea and that
receives the bill o f lading in exchange fo r payment will be abie to see immediately what the
term s o f the contract are. But when the same transaction occurs under a voyage charten while
the bili o f lading may change hands, it is unlikely that the c/p will.The new ow ner o f the bill may
not be fully aware o f the terms o f the c/p.The law recognises this and, in some cases, extends
protection to the new ow ner o f the bill that was not available to the original holder because o f
some clause in the charter party itselí.

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Accounts

Tovver Bridge - London

C h a p te r 9

9.1 IN T R O D U C T IO N
The famous Greek shipowner Aristotle Onassis is once alleged to have said that ‘successíul
shipovvning was 95% careíul accounting’. Many prosperous shipowners have a background in
Tinance o r banking.

An enterprise that spends more than it earns will not survive.The exception is if it is subsidised
from public funds as a social Service.

W hether intended as a proíìtable business o r as a non-profìt-making undertaking, it is necessary

to produce records o f income and expenditure, commonly known as a set o f books. This
chapter seeks to provide an introduction into the basics o f accounting matters in a shipping
business context.

9.2 A C C O U N T IN G
Accounting is the complete package o f all the planning and managing o f the companys íinancial
affairs. Bookkeeping is a part o f accounting that:

1. provides a permanent record o f all mercantile transactions;

2. shovvs the effect o f each transaction and the combined effect o f all the transactions
upon the financial position o f the enterprise.

The rest o f the accounting process involves deciding which commercial activities will be
economically viable, what Capital items to purchase and how to raise money to purchase Capital
items.The accounts departm ent needs to ensure there is sufficient money to pay bills at the
correct time. Investing surplus money so that it earns interest when not needed fo r immediate
use is another im portant íunction. Anything that affects the financial position o f the company
comes under the heading o f accounts.

9.3 C A P IT A L
Capital in bookkeeping term s is the total vaiue o f ali the companys fixed assets, investments and
cash.Assets are divided into íixed assets and current assets.

Capital is the money required to start a commercial enterprise. M ore may be required from
time to tim e to maintaìn its momentum o r to increase the range o f its activities.

It is needed for tw o basic purposes: to purchase machinery o r equipment o r anything that will
become a íìxed asset such as a ship; and also to run the company.to pay wages, salaries and rent.
The latter is known as working Capital.

VVhatever it is used for, Capital has to be raised. One method is by letting other peopie become
part-owners o f the company. Capital may also be raised by borrow ing the money from a
bank o r other íinancial institution; this is oíten reíerred to as loan Capital. The borrovver has
to pay the lender interest at an agreed percentage per year in addition to repaying the loan in
agreed instalments.

Interest is the percentage o f the Capital sum that the borrovver pays the lender fo r the use
o f the money borrowed. Borrovving and lending are essential elements o f commercial life. A
company may find it has more cash than it needs fo r its immediate purposes. It will deposit this
with a bank so that it earns interest instead o f lying idle. O n another occasion, it may have a
tem porary shortage o f ready cash, vvhich will require a short-term loan from the bank known as
an overdratt. A vvell-managed company can usually negotiate a substantial overdraít íacility.

A speciai type o f borrovving, often used fo r buying large C a p it a l items such as houses and ships, is
by means o f a mortgage.This is the name o f the deed o r agreement signed by the ovvner o f the
ship. In exchange fo r the loan o f a substantial amount o f its cost, the shipowner pledges the ship
as security fo r the loan, lf the ow ner cannot meet the loan repayments and interest charges, the

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lender may íoreclose on the mortgage, allovving the le n d e rto take possession o f the ship. N ote
that it is the borrovver w ho gives the mortgage to the lenden so the borrow er (the shipowner
in this example) is called the mortgagor.The bank o r finance house that accepts the mortgage
becomes the mortgagee.

A ship, a building o r a piece o f m achinery is Capital and is classiíìed as a fixed asset. Many
companies invest in associated businesses. For example, a shipping company might invest in part
o f a terminal operating company. Such an investment, indeed any long-term investment, will also
be classiíìed as a íixed asset.

Londons Bank o f England

9.4 C R E D IT
Goods and services in the commercial w orld are most írequently provided w ithout immediate
payment; the recipient o f the goods is given credit A vital íunction o f bookkeeping is keeping
track o f this credit.VVhen goods o r services are supplied, an account is presented in the form
o f an invoice.This document gives details o f the goods o r services provided and the cost.The
invoice is likelyto State when payment should be m ade.orthe length o ítim e permitted between
supply and payment may be mutually agreed by the tw o parties.

Those w ho have supplied goods o r services and who are awaiting settlement o fth e ir invoices are
called creditors.W hen the accounts are paid,the outgoing money is reíerred to as expenditure.
Those w ho owe money against outstanding invoices are debtors.W hen they have settled their
accounts the money received is reĩerred to as income o r revenue.

The íunction o f bookkeeping is to record all outgoing and incoming accounts vvhich are entered
in ledgers. In years gone by, these vvould have been large heavy books into which transactions

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were recorded in ink. Most major enterprises have computerised their accounting systems,
but the w ord ‘ledger’ is still used to refer to those parts o f the system that record the issuing
o r receiving o f invoices.The bookkeeping process then records when the invoices are settled.
The traditional name fo r that record quite logically was the cash book, which in computerised
systems is sometimes reíerred to as transaction lists.

From tim e to time, the totals o f money received and money paid out are added up, as are the
totals o f money owed by debtors and money owed to creditors.The result is either a proíìt o r
a loss. In most countries, such an account is simply called the proíìt and loss account.This kind o f
account, covering the sum o f all the transactions during the past year; has to be produced every
year by limited companies. It has to be checked by an independent accountant called an auditor
and then submitted to the government; it may eventually become available fo r public scrutiny,

A t the same tim e as the pro fit and loss account is published the balance sheet also has to be
produced.The balance sheet sets out the value o f all the companys assets and liabilities at the
end o f that particulartrading yean Assets are the value o f goods, investments, money due to be
received from debtors and cash the company has a tth a t moment. Liabilities include any amounts
due to be paid to creditors, loans that need to be repaid and sums due to shareholders who
subscribed the money with which the company was íormed.

In the balance sheet, assets are vaiued at the amount o f money used to purchase them. Once
they have been used, most íìxed assets, such as cars and machinery, are w o rth far less than the
original purchase price.This Progressive reduction in value has to be reílected in the companys
accounts, so a percentage o f the value is recorded as an expense each yean called depreciation.
The application o f depreciation is reíerred to as vvriting down the asset.

Different rates o f depreciation are applied to different types o f Capital goods. A ship may be
considered to have a life o f 20 years and so be vvritten down by 5% a year. An offìce desk may
be w ritten down at 25% a yean

You cannot leave the subject o f how the vaiue o f an asset is shown in the companys books
vvithout touching on the subject o f revaluation o f assets. In shipping, the market is constantly
íluctuating and occasionally these íluctuations are very large. Such íluctuations go beyond
simply affecting the rates o f íreight being paid.They spread their iníluence into the ship sale and
purchase market. It would be unrealistic if the ovvner steadily reduced the valuation o f a ship in
accordance w ith a depreciation schedule vvhile in the real w orld that ship had actually doubled
in value. Similarly, the company vvould be dishonest to its shareholders if a ship were shown in
the books as having ĩallen in value by just 10% when an economic recession had in fact reduced
the ship to no more than scrap value,

Revaluation o f assets, up o r down, is not carried out casually. A market trend has to be clearly
expected to continue for a long tim e beíore any such action is taken. In most countries, company
law has to be strictly observed.

To recapitulate, the profit and loss account contains the sum o f alỉ the transactions over the
previous yearThe balance sheet shovvs what the company is w o rth at that particular moment.

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Group p ro fit and loss account

For the year ended 31 March xxxx

This Yr Last Yr
£m £m

Turnover 2920.2 1981.7

Net Operating Costs (2620.9) (1791.1)

299.3 190.6
Share of pre-tax profits of associated companies 28.3 21.1

Operating Profit 327.6 211.7

Interest payable less interest receivable (45.6) (33.2)

Proíit on ordinary activities beíore profit-share and taxation 282.0 178.5

Employee profit-share Í7.3) (4.4)

Profit on ordinary activities betore taxation 274.7 174.1

Taxation on proíit on ordinary activities Í79.5) (49.4)

Profit on ordinary activities after taxation 195.2 124.7

Minority interests (8.8) (2.5)

Extraordinary and Capital items 25.3 29.8

Profit for the íinancial year attributable to shareholders 211.7 152.0

Dividends (91.8) (70.3)

Profit transíerred to other reserves (41.1) (30.2)

Protit for the year retained in this account 78.8 51.5

Dividends per £ of deterred stock 22.0p 19.0p

Earnings per £ of deíerred stock 47.1p 41.7p

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Balance sheet

As at 31 March x x x x

This Yr
£m
ASSETS EMPLOYED
Fixed Assets
Tangible Assets
Ships 645.2
Properties 1068.7
other fixed assets 252.4
Interest in leased assets 33.9
m 5
Investments 2168.7

Current Assets
Stocks 309.9
Debtors 573.9
Investments 8.5
Cash at bank and in hand 57.0
949.3
3.118.0
Pínanced by
CAPITAL AND RESERVES
Called up share Capital 545.0 376
Share premium 30.9 10
Revaluation reserve 232.7 142
Other reserves 373.1 357
Profit and loss account 284.7 225
Stockholders’ funds 1,446.4 1,112

Minority interests 32.4 34

Provsions for liabilities and charges 77.4 55
Loans 610.0 363
Creditors 931.8 749
1,651.6 1,202

3 ^ 0 2 ^

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9.5 M A N A G E M E N T A C C O U N T IN G
So far, our look at accounting has concentrated on the historical side o f the companys íìnances.
Management accounting looks at what is happening now and what the company hopes will
happen in the íuture.This aliovvs plans to be made to ensure continued, o r increased, profits.

Reíerence to the immediate past is still vital. You will often encounter the expression ‘same
period last year’ when seeking a íoundation upon which to set a guide fo r íuture expenses.This
fonA/ard estim ation o f expenses is a vital part o f budgeting, as is the parallel but often much
n o re difficult jo b o f estimating future income. Careíully using such systems o f planning and
checking is reíerred to as budgetary control.

It is clearly im portant to tr y to w o rk out, as accurately as possible.the companys future progress,

so it is essential to compare actual expenditure and income with the budgeted íìgures at írequent
intervals.This will give an early warning o f anything going wrong. In particular, budgeting permits
t ie company to íorecast cash flow. In this way it can be sure it will have money available to pay
expenses, from the smallest invoice to the highest salary, when they become due.

Most companies prepare management accounts several times a year; often monthly.They include
a profit and loss account fo r the year to date and comparisons with both the budget and the
previous yearThey will also include cash-flow forecasts.

9.6 CASH FL O W
Earlier in this chapter it was shovvn how, by comparing money due to come in w ith money
due to be paid out, the companys proíìtability can be estimated. But it does not m atter how
proíìtable the company is on paper. If the money is n o t physically available to pay vital things
such as loan repayments, rentals and salaries the company will fail.

It will be recalled that creditors are the people to w hom your company owes money. EfFectively,
your company has some o f th eir money in its account. Similarly, debtors are those w ho owe
your company money, so they have some o f your companys money in their accounts.

If debtors have m ore o fth e companys money than the company has creditors' money it will fast
approach the stage when the company has insuíTicientcash to meet immediate commitments;
it will reach a cash-flow crisis. Many otherAA/ise profitablecompanies haveíailed ovving to
mismanagement o f th e ir cash flows.

Banks provide one source o f shipping loans

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A company should certainly not deliberately delay paying its bills well beyond their due date. A
reputation as a slow payer may damage the com pan/s future prospects. Hovvever, it is im portant
to negotiate the best possible payment terms with suppliers and to avoid conceding long credit
periods with customers. Also im portant is having a department with the special responsibility
fo r credit control. Slow payers can so easily become non-payers, resulting in bad debts.

If a com pan/s accounts show a considerable surplus o f creditors over debtors, it may appear
to have a healthy cash flow. W hile this may be the case, it could also indicate falling sales, which
will produce a trading loss next year A companys State o f íìnancial health cannot be judged
from just a single detail in its accounts - you will alvvays need to study all the items to obtain a
full picture.

A company may often be cailed upon to demonstrate the health o f its íuture cash-flow position.
A lender will be keen to ensure that the borrovver can repay any loan and meet the interest
payments. Although a mortgage may be taken out and a ship used as security.the finance house
vvants to buy and sell money, not become a shipovvnerThus before the loan is agreed, the
lender will wish to study a cash-flow íorecast o r cash-flow projection.This will need to be good
enough to give lenders confìdence that the borrow er can earn enough money to meet its
obligations underthe loan.

9.7 COSTS
A Capital asset such as a ship needs to w o rk to earn revenue and generate proíìt.To do so
requires expenditure on a wide range o f items, which will have to be íorecast as accurately as
possible fo r budgeting purposes.To assist in this process, costs are divided into fixed costs and
variable costs.

Fixed costs are those expenses that will need to be met even if the ship stands idle, such as loan
repayments and interest on the loan.You wiil often hearthis process reíerred to as amortisation.
A nother cost that continues regardless o f what is happening is depreciation, because as an asset
grows older so its value decreases.This is subịect to any revaluation, o f course.

For ships, variable costs subdivide into running costs and voyage costs. Running costs are those
that occur whenever a ship is operational, such as crew vvages, maintenance and Insurance.
Voyage costs are those that apply uniquely to a speciíìc voyage, including bunker fuei, p o rt costs,
stevedoring and agency fees.

W hi!e fixed costs are there to stay, variable costs give wide scope fo r the skilts o f those
concerned with budgetary control. Careíul housekeeping can make a great diíĩerence to the
companys profitability.

9.8 TYPES OF C O M P A N Y

9.8.1 Sole tra d e r and partnership

There is notning to prevent an individual going into ousiness on their own and so retaining ali
the net profit. In this situation, the individual has to raise ali the money necessary to operate the
business, which they may be able to do only by borrovving money against a security such as a
house. All the risks fall on the individual, including the ultimate risk o f losing everything if things
go wrong.

Two o r more people may decide to pool their resources o f money and skills and so form a
partnership. Usually, they draw up a partnership agreement, which íormalises the arrangement.
The same benefits and risks apply to partnerships as to sole traders except, o f course, that they
are shared. Here it is im portant to note that if One partner is unable to fulfil their obligations, the
o th er partners are obliged to bear full responsibility.

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A partnership is usually reíerred to as a fìrm. There is no restriction on size, and some

partnerships, such as fìrms o f accountants, stockbrokers and lavvyers, can be quite large
organisations.

9.8.2 Lim ited company

O ne way o f avoiding some o f the risks o f sole trading o r partnerships is to form a limited
company.The thing that is limited is the liability.Those íorming the company are shareholders
ratherthan partners and their liability is limited to their shareholding. Ifth e company fails, all they
lose is what they paid fo r their shares.

Someone has to bear the rest o f the loss and in this case it is those to whom the company
owed money.This may seem uníairto the suppliers that provided goods on credit, but it is a risk
they must run when doing business with a limited company.The risk is lessened by legal Controls
on iimited companies. Most countries require limited companies to publish their accounts each
yearthrough an offìcial body. In the U K this is the Registrar o f Companies.

Limited companies must have at least one directon who may o r may not be a major shareholden
Directors must abide by certain rules o f conduct.

A limited company may be owned by a small group o f shareholders, in which case it is referred
to as a private company and its name has to include specifìc words o r initials after its name, In
the UK,the w ord Limited o rth e abbreviation Ltd is used.

Companies owned by a large number o f shareholders are known as public companies and a
diíĩerent name o r set o f initials has to be used in their names. In the UK, the initials ‘plc’, standing
fo r public limited company, are used. As the name implies, public companies’ shares are available
to anyone w ho vvishes to buy them and they are traded on the stock exchange at vvhatever
price the market puts on that company at the tim e o f the sale o rth e purchase. Large companies
may buy, o r form, subsidiary companies that may themselves be quite large but vvhich, having
only a few actual shareholders, are still private limited companies.

9.8.3 C ongiom erate and m ultin atio n al company

Large companies can develop into what are knovvn as conglomerates. In addition to having
several branch offìces o r íactories they are made up o f numerous subsidiary companies.These
subsidiaries may be in a line o f business related to that o f the parent o r in an entirely different
trade. One reason fo r íorming a conglomerate is integration, To avoid having to buy inland
transport services from outside, a shipovvner may own a trucking company, fo r example. It may
also possess a Chain o f agency offìces so that it uses its experience to gain income from others.

Some conglomerates have very varied operations, perhaps encompassing a shipping company,
an engineering division and a tim ber division.The subsidiaries mav trade with each othen but
the main reason fo r the mix, which is known as diversiíìcation, is to spread the risk. One year
shipping may be booming vvhereas the building trade is poor, reducing the profitability o f the
tim ber division. In another yean engineering is doing well, but the shipping market is rather weak.
Because it does not depend on a single market sector, the conglomerate is able to maintain its
overall protìtability,

A conglomerate may set up branches and subsidiaries both in the country vvhere the parent is
registered and abroad so it can trade throughout the vvorld yet retain the trade and the proíìts
vvithin its own organisation.This type o f organisation is knovvn as a multinational, and high-profìle
examples are the major oil companies and mining companies.

As mentioned earlier; every company needs capital.The main way to raise Capital is to sell shares
in the company.The shareholders will only invest in the company if they are sure o f receiving
income in the form o f dividends.This is the term used to reíer to the distribution o f proíìts to
the shareholders.

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9.9 E X C H A N G E RATES
Each country o r region has its own currency and each currency has a value that can be
measured against the currency o f another country.These relative values íluctuate every day.You
may encounter reíerences to a countrys balance oftrade, vvhich is the difference between what
a country earns abroad from its exports and what it spends on imports.You could look on the
balance o f trade as the countrys profìt and loss accountThis measure o f its prosperity has a
major effect on the value o f its currency against those o f other countries, O th e r íactors affect
the foreign exchange markets, but they are beyond the scope o f this book.

Shipping is an international business, so rates o f exchange have an im portant role to play. For
example, a com pany may pay the crew's wages in pounds sterling, whereas Capital repaym ent
is in Japanese yen, bunker and p o rt costs in a wide variety o f currencies, and íreight is earned
in u s dollars. Should any o f these currencies become much stronger o r weaker; the company's
proíìtability could be seriously affected.

This effect is just as im portant to a chartehng brokerTheir salary and Communications costs
are in the currency o f th e ir own country, but, as íreight is usually payable in u s dollars, their
commission will also be in dollars. If their country is particularly prosperous at that tim e and is
enjoying a high rate o f exchange in the world's markets, then the incoming dollar payment will
yield less local currency than the broker may have anticipated when the deal was done.

W hen collecting íreight on beh alío f an overseas principal the eíĩect o f exchange rate íluctuations
can cause a problem. If the agent is slow in remitting collected íreight and the rate o f exchange
goes againstthe principars country in the interim .the principal vvill suffera loss.

There are probiem areas relating to exchange rates in all aspects o f the shipping business, so this
is a topic that demands constant vigilance.

9 .10 COM PANY ACCOUNTS

Several reíerences have been made to a company's published accounts and the appendices
provide an example o f how the basic elements o f such a set o f accounts might look. In practice,
a set o f pubiished accounts may also contain such things as a cash-flow statement and a list o f
explanatory notes.These wili include a description o f the deprecíation principles applied, the
way in which assets have been valued and various other items.

128 Institute of Chartered Shipbrokers

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m
Law of Carriage

Dơv/d Livngstone bridge - Victoria Falls

C h a p te r 10

10.1 IN T R O D U C T IO N
In any area o f business there are legal rules and there are legal remedies should any o f the rules
be broken o r disputes arise.

This is especially so in the shipping business where many transactions are only able to take place
because o f long-established legal customs and practices. All engaged in the shipping industry
need to be avvare o f the basic elements o f the law o f carriage o f goods by sea, including those
introduced as a result o f containerisation.

Among the íundamentals, this chapter discusses the im portant principles governing agreements
and the liabilities that arise even vvhere there is no actual agreement o r contract.

Each country has its own legal system, and it is beyond the scope o f this book to examine
closely those diíTerences. However, much shipping law is based on English law, so it is this that
will dominate in this chapter.

In any case, shipping is essentially an international business and the majority o f the maritinne
nations o f the w orid have agreed to coníorm to vvide-ranging international conventions by
incorporating those conventions into their ow n legal systems.

10.2 P U N D A M E N T A L S OF E N G L IS H L A W
English law is a common law system.This contrasts with systems in vvhich all the law is enacted
as a set o f codified legal principles. In a com m on law system many pieces o f legislation are
enacted by the government, Much o f English law is contained in a set o f principles and rules
taken from earlier decisions (precedents) made by judges in court cases. Com m on law is often
reíerred to as case law.

A re p o rt on a cou rt case will almost ínvariably refer back to previous cases, some o f them
dating back to the 19th century. To reach a decision, a judge needs to look at the past cases
that are most comparable with the one he o r she is considering. This should ensure that no
judgment is made that is vvildly o u t o f line w ith what has been decided beíore.

The C ourts o f Justice in London

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10.2.1 T h e civil court stru ctu re

In England.there are three basic levels o f c o u rt

1. The courts o f íirst instance comprise:

(a) the county courts, which deal w ith minor disputes;

(b) the high courts fo r all o th e r cases. The high courts have three divisions and the
one dealing w ith commercial and maritime matters is called the Queens Bench
Division.

2. Above the courts o f fìrst instance is the C o u rt o f Appeal. It is this to vvhich the losing
party may go if it feels the íirst judge was vvrong in reaching the decision. C ourt o f
Appeal decisions are binding upon the courts o f íìrst instance.

3. The Supreme C o u rt is the ultimate co u rt o f appeal and only very controversial cases
are decided at this level. Its decisions are binding on all lower courts. It may overrule its
own previous decisions, although this rarely happens.

Also based in London is the Judiciai C om m ittee o f the Privy Council.This is the íìnal court o f
appeal fo r United Kingdom dependentterritories and those independent British Commonvvealth
countries that have chosen to retain this avenue o f appeal.

The United Kingdom and other members o f the European Union have an even higher court
o f appeal, vvhich is the C o u rt o f Justice o f the European Communities. It rules on any cases in
which there appears to have been a violation o f a European Community treaty.

10.2.2 C rím inal law

All the above reíer to civil law, which governs disputes betvveen individuals o r groups o f
individuals. Quite separate from civil law is criminal law, vvhich deals with acts harmíul to the
population and is prosecuted on behalf o f the police o r some other arm o f the State. Criminal
law is beyond the scope o f this book. Hovveven some wrongful acts within shipping business,
such as íraud, are crimes and are dealt w ith by criminal courts.The criminal courts have their
ow n,tiered structure similarto, but quite separate from ,the civil courts.

10.3 A R B IT R A T IO N
Arbitration is a private means o f settling a dispute.The parties choose an arbitraton w ho may
be a sole arbitrator, ỉf both parties agree. Alternatively, each party may choose its own arbitrator
U nder some systems, if the tw o arbitrators cannot agree, they appoint an umpire. In other
places, the appointment o f a third arbitrator to form a tribunal o f three is automatic.There are
several centres o f maritime arbitration, but the most active are London and NewYork,

A rbitration was introduced as a cheap and speedy way o f settling disputes. The arbitrators
were themselves practising shipbrokers, so th e ir decisions were those o f commercial men.Then
proíessional lawyers began to be involved, arguing the case from both sides. As a result, the
finer points o f law have sometimes appeared to be more im portant than a quick commercial
settlement o f an argument.

To overcome this problem, and in an endeavour to regain arbitrations reputation fo r simplicity,

both London and NevvYork introduced speciíìc íorms o f arbitration.These offer a quick and
inexpensive alternative where the dispute is obviously suitable fo r a speedy solution.

A rbitration does not form part o f a country’s public legal system, aithough it is subject to
governing legislation, VVith arbitration the parties are, in effect, choosing their own judges.
Arbitration avvards are fìnal and binding upon the parties.The only appeal to the courts vvould
be fo r a judicial review on a question o f law.

Introduction to Shipping 13 1
C h a p te r 10

Ij'i

Lady Justice statue on top of the Old Baileỵ, London

10.4 THECONTRACT
Pundamental to any business act is a contract and it is vital to be clear as to what constitutes a
legally binding contract and how it comes about.These are the components to a contract:

1. O ffer - a speciíìc expression o f vvillingness to enter into a contract on specifìed terms;

2. acceptance - the offer must be accepted on the exact stated terms.This converts the
offer into an agreement;

132 Institute of Chartered Shipbrokers

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3. consideration - fo r the agreement to become a contract there has to be a consideration.

The person to whom the offer is made must give o r promise to give something in
return for the offer;

4. legality - to be valid, a contract must also be legally eníorceable; contracts cannot relate
to an activity that is not in itself lawful.

These four elements have to be technically present vvhether you are buying a bar o f chocolate
o r chartering a 150,000dwt tanken There need not be a physical object involved, because a
c o n tra ct may be entered into to carry o u t a Service such as a p o r t agency.

Although there has to be a consideration fo r a contract to exist, there are no rules as to how
much must be involved. A contract to sell a house fo r $1 vvould be just as valid as one for
$500,000, provided the parties willingly agreed to it. Indeed, there does not even have to be
actual money involved, as some leases fo r property require an annual rent o f one peppercorn. It
is a purely notional amount, but still satisíìes the need for a consideration,

10.5 REMEDIES FOR BREACH OF C O N T R A C T

lf one party o r the other in a contract does not períorm in accordance with what was agreed, a
breach has been committed and the injured party may seek redress.

If the breach o f contract is a major íailure, the injured party may simply w ithdraw from the
contract and seek damages. If the breach is a less im portant m attenthen the contract is still valid
but the injured party may seek damages.

Damages in this context mean the íìnancial loss that has been suííered. In some cases, the
am ount o f damages may be stipulated in the contract, such as demurrage in a charter party, in
vvhich case they are reíerred to as liquìdated damages.

10.6 T O R T
In the introduction it was mentioned that there may be liabilities even where no contract exists
and vvhere no crime has been committed. Such a civil wrong is called a to rt. It refers to an act
o r omission that causes another party damage in a situation where no contractual relationship
exists.The party against whose person o r property the to r t was committed has the legal right
to claim damages.

T h etyp e o í t o r t most likely to be encountered in shipping is negligence, vvhich is often described

as a íailure o f a duty o f care. A simple example vvould be vvhere a ship allows an escape o f oil,
which damages nearby property.The shipovvner owed a duty o f care to the nearby property
ownen It was the oil spill that caused the damage and the property ovvner has the right to claim
the cost o f repairing that damage from the negligent shipovvner

O th e rto rts include:

• trespass - physical damage to anothers property;

• defamation - libellous (w ritten) o r slanderous (spoken) statements that are held to

damage a persons reputation;

• conversion - allovving the possession o f goods to pass into the hands o f th e w rongful
ownenThis could also be the crim e o f theit;

• deceit - this would be íraud in a criminal case.

There are many instances in shipping, such as when an agent has control over what happens to
goods even when they are not actually covered by a contract, fo r which that agent is responsible.
This is where a íailure o f a duty o f care may occur and the agent may become liable fo r damages.

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C h a p te r 10

A n o th er example could arise when M r A asks M r B,“You have done business with M r So-and-
So - is he all right íìnancially?” M r B suggests that M r So-and-So is indeed financially sound, íailing
to mention that M r So-and-So is a swindler On the strength o f this advice, M r A goes on to do
business with M r So-and-So and ends up losing a lot o f money. M r A could then have a legal
case against M r B, w ho had a duty o f care to give an honest and accurate reply.

O f course, caution is needed here. Imagine if M r B had replied: ‘‘No, M r So-and-So is a crook;
have nothing to do vvith him.” In this case, the enquirer did not lose money. However; M r So-
and-So, w ho is in fact an honest man, gets to hear about the conversation. He is then likeiy to
sue M r B fo r deíamation o f character; because his reputation - and probably his business - has
been damaged.

The right way to deal w ith such a situation is, o f course.to say something like,“ l had no trouble
when I dealt with M r So-and-So, but you should make íormal enquiries elsewhere.”

O ne o f the w orst situations falls under the heading o f the to r t o f conversion.This is when
the agent releases discharged cargo to the wrong party.This could be someone w ho did not
present a vaiid bill o f lading. In such a case, the legitimate holder o f the bill o f lading can claim
fo rth e full value o f the goods from the errant agentThe agent will have no deíence and no One
else to turn to unless he is íully insured.

10.7 C O N T R A C T S R ELA TIN G TO T H E CARRIAG E OF GOODS

BYSEA

10.7.1 General
Transport by sea is unique in that, while the ship is on passage, the goods loaded in the
vessel are:

(a) the ships sole responsibility, and

(b) inaccessible to anyone except the crew.

A great deal o f the smooth operation o f internationai trade depends upon taking proper
advantage o f these tw o facts.

10.7.2 C h a rte r parties

It will be recalled that there are tw o principal types o f contract fo r the carriage o f goods by
seaThe charter party has the rate and terms negotiated in an international m arket Unless the
parties choose specifically to incorporate any international conventions such as the Hague-Visby
Rules, a charter party is a standalone contract in which virtually alỉ the intentions o f the parties
are described.

Previously we covered the different types of charter with some detail about the Standard forms
used.These, with any amendments and additions upon whịch the parties may agree, set down in
w riting the fuil intentions o f the parties.These are legally reíerred to as the express terms.

There are, howeven certain terms in a charter party that are implied under common law and
are reíerred to as implied terms.

In the case o f a voyage charten some basic implied terms are listed beiow.

O n the part o f the shipovvner:

(a) that the ship is seavvorthy;

(b) that the ship will proceed with reasonable despatch;

I 34 Institute of Chartered Shipbrokers

 Law of C arríage

(c) that the ship will tnake no unjustifiable deviation, although deviation to save life is alvvays
justifiable.

On the part o f the charterer:

(a) not to ship dangerous goods w ithout the knowledge o f the shipovvner.

In the case o f a tim e charter:

(a) that the tim e charterer will only use the vessel between good and safe ports;

(b) that dangerous goods will not be shipped w ithout the knowledge o f the shipownen

There are no international conventions covering ships under charter although the parties may
choose to incorporate some, such as:

(a) bills o f lading covering the cargo carried will be subject to the Hague Rules o r the Hague-
Visby Rules.The incorporating clause is often reíerred to as the Clause Paramount;

(b) general average will be subject to the York-Antwerp Rules, which detail how general
average should be applied and calculated.

General average is a centuries-old convention in vvhich it is agreed that if the ship takes action
that avoids a peril o r reduces the effects o f a peril, all parties must contribute to the cost o f this
action.This is known as the sacriíìce according to the value o f their participation in the venture.
The incorporating clause is often referred to as the N ew Jason clause.

O the r Standard clauses that are not speciíìcally derived from international convention but have
vvide acceptance may also be included such as a both-to-blame collision clause, and a w ar
risk clause.

10.8 LIN ER BILLS OF L A D IN G

There is no equivalent o fth e charter party in the linertrade.There is often a degree o f bargaining,
but this is generally within the fram ework o f the carrier’s Standard terms. Consequently, it is rare
fo r a vvritten agreement to be produced fo r liner cargo and the vital document is the bill o f
lading. It was, thereíore, stressed that the bill o f lading was not an agreement but was evidence
o f a contract-The actual contract, frequently only verbal, will have been made earlier.

Remember the other íunctions o f a bill o f lading: it is a receipt for goods covering both quantity
(set out in the body o f the b/i) and the quality (covered by the words 'in apparent good order
and condition'),This enables the consignee to claim against the carrier if there is a shortage o r if
the cargo is damaged.

Today, most cargo is shipped in containers and in the case o f fuil Container loads (FCLs), the
question o f quantity and quality is in the hands o f the shipper.This part o f the b/l will simply
contain a Container number, to g e th e r usually w ith the seal numben Also, the w o rd s ‘said to
contain’ when describing the cargo will be included.The consignee then has no claim against
the carrier provided the Container is undamaged and the seal is intact. Liability exists if it can be
proved th a tth e contents have been damaged as a result o fth e Container being badly handled.

W ith less than Container load (LCL) cargo the carriers responsibility as regards quantity and
quality is the same as fo r break-bulk o r conventional cargo.

In the case o f break-bulk cargo, technically the b/l does not begin to operate until the cargo
crosses the ships rail at the tim e o f loading.With Container cargo, howeven the receipt element
o f the b/i, and aiso the carriers liability, come into effect much soonen possibly at the shippers
premises. This is w hy a Container b/l states ‘received’ rath er than 'shipped' above the carriers
signature. Also, the b/l needs a íurthe r endorsement to say when shipment actually to o k place in
o rd e rto become a shipped on board b/l.

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C h a p te r 10

Pinally, the b/l is a document o f title; the deíìnition o f title in this context is the right to ovvnership
o f property with o r vvithout actual possession.

It is crucial to rem em be r th a t no One has access to th e cargo vvhile it is on board th e ship at sea.
During this tim e the b/l becomes a negotiable document enabling a named consignee to sell the
cargo and to pass titie to the cargo by endorsing the b/l by signing it on the backThere is no
limit to the number o f times a b/l and title to the cargo can change hands in this manner But it
must take place while the cargo is still on the ship.

Payment ío rth e cargo may have been arranged via the banking system through a documentary
letter o f credit. In this case, the second part o f the b/l's roie as a document o f title comes into
play.This tim e it is used as security fo r payment. In such a case, the b/l is not made out to a
named consignee but in that part o f the b/l, the vvords 'to order’ appean Such a document has
to be endorsed by the actual shipper and thereaíter does not need any íurther endorsement.
It is now open, and title to the goods belongs to anyone holding the b/l,Theoretically, they can
claim the goods even if they found the b/l in the Street. In the real world, shipping lines and their
agents are very vvary o f handing goods to anyone w ho may have obtained the b/l illegally. Most
countries recognise the crime o f stealing by íinding.

Although title to the goods may be transíerred from one person to another, the actual contract
remains between the original shipper and the carrienThere has to be a way to ensure that the
rights and liabilities underthe contract also pass to the new consignee.the endorsee.To achieve
this, the UK passed the Bill o f Lading A ct 1855.The evolution in liner shipping meant that this
needed updating and it was replaced with the Carriage o f Goods by Sea A ct 1992.

Coníusingly, there was already a Carriage o f Goods by Sea A ct 19 7 1, by which the UK ratified
the Hague-Visby Rules. So it is vital to remember that the 1992 A ct replaces the Bill o f Lading
A ct o f 1855 and does not affect the 19 7 1 Act.

Like the 1855 Bill o f LadíngActthe Carriage o f Goods by SeaAct 1992 empowers the consignee
to sue the carrier It aiso subịects the consignee to the liabilities in respect o í the goods as if the
contract had been made between the consignee and the carrienThe 1992 A ct corrects some
problems in the 1855 A ct and takes sea waybills and delivery orders into consideration.

10.9 H A G U E -V IS B Y RULES
There is some degree o f equality o f bargaining strength between an ovvner and a charterer that
only varies according to the íluctuation o f the market. Liner shippers seldom have such povver

In the distant past, owners o f ships carrying general cargo were able to exert their bargaining
strength over shippers by imposing contract terms.These allovved the shipovvners to exem pt
themselves from all manner o f negligence. Shippers rebelied and lobbied governments to
introduce legislation to curb this abuse o f povver. Governments across the vvorld responded
with a hotchpotch o f laws that, in this essentially international business, created chaos.

Governments, therefore, came together to discuss the draíting o f an international convention,

but It was not until 1921 that agreement was reached and the Hague Rules came into being,
These were ratiíìed by almost all the w o rld ’s maritime countries; in the UK it was by the Carriage
o f Goods by Sea Act 1924,

Largely as a result o f containerisation and changing values, the Maritime Law Com m ittee o f the
International Law Association amended the Hague Rules with the Brussels Protocol o f 1958.
The resulting Hague-Visby Rules found íavour vvith most maritime countries and the UK ratiíied
the Rules with the Carriage o f Goods by Sea A ct 1971, which replaced the 1924 Act.

The Hague-Visby Rules apply only to goods carried under a bill o f lading o r similar document.
They do not apply to a charter party unless specifically incorporated into it.

13 6 Institute of Chartered Shipbrokers

 Law o f C arriage

The Rules use the term ‘carrier’, vvhich includes ow ner o r charterer w ho enters into a contract
o f carriage with a shippenThe Rules can be summansed as follows:

(a) they set out the duties o f the carrier to provide a seavvorthy and cargo-worthy ship
at the beginning o f the voyage. This is not an absolute liability; if the ship becomes
unseaworthy during the course o f the voyage, a want o f due diligence has to be proved;

(b) the carrier must provide a bill o f lading o r similar document;

(c) there must be no unjustifiable deviation, but deviating to try to save life o r property is
considered reasonable;

(d) the shipper guarantees the accuracy o f the details o f the cargo supplied by him;

(e) there is a list o f things fo r which the carrier shall not be liable; these are matters that are
clearly not underthe carriers control;

(f) there is a limit to the amount o f compensation the carrier has to pay in the event o f loss
o r damage.This is the equivalent o f saying “ This is where my Insurance stops so this is
where yours should start” .The maximum amount is per package, and the Hague-Visby
Rules define ‘package’ when containerisation is involved;

(g) unlike the Hague Rules.the Hague-Visby Rules incorporate a Himalaya clause.This brings
a servant o r agent o f the carrier under the protection o f the bill o f lading;

(h) a claim fo r loss o r damage has to be brought within one year o f delivery o r the date
vvhen they should have been delivered.

Most manuíactured goods are carried in containers, so a combined transport b/l covers far
m ore than simply carriage by sea. It includes all the other ancillary transportation elements
found vvithin intermodalism. Carriage by road is covered by the Convention on the contract for the
international carriage o f goods by rood (CMR Convention). Similarly, carriage by rail vvithin Europe
is covered by the Uniform rules concerning the contract for international carriage o f goods by rail
(CIM convention).

The details o f these conventions are beyond the scope o f this boo kT h e rules and limitations
o f liability o f these modes o í transport come into effect if loss o r damage occurs on road
o r railvvay. If the precise place where the problem arose is unknown, then the Hague-Visby
Rules apply.

10.9.1 H im alaya ciause

Reíerence was made earlier that the Hague-Visby Rules include a Himalaya clause, which brings
agents and other servants o f the ow ner under the protection o f the bill o f ladings limits of
liability.The clause gets its title from the passenger ship Himalơya, w hich created a legal landmark
in !954, A passenger; Mrs Adlen was injL;red while boarding the ship because the gangvvay had
been poorly secured. U nd erth e contract evidenced by her passenger ticket she could not claim
damages from the shipovvner Instead, she successíully claimed damages against the master and
the boatsvvain o f the ship in to rt, alleging that they were negligent in that they failed to see that
the gangvvay was properly secured.

Introduction to Shipping 137

C h a p te r 10

Passenger ship H im a la ya , catalyst fo r that clause in the Hague-Visbỵ Rules

This case, Adler V Dickson (The Himơlaya) [ 1954] 2 Lloyds Rep 267, sent a shockvvave through
the shipping business. It was realised that the same legal device could be used to circumvent
the limits o f liability that the Hague Rules had coníerred upon the bill o f lading. Bills o f lading
were thereíore hastiiy redraíted to inciude a clause that extended the protection o f the b/i to
everyone directly working fo r the ow ner

The reasonableness o f such a ciause was generally accepted throughout the shipping vvorld and
so the situation was íully covered in the Hague-Visby Rules, speciíically in the íour clauses that
comprise A rticle IV bis in the Rules. It should be noted that clause 4 in that article does not
protect the servant o r agent if it is proved that the damage resulted from an act done recklessly
o r with the intent to cause damage.

10.10 H A M B U R G RULES
The United Nations Commission íorTrade and Development (U NC TAD ), vvhich focuses on
the afFairs o f less-developed countries, held a meeting in Hamburg in 1978 to consider the
carriage o f goods by sea.The meeting produced a rival to the Hague-Visby Rules knovvn as the
Hamburg Rules.

Their object was to íavour non-maritime countries, which tend to be cargo-owning countries.
This becomes apparent when you see the limited number o f countries that have ratified the
Hamburg Ruies.

Some o f the chieí differences are:

(a) Hague-Visby operates only as goods pass the ships rail in and out, but Hamburg covers
the whole period during which the carrier is in charge o f the goods and thereíore
applies beiore and aíter ioading or- discharge;

(b) the carriage o f live animals and deck cargo is completely excluded from the provisions
o f Hague-Visby, but there is a qualified inclusion in Hamburg;

(c) there is no provision fo r loss caused by delay in Hague-Visby, but with Hamburg the
carrier is liable fo r losses resulting from delay unless they can prove the delay was
entirely beyond the ir control;

(d) the amount o f compensation fo r loss o r damage is much higher in Hamburg under the
limitation o f liability provision;

(e) the time restriction is tw o years under Hamburg against one year in Hague-Visby;

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 Law o f Carriage

(f) Hague-Visby Rules appiy to goods loaded in a signatory State; Hamburg Rules apply
when goods are loaded o r discharged in a signatory State. This may lead to conílicts
under the b/l where the loading p o rt is Hague-Visby and the discharging p o rt comes
under Hamburg Rules.

10.1 I R O TTER D A M RULES

The m atter o f international law relating to the carriage o f goods by sea has never been
straightforward and it is still somevvhat coníused today. In addition to the Hague, Hague-Visby
and Hamburg Rules there is a whole variety o f domestic legislation around the w orld that
picks parts from each o r adds in elements from outside. In 2009, the U N completed w o rk on
a revised te x t that will supersede the Hamburg Rules. These will address the argument that
vvhereas the Hague Rules were biased in favour o f the shipowners,the Hamburg Rules have put
to o much pow er in the hands o f shippers.

These new rules are reíerred to as the Rotterdam Rules.The íìnal te x t o f the Rotterdam Rules
was agreed in 2009 and later that yean the rules were open fo r signatories. Although there are
more than 25 signatories only tw o countries, Spain and Togo, have actually ratiíìed the rules. It
might be tovvards the end o f the decade beíore the required 20 countries have ratified them
and included the rules in their national laws.

The Rotterdam Rules are the first to address the issue o f multi-modal transport. VVhile they
have received an enthusiastic reception from many organisations around the w orld representing
both shipovvners and cargo interests, at least one body, the European Shippers' Council, asked
that the rules be reconsidered,

Although ratiíìcation and incorporation into national law is proceeding very slowly, it is possible
that some parties may choose to adopt the rules as a íreely negotiated contractual obligation.

10.12 A G E N C Y
An agent carries out w o rk on behalí o f a principal except, o f course, vvhere the w o rk is done
by a departm ent in the principars own offìce. An agent's íunction is to bring their principal into
contractual relationships with third parties.

10 .12 .1 C reation of a relationship of agency

An agency can be created:

(a) by express agreement;

(b) by implication/conduct;

(c) by necessity, such as vvhere a person is entrusted with another persons property and a
definite and commercial necessity arises to deal with that property and it is impossible
to obtain the property ow ner’s instructions.

10.12.2 Rights and duties imposed as betw een agent and

principal
Duties o f an agent:

(a) to exercise due diligence in períormance o f their duties;

(b) to apply any special skill that they proíess to have;

(c) to render account;

Introduction to Shipping 139

C h a p te r 10

(d) not to make a secret p ro íìt Doing so is a crime in many countries. An example c o jld be
where the agent agrees with the stevedore that the latter should inílate their biiil to the
shipovvner and pay the excess as a secret commission to the agent.

Duties o f a principal:

(a) to pay the agent;

(b) to protect the agent against liabilities incurred in carrying out the principal’s orders.
This includes reimbursing expenses that the agent has incurred on the principars Dehalí,
and also protecting the agent against action, such as legal action, that should have been
directed against the principai.

10.13 BREACH OF W A R R A N T Y OF A U T H O R IT Y
W hen an agent deals on behalf o f its principal the agent is warranting to the third party that
they have the principars authority to do so. If they deal vvithout that authority, actual, im p icit o r
o f necessity, then they are in breach o f vvarranty o f authority.

The agent can be in breach deliberately, through being íully aware that they were doing so, o r
they may have been reckless as to vvhether o r not they were in breach.They can also be in
breach through negligence. For exam ple.the agent may have misread the terms on whicn they
were authorised to offer a ship fo r a cargo, so the subsequent íìxture was not on the term s the
ow ner intended.

In either o f these cases, the agent, by warranting th e / had authority to do what they did, made
themselves liable to the third party fo r any loss so caused. Mistakes have to be paid fon

Breach o f vvarranty o f authority operates in another way, too, although it is not so easy to
understand. Imagine that you are a broker negotiating vvith a charterer on behalí o f an owner
based in another country. N o w suppose that the authority to make an ofíer to the charterer
cornes n o t directly from th e o w n e r but írom a b ro k e r in th e owner's c o u n try and it IS th a t
broker w ho misreads the authority and passes to you a fìrm offer with a mistake in it. In good
íaith, you make this offer to the charterer warranting you have the owner's authority to do
so. If a íìxture is concluded w ith this e rro r in it and the charterer sustains a loss, they will seek
recompense and the law says you are the one w ho has to pay.

This may seem uníair because you have made no mistake yourselí, but the law takes the view
that it would be quite wrong fo r the charterer to sufFen It vvould be equaily vvrong fo r the
charterer to have to proceed against the foreign broker w ho made the mistake, as the charterer
had no direct contact with that broker. As the íaulty offer came from you, it is you who must pay
the charterers damages.This is breach o f warranty o f authority w ithout negligence.Your only
remedy is to take action against the overseas broker w ho made the error, in the hope that you
can recover what you have had to pay out. Portunately, agents and brokers can insure, usuaiiy
through the ir p&l ciub, against any breach o f warranty o f authority, w ith o r w ithout negligence.
Such Insurance is a wise precaution.

10.14 P R O T E C T IO N A N D IN D E M N IT Y A S S O C IA TiO N S
p&l clubs are principally concerned w ith providing shipovvners with Insurance againstthird-party
risks.They began in the I9th century because commercial insurers and undetM/riters w ere not
prepared to offer the full cover fo r these ‘open-ended' risks.

p&l cover is arranged on a basis o f mutuality, so the ciubs are not intended to make a proíìt but
are íunded by members' contributions, known as calls. A member presents its claim fo r a sum
that it has settled with the third party, and that payment is then reimbursed to them.This is the
indemnity element o f the clubs. Should the claims on the club exceed the íunds available, the
club will make a supplementary call to obtain the extra money it needs from its members.

1 40 Institute of Chartered Shipbrokers

 Law of C arriag e

The protection element involves providing legal advice to members and Tighting claims th a t are
considered to be wrong o r excessive.

The main p&l claims are those o f shipovvners and o f third parties. Examples are personal injury
claims by people vvorking on the ships and damage to property caused by a collision w ith a jetty.
Probably the most active section deals with cargo claims when consignees claim short delivery
o r damage to their cargo.

There are also p&l clubs fo r charterers and fo r shipbrokers.The latter are principally concerned
w ith proíessional indemnity insurance.This is insuring people in shipping businesses against claims
made against them fo r negligence.

Recently there has been a tendency among some ovvners to return to commercial Insurance
cover fo r their third-party risks.

Introduction to Shipping 141

C h a p te r 10

142 Institute of Chartered Shipbrokers

 Appendices C o ntents

Appendices Contents
Appendix I Lloyds Register o f Ships Sample Page 145

Appendix 2 Stovvage Pactors 159

Appendix 3 List o f C harter Parties Ị6I

Appendix 4 BALTIME 1939 (as revised 2 0 0 1) 163

Appendix 5 Gencon C harter Party 169

Appendix 6 Major Diíĩerences betvveen Voyage Charters

and Time Charters 173

Appendix 7 Chartering Expressions and Abbreviations 175

Appendix 8 Shellvoy 6 177

Appendix 9 Container Pixings 197

Appendix 10 ContainerTypes 199

Appendix 11 Congenbill 2007 201

Appendix 12 Com binedTransport Bill o f Lading 203

Appendix 13 Liner Booking N ote 205

Appendix 14 SeaWaybill 207

Appendix 15 SHIPMAN 2009 209

Appendix 16 PONASBA Standard LinerAgencyAgreem ent 231

Appendix 17 W orld'sTim e Zones 237

Appendix 18 Beauíort Scale 239

Appendix 19 BIMCO Ice Clause 241

Appendix 20 St Lavvrence Seavvay 243

A p p e n d ix 2 l Kiel Canal 245

Introduction to Shipping 143

 Appendix 22 Suez Canal 247

Appendix 23 Panama Canal 249

Appendix 24 Shipping Report 251

Appendix 25 Hague-Visby Rules 253

Appendix 26 Clause Paramount 259

Appendix 27 Nevv Jason Clause 261

Appendix 28 Both to Blame Collision Clause 263

Appendix 29 W a r Risks Clause 265

Appendix 30 Hamburg Rules 267

Appendix 31 Rotterdam Rules 281

144 Institute of Chartered Shipbrokers

 A p p en d íx I Lloyds Register o f Ships Sample Page

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7224368 AMPLE HARVEST 4,275 Class (CC)(NV) 1972 Klevan M«k. Ver1(»t»d AS .UlsUinvik GanerBl Cargo Shlp 1 oil angloe đnving 1 PPpropeller
XU7M2 exA m p leR o ute l-2001 ex Jm Tai-Í999 2 400 YdNo 23 Grain 8,546. Bale 7 796 TotalPowef 3,3a3kW(4,&00hp)
0072334 »jt ĩa-1S96 ex Ocean Mercury -Í9S6 S.919 Loa 106 80 Brex 17 07 Ogm 7 070 TEU173CHO 93/20'CDK Wer1ispoor
e» Corooa -»98« «xFinnma8t0r - i982 T/cm Lbp 10036 Brmơ 17,00 Dpth 9 00 8 0 «)(40 ) 1 X4 StrokeSCy. 410x470
Tlan Hua Marítlme Trensportation Corp. Ltd. VVeldeơ, 2 dks Compsrtmenls 2 Ho. ER. 2 TvvDk Stoh(-W«rk»poor Oies«l B.v.
2 Ha 2(27 4 X 13 3) ER Cranes AuxGen 3x174kW 3fl0V60Hz
CemboơiB 2x12 5t,2x10t Fuel 236 0(d 0.) 386 0<hvf) 14 Opd

9013177 345 Class BV 1991 12 Soe- fr*nca i»e de Con», Nav.. Oay>excur«ion Pa*s«nger st 2 oil enginM Wìth clutches. thxible couphngs S.Srgeare<í
FQHN Villeneuv*—!• —Garenn» Yd No 669 Passengers unbenhed V o to sc shatỉs đnvtng 2 VValeriels
125434 It of Th* R spublic o f Prance (R*9 i« Loa 38 00 Brex - Dghl 1350 Total Power 3.396kW(4.620hp)
I«ntale des Passaees d'Esu de lã Lbp 33,50 Brmđ 7 75 Opơi 3 40 MWM TB06C
Welơ«d, 1 dk 2 X Vee 4 Stroke 16 Cy. 170 X 195 each-
1,699KW(2.310bhp)
Mữtoren VVerke Mannheim AG (MWM)
Au*G«n 2 X 60kW 360V 50Hz
Fu«l 10 4 (d o )
7102SOB AMR 1.582 Class RS 1970 Ssntiarul Naval Con«UnU S.A. -Constanu Gen«ral CargoShlp 1 oi( «ngln« đnving 1 pppmpeller
XUSP7 ex Cherepovelí -Í99S 708 YđNo 339 Ice strengthened T o la lP c ^ r l,147kW(1,5«0hp) t2 0lưi
9870089 Quantal Shlpping Ltd. 1,857 Loa 8027 Brex 1194 Dghl 4 900 Bale 2.450 Sulzer 6TAD36
Romalex Manne s A E T/cm Lbp 7149 Brmd Dpth 5 69 1 X 2 SlrokB 6 Cy 360 * 600
Pnnom-Penh Cambodia Welded. 1 dk 3 Ha (B 2 x 5 8 )2(8,2x7.9)E R Tvoơnca Daei Moi<ya ‘Ji>ooturt»na’
MMSI 514166000 Cranes 3x51

194« 03 Far^u*on Bro». (Port GI«»gow) L ld .^ o rt 2 Stsam Reop drtving 2 FPpiĩ>p«llers

M of Th« R«publlc o f Ghana (Ports GlaãgowYdNo 384 2 1 Steam Ro&p Tnple exp ln-Lin« 6Cy HP
Authohty) Loa 32 67 Brex 7 47 Dghl 3 277 IP1-(2>445 8 LP-(2)737 xSUoke-559
T/cm Lbp Br m<l - oplh Perguson Bros (Poft Gla»QCw) Lto
Tekoiađi Ghana Welded.

5138058 AMREET 993 Class LR 195a-07V«lm *tO y-H «l*inklY dN o 101 Gsn«r«l Cargo Shlp 1 oil anglna driving 1 PPptopeller
YKBS ex AI Schooneí-1992 ex Rim -1986 604 * Cl8s»e<J LR unUl r/1/83 Loa 69 19 Brex 10 63 Dgm 4 242 Ica str«r>gtr>eõ«<i ToialPowef 706kW(960hp> 11 Okn
39/Uk ex Mona Star-7978 ox Gullkrona-1976 1.4Ữ8 Lbp 62 â2 Brmd 10 BO Opih 4 42 Grain 1,940 Bale 1.743 Alpha 496R
N ailh Sldaw<. H uM nl Ammoun. Abdul Mouom T/cm wélde<). 1 dk 2 Ha (1 0 2 *5 4 )(1 8 2 x 6 0 )E R 1 X 2 stroke 8 Cy. 290 X 490
Markabi & Mohi Eldin Kaak Crsnes 2x31 Alpha DieMlA/S
Schooner Shipp.ng Fuel 71 0(do )
ia/lakia Syna

9081746 AMRIT KAUR 306 Class (AB)(IR) 1993-03 Qoa Shlpyard Ltd. -Goa Yd No 1150 Palrol v«st»l 2 oH enginM Sĩ g»ar9<1 to sc sfìafl ơnvmg 1 FT piopelhr
IVXL 91 Loa 45 95 Brex Dght Sesrch & Re»cue Tolal P < ^ I 2 960kW(4 024hp) 23 Okn
225 Govsmmanl o f Th0 Rspubllc of India (Coast Lbp 43 50 Bf m<J 7 50 Dpth 4 30 M TU 12V5MTB82
Quard) T/cm VVelded. 1 dk 2 X Vee 4 Stroke 12 Cy 186 ( 200 each-
1 4SũkW(2.012br>p)
Inơia SatCom lnmar»at c MTU Fneđr«íi»hafén GmbH
AuxG«n 3x80kW41SV50H2

7102211 AMRITA 1 173 Class KI(GL) 1971 Handara Engine«rín 0 & Shipr»pa<ríng Ltd.- Tug 1 oll «ngln« điiving 1 CPpropeller
YBYO H onoK oogY đN o 22 Tolal Po««r 588kW(600hp) 11 2kn
172 P.T. Pelayaran Loksl Karunrung 10 Loa 29.04 Brex 7 73 DgM 3 210 Alpha 408-26VO
T/cm Lbp 26 80 BrfT>d 7 40 Dpth 3 41 1 X 2 stroke 0 Cy 260 x 400
Jakarla Indonesia VVelded. 1 dk AJpha DieMl A/S
S20761S AMROZ 396 ơass (LR) L ivM tock Carrí«r 1 oil angino đnvtng 1 pppmpeller
OOBX ex Rabunionv-1992 an Cfoe8u8 -1975 220 *Cl8»sed LR uniil1/l/9& Westerbro«K Yd No. 746 Ice slíenglhened TotatPower 552kW(7&0hp) 10 8kn
B2 795 ex Berta -Í973 exLiberlas-1972 1,315 Con«er1ed from General Cargo Ship-1982 eale 1744 Werkspoof TMAB396
Amro z Shlpplog Co- SAHL T/cm Loa 64 85 Brex 9 91 Dghi 4 560 Compartm«nta 2 Ho ER 1 X 4 StroKe 6 Cy 390 X 680
Zeido Group Lbp 59 75 Brmd d a i Oplh 5 80 2H a (8 0 i 4 0)(12 1 X 4 0) ER N V VVerkspoor
Beinil inbanon Rivelecmeided 2dks Oemcks 2x614*31 Winches 6 Au»G«n 3i«26kW110Vdc

8401755 AMRTA JAYA1 5.4«4 Class NK 1984-05 Higakt ZoM fi K.K. -Jmabar1 Vd No 320 G «nenl Cargo Shlp 1 oll englne dríving 1 PPpropelhr
3FVN2 2.262 Loa 98 18(BB) Bf e* 18 01 Oght 7 544 Grain 13,070i Bale 12.097 Total PỜ ^r; 2,427kW{3,300flp) 12 0 kn
14189-e4CH Admiral Three StarS.A 6.839 Lbp 6995 Brmd 1800 Opth 1301 Comparlments 2 Ho, ER Hanshin 6EL40
PT Pelayaran Ssmuơera •Admiral Lines’ T/cm vvéldeđ. 1 dK 2 H a’ (22 2 x 9 0 )(2 4 7 x 9 8 )E R 1 X 4 StroKe 6 Cy 400 X 600
Paname Panama Craoes 4x20t The Han»hln DiẻMl VVorks Ltd
MMSI 362112000
8401854 AMRTA JAYA M 5,498 Ciass NK 1»84-0d Nlshl Zos«n K.K. -Imabarl Yd No 327 Q *n eril Cargo Shlp 1 oll engino đnving 1 PPpmpeller
/F ư s 3.836 L<M 98 16(BB) Br«x 18 04 Dght 7 S44 Grain <3.070. Bale 12.006 TotalPovMr 2 427kW(3.300hp) 12.0kn
P-T. Pelayaran Samudera ‘Admlral Lin*»" 6 840 Lbp 89 95 Brmđ 18 00 Dpưì 13 00 Companmenls 2 Ho. ER Hanshin 6EL41-.
ĩlc m W eided.2dKt 2 Ha (22 2 X 9 8) (24 7 X 9 6) ER 1 X 4 stroke 6 Cy 400 X 800
Jakar1a Indonesia Oemcxs 4x20t Tf>« Hanshin Diesel Wof1(s Lld
AuxG«n 3x280kWac

90039S0 AMRTAVII S.473 Class NK 1990-10 Murakacni Hida Z<M«n K.K. -Hakau G«n«ral C irg oS hlp 1 oll engitM driving 1 FPpropeller
3EKN8 ex On«nt Q u M n -1997 1,999 YđNo 318 Grain 13,2BÍBaie 12.611 Tolal PỜwer 2.427kW(3,300»íp) 11 6kn
1923&-90C Admlrsl Thr»e S u r S.A. 7,018 Loa 99 92 (BB) Br ex Dght 7 573 Compartmerrts 2 Ho. ER, 2 TvvOK AkSMka A41
PT Pelayaran Samudera -Admiral Lines' T/cm Lbp 09 95 Brmd 18 00 Dpth 13 00 2 Ha (21 7 x 9 8 )(2 4 5 x 9 8 )E R 1 x4S lro K « 6C y 410*800
Panama Panama VVelded. Derricks 4x201 Akasaka Tekkoste K.K, (Akasaka D«M<S Lld )
SalCom Inmarsat MMMSI 353116000 AuxG«n4x167kWac

91S0080 AMRUM TRAOER 5.941 Class GL 1997-04 Petersw«rft Wewtttsfleth GmbH & Co.- ConUinar Ship (Ful(y c«llular) 1 0<l «r»flirw with ll«iíiòie coupkngs & reductiongeareơ lo
V2LF ex Seaboard Unlty-f995 2,777 W0wel«fl*th Yd No 659 Grain 9.259 Bal« 8 957 sc shattơriving 1 CPpmpeller
launchetí 9S Amnim Trader - B.ữOì Loa 132 30(BB) Br ex 19 so Ogm 6 921 TEU624CHo17(V20' (40’) Total Powef 5,940kW(e,075hp)
T/an Lbp 123.40 8rm d 19 20 oplh 9 20 c Dk 454/20' VVartaila 9R38
SchlHahrtsgos«ll«chaft mbH & Co. KG WekJ«l. 1 dK (40')ìfWl 80refC 1 * 4 stroke 9 Cy 380x475
Hermann BuM GmbH & Cie Compartments SCellHo. ẼR Slor1>-Wart>lla D«s«l B V
Lovr Antigua * Barbiida 3 Ha ER AuxGen 2 X 320kW 400V 50Hz
Thrusters 1 Thwarl FP thoiSler (0
Fue! 120 0(d 0 )S60 0(> f.o )2S Opd

Introduction to Shipping 145

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Key to the Register of Ships

1. Reglstration

LR/IMO Number
A unique seven dig it num ber printed in bold type vvhich is used
for data Processing purposes, and which remains unchanged
duríng the life o f the ship.
The IMO (International M aritim e O rganization) identiíication
num ber was adopted on 19th Novem ber 1987 in IMO Resolution
A.600(15) and remains constant in the event o f rebuilding or
shiptype conversion. This unique num ber is assigned lo the
total or greater portion o f the hull enclosing the machìnery
space and is the determining íactor should additional hull
sections be added. The LR/IM O N um ber is never reassigned
to another vessel. This num ber is also utilised in respect of
SO Ư \S XI 1/3 and 1/5.

Lloyd’s Register - Pairplay Ltd is the sole

authority for identitylng and assigning an
LR/IMÓ nũmber.

IMO Resolution A.600(15)

IMO Resolution A.600{15) applies to seagoing ships of
100 Gross Tonnage and above, with the exception o f the
follow ing:-
Vessels so le ly eng a g ed in fi shing;
Ships w ithout m echanical m eans o f p ropulsion;
• Pléasure yachls:
Ships e ng aged on sp ecia l Service (e.g. lightships. íloating
radio stations, search & rescue vessels):
H op p e r barges:
Hydrotoils, hovercratt, Radio Communications & Saíety of Navigation
Ploating docks a n d structures classiíie d in a sim ila r S ubscribers seeking intorm ation should in the firs t instance
m anner; refer to S O U \S chapters IV and V C hapter IV w as revised
Ships o f w ar and troop ships: in 1988 to incorporate am endm ents to introduce th e G lobal
VVooden ships in general. M aritlm e D ístress and S afety S ystem (G M D S S ) and deta ils
requirem ents fo r all passenger ships and all cargo ships o f
Call Sign 300G T and upvvards engaged on intem ational vo yages to
Signal lerters or rađio call sign assigned by the relevant carry equipm ent such as Satellite E m ergency P ositioning
national authority. This is show n in itallcs. A dash {-) will be Indicating Radio B eacons (E P IR B s) and S earch and R escue
displayed w here confirm ation is awaited.
Transponders (SARTs).
Pishing Number C hapter V references, inter alia, the carriage o f V oyage
The identification num ber assigned by the relevant national Data R ecorders (V D R s) and A utom atic Ship Identitication
System s (AIS) fo r ceríain ships
authority to ships engaged in the íìshing ìndustry. The num ber
is displayed, on the vessel's hull, for perm a n e nl identification.
A dash (-) w ill be displayed fo r ships oth e r than fishing vessels 2. Names & Ovvners
or vvhere the iníorm ation is avvaiting confirm ation.
Ship’s Name
The current ship's nam e is displayed in b o ld ty p e . Ships
are listed in the R egister in alphabetical order, w ith numeric
entries appearing after the end o f the letter 'Z',

Pormer Names
The figures following the fo m ier nam e of a ship indicate the year
where known, in which the change o f name occurred and are
iisted in chronological order. The year o f change is displayed ir
italícs and is preceded by a dash (-). Where a name changes prio’
to the ship being commissioned, a 'Launched as' or 'Com pletec
as' entry will be displayed.
(In the absence o f date ohanges being advised, an estim atec
d ate has been included)

Ovvners
The registered ovvners are recorded in bold type The
underlined letter in each o w n e r's nam e indicates th e s o r
ỉetter under w hich the entry appears in the L ist o f S hipow ners
A dash (-) will be displayed w here coníirm ation o f registerec
ow ners is avvaited.
This field represents the legal ovvner o f the ship and the
nam e that appears on the s h ip ’s papers. It m ay be an ovvner
m anager or a w holly-ow ned subsidiary in a larg e r shippinc
g roup or a com pany created on pap e r to legally own a sh ip 01
ships and lim it liability fo r the real owners. This m ay be a lega
requirement of the flag State with vvhich it is registered.

Managers
The m anagers are recorded in norm al type. The underlinec
letter in each m a na g e r's nam e indicates th e letter und e r which
the entry appears in the L ist o f Shipow ners.

146 Institute of Chartered Shipbrokers

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Key to the Register of Ships :

Satellite Communícation Data

D etails of the Service provider and' the types of receiver are
listed. The various types are as follow s:-
Inm arsat-A (A nalogue system , supports voice, telex, fax
and data)
Inmarsat-B (Digital system, supports voice, fax, data & telex)
Inm arsat-M (Digital system , capable o f voice, fax & data)
Inm arsat-M ini-M (Digital system , supports voice, fax, data
and em ail)
Inm arsat-C (Store & forw ard data, telex system )

MMSI Number
ex joao Corte Real-1997 ex Aljezur-1988 The M aritim e M obile Service Idenlity (M M SI) is displayed w here
known. These identifiers are supplied by National A uthorities
Blue Pishing Ltd. Inc. under the auspices o f the International Telecom m unications
Union (ITU), w hich is based in Geneva.
Panama ------- Panama The ITU is an international organisation w ithin the United
MMSI: 351136000 N ations System , w here governm ents and the private sector
co-ordinate global telecom m unication netvvorks and services.
Official No: 350398 (web sile address w w w .itu .o rg )
ĩ Each num ber is unique and used to identiíy an individual vesseí
(or shore-based) radio installation. It is used w ithin G M D S S as
Official Number a vessel code.
Flag
Official Number
Port of Registry The identification num ber assigned by Ihe national registration
authority. A dash {-) will be displayed vvhere the iníorm ation is
avvaiting contirm ation.

3. Tonnage

Gross Tonnage
The G ross Tonnage printed in bold type indicates that the ship
has been m easured in accordance w ith the requirem ents of
the 1969 International C onvention on Tonnage M easurem ent
o f Ships. The G ross Tonnage generally com prises the m oulded
volum e o f all enclosed spaces o f the ship, to vvhioh a íorm ula is
then applied in accordance w ith the C onvention requirem ents.
Accordingly, no unit o t m easurem ent is assigned and the figure
365 attained is sim ply reterred to as the sh ip ’s “G ross Tonnage"
(GT). A dash (-) will be displayed w here contirm ation o f the
109
gross tonnage is awaited.
ex Ryving-1991 La The G ross Tonnage printed in italic type indicates that
•■PIR Kongsoy the ship has been m easured in accordance with tonnage
Jorg 0 isen regulations adopted prior to the 18th July 1982, w hen the
1969 C onvention cam e into force. This tonnage is referred to
Tromso Norvvay as “G ross R egistered Tonnage" (GRT).

A dash (-) w ill be displayed w here confi rm ation o f the m anager 2,641 C l^ s : AB (GL)
Is avvalted or Is not applicable. 1,644
The com pany is responsible fo r the oom m ercial decisions
concerning the operation o f a ship.

Port of Registry
The port o f registry show n is th a t w hich is displayed on the
ship and is published in italics.

Flag
This indicates the flag registry under w hich the ship norm ally
operates and is displayed in italics.
A oonsiderable num ber o f ships now operate under Parallel
Registry, w hich can resull in confusedidentifi cation o f a ship.
Lloyd’s R egister - Fairplay’s policy is to publish the R egistry
(flag and port), follow ing veriíication, w hich is painted on the
ship's stern.

Introduction to Shipping 147

A p p en d ix I Lloyds Register Register o f Ships Sample Page

Key to the Register of Ships

T h e M a ltese C ross d e n o te s th a t th e ship w a s c o nstru cte d

u nd e r L R 's S pecial S u rv e y in c o m p lia n c e w ith th e ir Rules.
T h is w ill be d is p la y e d in b o ld if app licab le.
1 00 T h is c h a ra c te r íig u re is assig n e d to sh ip s co nsid e red
suitable for sea-going Service. This will be displayed
in b o ld if app licab le. (P rio r to 1948 th is fig ure w a s not
inclu d ed in the class notation o f sh ip s inten d e d fo r lim ited
sea-going Service.
A T h e c h a ra c te r le tte r is a ssig n e d to sh ip s w hich have been
c o n stru cte d or a ccep ted into cla s s in a cco rd a n ce w ith
L R 's R ule s and R eg u latio n s and w hich a re m a in ta in ed in
g ood and effìcie n t c o nd itio n. T h is w ill be d is p la y e d in b o ld
if app licab le.
1 T h is c h a ra c te r tig ure is a ssig n e d to :-(a ) S h ip s having on
board, in g ood and e ffic ie n t co nd itio n, a n ch o ring a n d /or
m o orin g e q u ip m e n t in a c c o rd a n c e w ith th e R ules.
(b) Ships classed for special Service, for which no specifìc
a n ch o ring and m o orin g R ules have been publishe d , having
on board, in g ood and e ffic ie n t co nd itio n, a n ch o ring a n d /o r
m o orin g e q u ip m e n t co n s id e re d su ita b le and su ffic ie n t by
LR fo r th e p a rtic u la r Service.
T h is w ill be d isp la yed in b o ld if a pp licab le.
T h is c h a ra c te r Sym bol, in th e position usua lly occup ie d
by th e íig ure 1, is a ssig n e d to sh ip s w he n th e anch o ring
and m o orin g e q u ip m e n t is n ot in a cco rd a n ce w ith th e
Net Tonnage re q u ire m e n ts o f th e R ules, b u t is co n s id e re d to be
The N et Tonnage in norm al type is derived in a cco rd a n ce wìth acceptable for the particular Service. This Symbol is no
the requirem ents o f the 1969 International C o n ve n tio n on lo n g e r a ssigned.
Tonnage M easurem ent o f Ships. The N et Tonnage g e n e ra lly
com prises the m oulded volum e o f all cargo sp ace s on board,
to w hich a form ula is then applied in accord a n ce w ith the
C onvention requirem ents- The form ula fo r N et Tonnage also
takes account o f the varying íactors such as sh ip s depth,
draught, num ber o f passengers but n otw ith stan d in g the
above, will never be less than GT X 0.3. Accordlngly, no unit
o f m easurem ent is assigned and the figure attained is sim ply
reíerred to as the ship's "Net Tonnage" (NT).
The N et Tonnage printed in ila lic lype indicates th a t th e ship
has been m easured in accordance w ith tonnage re gu la tion s
adopted prior to the 18th July 1982, w hen the 1969 C o n ve n tion
cam e into force. This tonnage is referred to as "N e t R egistered
Tonnage" (NRT).
The Net Registered Tonnage is derived by ded u ctin g sp ace s
used for the accom m odation o f the master, oíTicers, crew,
navigation, and propelling machinery.
A dash (-) w iil be displayed w here confirm ation o f th e net
tonnage is avvaited.

Deadweight
The Deadvveight is the w eight in tonnes (1,000 kg) o f cargo,
stores. fuel, passengers and crew carried by th e sh ip w hen
loadeđ to the m axim um sum m er loadline. In th e case o f
vessels with m ore than 1 load line m easurem ent, LR F record
the higher deadw eight and corresponding d ra u g h l only.
A dash (-) will be displayed w here confirm a tio n o f the
deadvveight is avvaited.
C urrent C lass S ocieties
Tonnes Per Centimetre Immersion (Dual class)
The Tonnes per Centim etre Im mersion (T/cm), displayed in italic
type, is the vveight in tonnes (1,000 kg) required to im m erse the
hull o f the ship by one centim etre at a particular d raught, The
value shovvn is th a t corresponding to the m axim um su m m er
draughl.
5,960 Class: BV IRS 1982
4. Classification
2,670
General Class Detaíls
lf a ship is currently classed, the initial lelters o f th e S o cie ty 11,816 Loa
are recorded. In the event th a t a ship is disclassed th e initial Lbp
letters o f the Society will be recorded in p arentheses P re vio u s
class history is recorded in sequence order.
W here a ship has applied fo r class w hich h as n ot been
co nfìrm e d ‘(C la s s C o n te m p la te d )'w illb e d is p la y e d im m e d ia te ly
after th e initials o f the Society.

Lloyd’s Register - Class Sytnbols (Hull & Equipment)

In the event that a ship is currently classed w lth L lo yd 's
R egister (LR ) then the follow ing hull and e q u ip m e n t sym b ols
m ay be displayed.

148 Institute of Chartered Shipbrokers

 A p p e n d ix i Lloyds Register o f Ships Sample Page

Key to the Register of Ships

S h o rt In te rn a tio n a l Voyage - This expression m eans an

Special Survey Date intern a tio na l v o y a g e in the course o f vvhich a ship is not m ore
than 200 n autical m iles from a port or place in w hich the
Hull Class Notation

Service Restrìction Notation

4,295 \ c i a s s : LR 1955
1,688 ỈIIO O A I s s 03/1998
870 Loa Class: LR (IRS) 1956
*L M C Lbp 100A1 SS08/2000
Eq.Ltr-vv, Cable: SQ Coastal Service west coast of Loa
Aírica extending from Lbp
Namibia to Sierra Leone
M achinery Class Notation including Nigeria.

N This character letter is assigned to ships on which

anch o ring and m o orin g e q u ip m e n t n eed n ot be íitted in
view of their particular Service. This will be displayed in
bold if applicable.
T This character letter is assigned to ships which are
in te n d ed to p erío rm their prim a ry d es ig n e d Service
íun ctlo n o n ly w h ile th e y a re a nch o re d, m oored, to w ed
o r linked and w hich have in g ood a nd e fficie n t condition,
a de q u a te ly a tta ch e d a n ch o rin g , m ooring, to w in g o r línking p ass e n g e rs and cre w could be placed in saíety, and vvhich
e q u ip m e n t vvhich h as b een a pp ro ve d as su ita b le and d o e s not excee d 6 00 nautical m iles in length betvveen the last
sufficient for the intended Service. This will be displayed p ort o f ca ll in th e c o un try in w hich the voyage begins and the
in bold if app licab le. fin al port o f d estin a tio n. This notation is no longer assigned.
OU/OI Th e se c h a ra cte r le tte rs are assig n e d to o ffsh o re u nils
classed w ith LR and can be a ssig n e d to se lf-p ro p e lle d or Lloyd’s Register - Class Notations (Hull strengthening)
non -p ro pe lle d o ffs h o re units o th e r than ships. T h is w ill be H e a v y C arg o e s - W hen the scantlings and arrangem ents
displayed in bold if applicable. h ave been a pp ro ve d fo r the carriage o f such cargoes a class
* Denotes that the ship was built under the supervision of n ota tion 'S tre n g th e n e d fo r heavy cargoes' is assigned.
the su rveyo rs in a cco rd a n ce w ith th e R ule s o f th e British A s fro m Ja nu a ry 1978 this notation is assigned to general
C orp o ra tion (BS). c a rgo shlps and bulk carriers. vvhere applicable, but In the case
BS Denotes that the hull and equipment of iron and Steel o f ore or oil carrie rs th e class notation 'ore carrier' or 'ore or oil
ships classe d in a cco rd a n ce to B ritish C o rp o ra tio n R ules. ca rrie r' wlll be assigned.
'S tre n gth en e d fo r re gu la r discharge by heavy grabs' is assigned
Lloyd’s Register - Class Notations (Service Restrictions) at th e o w n e r's optio n w here cargoes are regularly discharged
S ervice re striction n o ta tio n s w ill g e n e ra lly be a ssig n e d in b y h ea vy grabs, and the thickness o f the plating o f the hold
o ne o f th e fo llo w in g fo rm s but th is d oe s not p re clu d e speclal inner bottom , h op p e r and tranverse bulkhead bottom stool is
c o nsid e ratio n fo r o th e r fo rm s in u n u su a l cases. increased in a c cord a n ce with the requirem ents o f the Rules.

P ro le cte d W aters S ervice - Service in sheltered w ater adjacent

to san d ban ks, reefs, b re a k w a te rs o r o th er Coastal íe á tu re s ,
and in sheltered w a te r betvveen islands. s tre n g th e n in g Notation
E xtended P rotected W aters S ervice - Service in protected vvaters
and also for distances (generally less than 15 nautical m iles)
beyond protected w aters in reasonable vveather. Reasonable
vveather is defined as W ind strengths o f force 6 o r less in the
Beauíort scale, associated w ith sea states sufficiently m oderate
to ensure that green w ater is taken on board the ship's d eck at
infrequent intervals only o r not at all. /7 5 ,6 7 5 C la s s :L R (N V ) 1991-04
‘Fetch’, ‘sheltered water’ and ‘reasonable / 48.824 *1 0 0 A 1 s s 01/2001
vveather’ are detined in LR’s Rules and bulk carrier Loa
Regulatíons strengthened for heavy Lbp
S p e citĩe d C o a sta l S ervice - S e rvice alo n g a co ast, and fo r a cargoes, Nos 2 ,4 , 6 & 8
d istan ce o u t to sea n ot e xce e d in g 21 n autical m iles, unless hold may be empty
s o m e o ther d ís ta n c e is sp e citie d for "Coastal Service" by
the A d m in istra tio n w ith w hich th e sh ip is registe re d , o r by
E S P SEÁ (R ) ESN-Hold 1
the A d m in istra tio n o f th e co a s t o ff w hich it is o pe ra tin g , as LI
a pplicable. «LM C UMS
S p e citie d R ou te S e rvice - T h is n otation m e an s th a t th e ship Eq.Ltr-lVt -• Cable:ư2 J
is in te n d ed for Service betvveen tw o o r m o re ports, o r o ther
g eo g ra ph lca l íe a tu re s vvhich are indicated.

S p e citie d O p e ra ting A re a S e rvice - T h is n ota tion m e an s th a t

the ship is intended for Service vvithin one or more geographical M achinery Class Notation
a reas as indicated.

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/ce s tre n g th en ing - lceclassifi cation notations and degrees

o f strengthening fo r navigation in ice are displayed vvithin the
class notation. W here a ship w as previously assigned ice
classification by the British C orporation this will be displayed
as 'Ice strengthening’

The abbreviations and their descriptions can

be found in the sectlon ‘Abbreviations used
in the Register’

Lloyd’s Register - Shiprlght Notation

s tru ctu ra l Design Assessm ent (SDA), Patlgue Design
Assessm ent (FD A) and C onstruction M onitoring (CM ) are
n otations assigned vvhere a ship com plies w ith the procedure
fo r the Design, C onstruction and Litetim e C are o f Ships. Eq.Ltr-rCable: 550.0/56,0 Ư3;-
pt575.0/60.0 U 3 '
The abbreviations and theír descriptions can
be found in the section 'Abbreviations used
in the Register’

Lloyd's Register - Class Notations (Special Surveys)

SS-w ith date Special Survey.
C S-with date C ontinuous S urvey o f the hull
Lake s s Periodical Survey o f ship classed for
G reat Lakes Service.

Lloyd’s Regíster - Class Notations(Machinery)

*LM C N otation assigned w hen the propelling and essential
auxiliary m achinery has been constructed, installed
and tested under LR's Special Survey and in CCS This nola tio n m ay be assigned to a ship classed w ith
accordance w ith the requirem ents o f the Rules. LR vvhich can be operated w ith the m achinery space s
under co ntin u o us supervision from a centralised
*LM C Notation assigned w hen the propelling and essential control station and th a t the control engineering
auxilíary m aohinery has been constructed under the equ ip m en t has been arranged, installed and tested
survey o f a recognised authority in accordance with in a ccordance with LR 's Rules,
the R ules and Regulations equiva le n t to those of *Lloyd's D enotes th a t the refrigerated cargo installation o f
LR and, in addition, the w hole o f the m achinery has RMC a ship classed w ith LR and has been constructed,
been installed and tested under L R 's Special Survey installed and tested under LR ’s Special S urvey in
in accordance w ith LR 's Rules. a ccordance w lth the relevant requirem ents o f the
Rules.

Lloyd's D enotes that the reírig erated cargo installation of a

R CM ship is olassed w ith LR and th a t the installation has
been found to be e quivalent to th e re quire m e nts o f
the R ules and has been tested in a ccordance w ith
the relevant requirem ents o f the Rules.
■íLloycCs This notation is assigned to a liquetied gas carrier
RCM (LG) or tanker olassed w ith LR in w hich reliquefaction
or retrigeration e qu ip m en t is approved and titted
tor cargo te m perature and pressure control. vvhere
the equ ip m en t has been constructed, installed and
tested in a ccordance w ith the relevant requirem ents
o f the Rules.
L lo y d ’s This notation is assigned to a liquefled gas carrier
RCM (LG ) or ta n ke r classed w ith LR in vvhich reliqueíaction or
certiíied Container securing Lbp retrigeralion e qu ip m en t is titted fo r cargo te m perature
arrangement and pressure control, vvhere the equ ip m en t has been
SCM found to be equ iva le n t to the requirem ents o f the
R ules and tested in accordance w ith the relevant
fL M C UMS requirem ents o f the Rules.
* Lloyd's RMC IG S This notation w ill be assigned to a ship classed w ith
Eq.Ltr-T ; Cable: 467.5/38.0 U3 LR w hen the ships is intended fo r the carriage o f oil
in bulk, or fo r th e ca rria g e o f liquid ch em icals in bulk
and is fitted w ith an approved system fo r producing
LM C N otation assigned w hen the propelling and essential g as and fo r inerting th e cargo ta n ks in a ccordance
auxlliary m achinery has n either been constructed nor w ith the requirem ents o f LR 's Rules.
installed under LR's Special S urvey but the existing
m achinery, its installation and arrangem ent, have In all instances vvhere the notation is shovvn
been testéd and found to be acceptable by LR. in parentheses it denotes that the class has
been temporarlly suspended
■iOMC Notation

OMC D enotes th a t the m achinery w as built and installed

Lloyd’s Register - Class Notations (Equipment Letter,
MBS* under the supervision o f the surveyors to the R ules Cable Details)
o f the British C orporation or o f LR respectively. The E quipm ent Lette r (A, A t , B*. etc,), determ ined by LR's
Rules, is displayed in ita lics pretixed by 'E q .L tr'. T h is is
UMS This notation m ay be assigned to a ship classed with follow ed by the length (m etres) and d ia m e te r (m illim etres) o f
LR w hich can be operated with the m achinery spaoes the Chain cable, prefixed by ‘C able’ and then the grade of Chain
unattended and th a t the control equipnnent has been cable. T h e dim ensions and grad e o f oable are also displayed
arranged, installed and tested in accordanoe with in italics. If the Chain cable is m ade up of more than one part
LR s Rules. the dim ension sets are d isplayed w ith a ‘pt’ separator.

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W hen show n in parentheses the Equipm ent Letter denotes of the ship (e.g. forward section, after section, main
that the actual equipm ent num ber permitted by the Rules cargo sectlon) ís involved then the ‘Date of Build’
differs fro m the calculated e quipm ent number. associated with each major portíon of the ship shall
The ch a ra cte r sym bols U1, U2, U3 and U4 denote the grades be Indicated.
o f Chain c ab le (other than vvrought iron or mild Steel fire-
vvelded) as detìned in LR's Rules. W hen the shipbuilder is unknow n is displayed. In the
event that only the place, region or country is know n this will
Lloyd's Register - Class Withdrawal be displayed preíixed by e ither ‘in’, 'at' or 'on'.
W hen a sh ip becom es disclassed, either at owner’s request
o r w ithdraw n by LR, the general class field will display LR in
parentheses. All LR class related details w ill be deleted and in Multiple Builder Details
th e ir place the notation ‘■íClassed LR until - date' or 'Classed
LR until - date' w ill be displayed.

1976 B.v. Scheepswerf en Machínetabriek “Vahalli”

561 Class; (LR) (AB) 1955-06 Gendt (Aft section) Yd No: 730
177 ỉ-C lassed LR u n it 10/63 1976 B.v. Scheepswerven v/h H.H. Bodewes -
787 J Loa Millingen a/d Rijn (Fwd section)
Lbp Loa 120.00 B re x 19.03 Dght 4.500
Lbp 112.00 Brmd 19.00 Dpth 6.00
VVelded, 2 dks

LR D isclass Notation
Yard Number
The S h ip b u ild er’s number, know n as yard or hull number, is
5. Hull displayed fo r the hull section, prefixed by 'Yd N o:’. VVhere
conslruction m ay involve m ore than one hull section or builder
Date of Build each ship b u ild er's num ber is recorded.
The date o f build is displayed in bold and retlects the actual
com pletion date or an estim ate in the absence o f contirm ed Conversions
data. D etails o f ship conversions are recorded, listing the previous
(In the a bse n ce o f date changes being advised, an estim ated shiptype and date, prefixed by 'C onverted from :'. VVhere a
date has been included). ship has been converted more than once the conversions will
In the e ve n t that there has been a signiíicant interval between be recorded in reverse chronological order. (In the absence
the launching and the com pletion a nd/or com m issioning o f date changes being advised, an estim ated date has been
o f the ship, dates m ay be recorded in parentheses after included).
the ship b u ild er preílxed by one o f the following; 'launched',
Alterations
'com pleted', 'com m issioned', 'lengthened & com pleted',
D etails o f alterations (lengthened etc.) are recorded, listing the
're asse m b le d ' 're-erected', ' assem bled’ o r 're-built'.
type o f alteration and date, W here m ore than one alteration
Shipbullder takes place at the sam e tim e these will be grouped together.
The shipbuilder and place o f build are đisplayed in bold type (In the absence o f date changes being advised, an estim ated
after the date o f build. The underlined letter in each shipbuilder's date has been included).
name indicates the sort letter under vvhich the entry appears in
LENGTH OVERALL/REGISTERED LENGTH
the S hipbuilder and Existing Ships Index. This normally records
The extrem e length o f the ship, recorded in m etres to two
w here the hull o f the ship w as built, W here a ship has major
decim al places, is displayed, prefixed by 'Loa'. A dash (-)
w ill be displayed vvhere confirm ation o f the length overall is
aw aited. VVhere the overall length is follow ed by the notation
'B B ' this indicates that the ship has a bulbous bow. In these
instance the recorded m easurem ent includes any protrusion
o f th a t bow.

Yd No: 20, Multiple Builder Details

Loa 81.97 B rex Dght 4.925
Lbp 76.21 Br md I 18.01 Dpth 7.12
Welded, 2 dks
1959 Scheepsbouw- en Construstiebedr. K.
Hakvoort N.v.-Monnickendam (Hull
launched by) --------------------------
Yard Number 1959 Nordhavnsvaerft A/S -Kobenhavn (H{
completed by)
hull sections constructed by other builders, the date o f buíld, Loa 30.40 ^ re x
ship b u ild er and place o f build, hull section, construction date Lbp 26.38 \m d
detail and yard num ber are recorded.
VVelded, 1 dk \
lA C S Procedural R equirem ents 1996 - No. 11 It
should be noted that vvhere modiAcations, possibly
extensive, have been carríed out, the original ‘Date
of Build’ shall remain asslgned to the ship. VVhere a Construction Date Details
complete replacement or additíon of a major portion

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lf the length overall is not available, th e registered length, as

given on the ship's certiíicates, m ay be recorded, preíixed by Registered Length
'Lreg'.

Length Betvveen Perpendículars Alterations

The length betvveen perpendiculars, recorded in m etres to Conversions
tw o decim al places, is displayed, pretixed by 'Lbp'. A dash (-)
w ill be displayed w here coníirm ation o f the length between
perpendiculars is awaited. This is the distance on the sum m er
load vvaterline from the fore side o f the stem to the a fte r side
AS Framnae/Mek. Vaerksted andefjord
o f the rudder post, or to th e centre o f the rudder stock if there Yd No: 14-ư
is no rudder post.
Converted from: Whale-catcher-1966
Extreme Breadth .Lengthened-1975 ^ ------------------
The extrem e breadth, recorded in m etres to tw o decim al
places, is dispiayed, preílxedby 'Brex'. A dash (-) w ill be
Lreg 55,58 B re x 9,05 Dght 4.877
displayed vvhere coníirm ation o f the extrem e breadth is Lbp 44.02 Brmd 9.00 Dpth 7.57
awaited. This is the m axim um breadth to th e outside o f the
VVelded, 2 dks
sh ip ’s structure.

Moulded Breadth Á .
The m oulded breadth, recorded in m etres to tw o decim al
places, is displayed, pretixed by B rm d’. A dash (-) w ill be
X
Construction Deck Details
displayed vvhere contlrm ation o f the m oulded breadth is
avvaited. This is the greatest breadth at am idships from heel o f
fram e to heel o f fram e Decks
D etails on the num ber and type o f decks are displayed after
Maximum Draught the construction intorm ation.
The maximum draught, recorded in metres to three decimal
places, is displayed, prefixed by 'Dght'. A dash (-) will be displayed The abbreviations and their descriptions can
where coníirmation of the maxim um draught is avvaíted. In most be found in the sectíon ‘Abbreviations used
cases this is the maximum draught amidships, but in som e ships in the Register'
o f special constm ction the maxim um draught is measured at
the deepest point o f the hull or any fixed appendages, and this 6. Shiptype/Cargo Pacilities
m easurem ent is recorded, where deíined.
Shiptype
The description o f the ship is displayed ín bold type and
indicates the basic type o f th e ship (i.e. tanker, tug, general
cargo ship). It should be noted th a t these are not classiíìcation
notations, (for íu rth e r iníorm ation on shiptypes please visit
w w w .lrfairplay.com )

Hull Material
Hull m aterial is displayed, prefixed by 'H ull m aterial:', w hen a
ship is constructed from a m aterial o ther than Steel. U nless
othenAíise stated, ships are o f Steel construclion

Hull Type
Details o f specialised hull types are recorded vvhere applicable.
For instance T rip le H uir 'S p lit H uir.
Loa 243. B rex 42,03 Dght 14.817
Lbp 234. Brmd 42.00 Dpth 23,24
Double Hull Notation
VVelded,
Shiptype
i Special Peatures

Breadth M oulded

Depth (A22A2BB) Bulk/Oil Carrier (OBO)

Double Hull construction ^ --------
C O W IG S SB T str. Heavy cargoes
Grain: 124,309; Liq(Oil): 126,159
Moulded Depth Compartments: 7 Ho/Ta, E R
The m oulded depth, recorded in m etres to tw o decim al places, 7 Ha: (13.7 X 13.1)6(15.4 x 18,1)ER
is dispiayed, prefiX6d by ‘ Opth’. A d s s li (-) W ill bfc tíisplayed
w here coníìrm ation o f the m oulded depth is awaited. This is
the vertical distance at am idships from the to p o f the keel to Capacities
the top o f the upper d eck beam at side.

Construction Ship Subtypes

The construction o f the ship is displayed and is recorded as The ship subtypes are displayed, w here applicable, and
one o f the follow ing:- indicate in m ore detail the know n speciíic tunction of the ship.
yvelded
Riveted Double Hull
RivetedA/Velded VVhere ships have been constructed w ith double skin sides
Bonded and double bottom s, the description 'D ouble Huir w ill be
displayed. For tankers w here it is know n th a t these com ply

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w ith the requirem ents o f IM O Regulation 13F the description th a t a ship has ram ps w ith different dim ensìons these w ill be
■Double Hull (13F)' w ill be displayed. displayed sequentially.

Special Peatures Lanes - The total m axim um linear lane length, the m axim um
S pecial fe a tu re notations are displayed fo r ships with specitic width o f ro-ro lane and the maxim um deck head clearance
shiptype ía cilitie s or strengthening. For exam ple 'F-S Ice betvveen adjacent fixed or m ovable decks are displayed, in
R ules N otation', ‘pt higher tensile S te e l’, 'Str. Heavy cargoes', m etres, where known. The dim ensions for length, width and clear
'D B ' (D ouble bottóm ), 'SBT' (Segregated ballast tanks), etc. height are pretixed with 'Len', 'W id' and ‘C lr Ht’ respectively
In addition L loyd’s R egister Ship R ight notations are displayed
Vehicle C ounts - The details of vehicle counts are displayed,
w here a ship com plies on a voluntary basis with the applicable
prefixed by the types o f vehicle. For exam ple 'C ars', 'Lorries',
requirem ents o f the Procedures fo r the Design, C onstruction
T ra ile rs ’, 'Rail vvagons' etc.
and Litetim e C are o f Ships.
Capacítíes
The abbreviatíons and their descriptions can
Details o f cargo capacities are recorded, prefixed by the
be found in the sectíon ‘Abbreviations used
appropriate types. The key deíinitions are as follow s:-
in the Register’
Grain: The capacity o f cargo spaces, m easured to outside
Passengers o f fram es, to top o f ceiling and to top o f beams,
D etails o f th e num ber o f passengers a ship is licensed to including hatchvvays. This does not include insulated
carry are recorded, preflxed by 'Passengers:' and are detined spaces or spaces allocated to containers. Grain
by 'deck', 'unberthed', 'berths' and 'd rive r berths'. W here capacity is m easured in cubic metres.
coníirm ation of individual categories is awaited the total B a le : The capacity o f cargo spaces, m easure to inside of
num ber o f passengers is given. cargo battens, to top of ceiling and to underside of
beam s, including hatchvvays. This does not include
spaces allocated to containers. Bale capacity is
m easured in cubic metres.
For insulated (Ins), liquid (Liq), liquid gas (Liq(G as)), liquid
oil (Liq{O il)). a sphalt (asphalt), ore (ore) and hopper (hopper)
the capacities are also m easured in cubic metres. Imperial
e quivalents are given to retlect industry slandards, w here
appropriate.
Liquid and liquid oil capacities are recorded, w here known
as 98% o f the total volum e o f the cargo carrying capacity,
allovving 2% fo r expansion.
W here know n intorm ation on cargo heating coils is recorded.

Container Details
For a Container ship (fully cellular) or part Container ship
Container details expressed in TEU (tw enty foot equivalent
units), are displayed as follow s:-
c. Total carrying capacity in TEU. This intorm ation
is only recorded w hen the separate num ber o f
laden containers carried in holds and those on
d eck is avvaited.
RO/RO Pacilities C.Dk, C arrying capacity in TEU on vveather deck.
Details o f ram ps, lanes, vehicle counts are recorded fo r ships C.Ho. C arrying capacity in TEU in holds.
w ith R o/Ro íacilities. Cell.Ho, Holds titted w ith fixed cellguides fo r the carriage
o f laden containers.
R am ps - The num ber and type o f ramps, position, length,
width and safe w orking load are displayed w here knovvn.
The dim ensions fo r length, w idth and safe w orking load are
prefìxed w ith 'Len', 'W id' and 'Sw l' respectively. In the event

Passenger Details —I (A33A2CC) Container Ship (Pully

^Cellular)
TEU 3484 C.3484/20’ incl. 300 ref,c
Compartments: 7 Cell Ho, ER , 1 Cell Ho
<C^(A36A2PR) Passenger/Ro-Ro Ship (Vehicles) 15H a:ER
íce strengthened
Passengers: unberthed 544; cabins: 110;
berths: 406; C om partm ent Details
1 Bow door/ramp Hatch Details
Len: 8.3 Wid:4.5 Swl: 80.0
1 stern door/ramp c.Ro-R o Dk. C arrying capacity in TEU containers on internal
Len: 8.3 Wid:4,5 Swl: 80.0 decks accessed by doors and ramps.
Lanes-Len: 123 Wid; 9.00 Clr Ht:4.40
In all instances the values are inclusive o f any reírigerated
Lorries: 6, Cars: 72 units.

Compartments (Holds)
D elails o f the n u m b e ra n d types o f com partm ent are recorded,
together w ith specific m aterial w here appropriate, VVithin the
Vehicles Count sequence o f hold inform ation 'ER ' indicates the position of
the engine room. Hold intorm ation is displayed preíixed by
'C om părtm ent'.

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Manlfold
The abbreviatíons and their descriptions can The distance betvveen the bow and the centre m aniíold is
be found in the sectíon ‘Abbreviations used recorded in metres, preíixed by 'M anifold: Bow/CM '.
in the Register'
7. Machinery
Compartments (Tanks)
D etails o f the number, type, design, m aterial, shape and Summary
a lignm ent are recorded. VVithin the sequence o f tank A su m m ary. listing the num ber and prim e m over type (in bold),
inform ation 'ER ' indicates the position o f the engine room. gearing iníorm ation, num ber o f shafts and the num ber and
Tank iníorm ation is displayed preíixed by ‘C om p a rtm e n t’. propeller type, is displayed. For diesel eiectric installations the
num ber o f main generators and ele ctric m otors are recorded^
Main generator output fo r each unit is displayed in kilovvatts
(kW). The total electric m otor output is displayed in shaft
Cargo Capacity horsepovver (shp) and kilow atts (kW).

Total Prime Mover Power

(A12B2TR) Chemical/Products Tanken The total output o f the prim e m overs is displayed in kilow atts
(kW ) and horsepow er (hp), prefixed by T o ta l Power'.

{
ice strengthened
DB Speed
Liq: 20.770 The ship's Service speed is d isplayed to the right of the total
Cargo Heating Coils pow er and is deíined as the speed th a t the ship is capable o f
m aintaining at sea in norm al w ea th e r and a t norm al Service
Comparlments: 20 Ta(s.stl), ER, 10 wing Ta
draught.
/3 0 Cargo Pumps: 6x300ưhr, 16x200t/hr,
Ị 8x100ưhr Prime Mover Design
Manifold: Bow/CM: 71m The design o f each prim e m over is displayed. Ships with more
than one prime m over o f the sam e design and designation will
be grouped together, unless m anutactured or fitted at different
times. W here a ship has prim e m overs o f different designs
these will be recorded individually,
Manifold Details
Cargo Pump Details
Prime Mover Designation
The designation o f the prim e m over is displayed to the right of
the m ain engine design.
The abbreviatíons and theír descriptlons can
be found in the section ‘Abbreviations used
in the Register’ Summary Speed
Hatches
D etails o f the number, position and d lm ensions o f hatches
are recorded. The hatches are given in order, com m encing
at No.1 from forw ard and are grouped by centreline (H a) and 2 oil engines reverse 'uction geared to sc. shatìs iỊriving
wing (W ing H a) and dim ensions. 2 CPpropellers
For tapered hatchw ays only the narrovver breadth Is recorded. 12,2kn
Total Power: 2, 096kW(2,850hp)
Hatch dim ensions are not recorded under 2 m etres. For partial
m easurem ents the dim ension under 2 m etres is represented
Kromhout ^ — ► 9FCHD240
by VVithin the sequence o f hatch intorm ation 'ER ' indicates 2 X 4 stroke 9 Cy, ^ X 260 each\ũ48kW(1,425bhp)
the position of the engine room Stork-Werkspoor Diesel B.v
,AuxGen:2x75kW380V5ỒUz
Cargo Gear
D etails o f the num ber and lirting capacity (S W L) o f a ship's
\Fuel: 278.0 (d.o.)
cargo g ea r are displayed, prefixed by the type (i.e cranes,
derricks, etc.). The num ber o f vvinches is also displayed.

Cargo Putnps
Details o f the num ber and output o f a ship's cargo pum ps are
displayed, grouped by output and pretixed by 'Cargo Pumps'. Engine Builder
The output is recorded either in tonnes per hour ‘t/h r’ or 'm ’ /hr'.

Prime Mover Details

0(7 E ngines - For each m ain eng in e group th e number,
Cargo Capacities Container Details configuration (if vee), stroke cycle, num ber o f cylinders, bore
and stroke dim ensions, are displayed. In the e ven t th a t the
engine w as m anuíactured signiticantly earlier than the ship
then the date o f m anuíacture is recorded. S im ilarly if the
/ General Cargo Ship engine is replaced or re-conditioned dates o f m anuíacture and
/ Ice strengthened Str. Heavy cargoss fittino are recorded, vvhere known.
(In the absence o f date changes being advised, an estim ated
^ ^ G ra in : 32,817; Bale: 31,347 date has been included) The o utput o f each engine is recorded
TEU 598 C.Ho 388/20'(40) C.Dk 210/20’ in kilovvatts (kW ) and brake h orsepow er (bhp).
incl. 42 ref c.
Compartments: 5 Ho, ER, 4 TwDk
9 H a ;9 (1 9 .2 x 8 .0 )E R
Cranes: 6 X 25t; VVinches: 8

Hatch Details C argo Gear

154 Institute of Chartered Shipbrokers

 A p p en d ix I Lloyds Register o f Ships Sample Page

Key to the Register of Ships

Engine Manutacturer
Num ber o f Cylinders The m anufacfurer o f each engine group is displayed.

Engine stroke Auxlliary Generators

Bore stroke The number, rated pow er output and voltage fo r each a uxiliary
~7— Z I= g enerator group is displayed. For 'a .c.’ installations the
4 oil engines with ílẾxible coupỊ) tosc. írequency is recorded in hertz (Hz). A uxiliary generator details
are pretixed by ‘A u xG e n :’. Em ergency sources o f povver and
shatts dĩịving 2 CP propellers.
sets used solely fo r harbour purposes are not recorded.
Total PoA er 16,86ÌkW(22 17.8kn
MAN 7L4Ũ/54 Boilers
2 x 4 à tro k e 7 C y .4 i 92ũkW(6,689bhp) Iníorm ation on boilers is only recorded fo r vessels currently
classed w ith Lloyd's R egister and details are preíixed by
' Kavvasski Heavý Ind
Ẹil 4n/S4 'B oilers:' For each boiler group the number, type, firing type,
Í1ẠN
receiver (rcv) and h eater (htr) details, pressures, superheater
^ 2x4 Strò ke5 C y.400 ■ 3,5 10 kW (4 ,7 7S
Kavvasaki Heavy Ind. Ltd
Auxiliary G enerator Details
\uxgen: 1 X I700kw 450V 60Hz, 2 X 80ũkW450V 60 Hz
iũmsters: 2 Thvvart, FP thrusters ----------------- 7
Fi^l: 6ũ.ũ(d.ũ.) 1570.0(hvf) (Heating Cũils) 4 2 . 8 p ị / 1 oil engines driving 1 PPpropeller
Total Power: 8,090kW(11,Ó00hp) 14.8kn
B&w 6L67GFCA
1 x 2 S tro k e 6 C y .6 7 0 x 1700
Num ber o f Engines Thruster Details
Mitsui Eng. & SB . Co. Ltd
Auxgen: 3 X 54ũkW 450V 60Hz
Gas Turbines - The num ber o f gas turbines and relative
Boilers; e(ex.g) 12,0kgf/cm^ (11.8bar) AuxB o.f. 6.9kgf/cm^
outputs, recorded in kilow atts (kW ) and shaft horsepovver
(shp), are displayed. In the event th a t the gas turbine was
m anuíactured significantly earlier than the ship then the date
o f m anutacture is recorded. S im ilarly if the gas turbine is
replaced o r re-conditioned dates o f m anufacture and titting
are recorded, vvhere knovvn.
(In th e absenoe o f date changes being advised, an estim ated
date has been included).
S leam Turbines - The num ber o f steam turbines and relative
outputs, recorded in kilovvatts (kW ) and shatt horsepovver
(shp), are displayed. In the even t th a t the steam turbine was tem perature and pressure details, and heating surtace
m anufactured signiíicantly earlier than the ship then the date area (m^) are recorded. In the event that the boiler w as
o f m anufacture is recorded. S im ilarly if the steam turbine is m anufactured signiíicantly earlier than the ship then the date
replaced o r re-conditioned dates o f m anufacture and fìtting o f m anuíacture is recorded, S im ilarly if the boiler is replaced or
are recorded, w here knovvn. reconditioned dates o f m anuíacture and fìtting are recorded.
(In th e absence o f date changes being advised, an estim ated W here details o f boilers are recorded in parentheses this
date has been included). indicates that the boiler is tem porarily out o f use.
s te a m R eciprocating Engines - For each steam reciprocating
engine group the number, type, configuration, n um ber of The abbreviations and their descriptions can
cylinders, bore of each cylinder (High, Interm ediate and Low be found in the sectlon ‘Abbrevíatlons used
P ressure) and stroke dim ension, are displayed, In th e event in the Register’
that the engine w as m anuíactured signiíicantly e arlier than the
ship then the date o f m anufacture is recorded. S im ilarly if the Thrusters
Details of special positioning units are recorded prefixed by
T h ru s te rs :'. For each type the number, type and position are
Individual Povver O utput displayed.

Bunkers
Bunker capacities, to g e th er with the daily fuel consum ption,
are recorded in tonnes, preíixed by 'Fuer. VVhere a ship has
heating coils fitted fo r bunker fuel these will be recorded after
4 Gas Turb. Reductìon gea red to sc. ]shafís driving 2 the fuel type.
W aterjets. \
Total Povver: 11.768kW{16,000hp) 1 53.0kn
Avco 1 TF40
4 X Gas Turb. Each-2,942kW(4,000shp)
DelavalTurbine Inc.

eng in e is replaced or re-conditioned dates o f m anuíacture and

titting are recorded, vvhere known.
(In the absence o f date changes being advised, an estim ated
date has been included).
The output o f each engine is recorded in kilovvatts (kW ) and
indicated horsepovver (ihp)

Introduction to Shipping 155

 A p p en d ix i Lloyd’s Register Register o f Ships Sample Page

Abbreviations Used in the Register of Ships

Column Explanation Explanation

&7 LR class character Symbol CA 2&5 Calitornia elec. 7 Electric

(See Key forfu ll explanation) CAC 4 CrevvAccommodation Comfort (LR) EP 4&6 Environmental Protection (LR)

100 LR class character figure CASPPR 4 Canadian Arctic Shipping Pollution Eq.Ltr 4 Equipment Letter (LR)

(See Key for full explanation) Prevention Regulations ER 5&6 Engine room

LR class character Sym bol CBT 6 Clean Baliast arrangements ES 4&6 Enhanced Scantlings (LR)

(See Key for full explanation) cc 4 China Classiíication Society ESN 4 Enhanced Survivability Notation (LR)

LR class character letter CCS or 4 Centralised Control System (LR) - ESN- 4 Notation assigned to a ship that has

(See Key for full explanation) (CCS) {See Key for íull explanation) Hold 1 been assessed for Aooding No.1

LR class character figure ccy 6 Conical cyllndrical hold and complies with or has

(See Key for full explanation) CelLHo. 6 Cellular hold íitted with íixed celtguides been strengthened to comply with

LR class character Symbol CG 4 Cargo gear on ships (LR) the requirements of the relevant LR

(See Key for íull explanation) C lrH t 6 Clear height (RoRo ramps & lanes) Rules

LR class character letter CM 4&6 Construction Monitoring (LR) ESN- Hold 1 with Loading Notation assigned to a ship that has

(See Key íoríu ll exptanation) CO 2&5 Colorađo Restrictions 4 been assessed for ílooding No.1 hold

LR class character letter (Col) 5 Colombia and complies wlth the requirements

(See Key for full explanation) Comb. or 5&6 Combined of the relevant LR Rules by virtue of

British Corporation class characler Symbol comb. imposed loading restrictions.

(See Key for full explanation) COW or 6 Crude Oil VVashing ESN-AII Holds Notation assigned to a ship that has

A. A t, B*, (A), Equipment Letters COW(LR) been assessed íor fl ooding of all

(A t), (B ')e tc, 4 (See Key for full exptanation) CP 7 Controílable pitch (propellers or thruslers) holds and complies vvith or has been

a or (a) 4, 5 ,6 att CQ 2&5 Chongqing Municipality strenglhened to comply vvith the

a.c. 7 Alternating current CR 4 Cargo ramps (LR) requirements of the relevant LR Rule:

ACT 2&5 Australian Capital Territory CR 4 Corrosion Resistant material (LR) ESN-AII Holds with Notation assigned to a ship that has

AB 4 American Bureau of Shipping cs 4 Continuous Survey of the Hull (LR) Loading Restrictions been assessed for flooding of ali

AB 2&5 Alberta (Canada) cs 4 Croatian Regisỉer of Shipping holds

AK 2&5 Alaska CSD 6 Closed Shelter Deck Ship in Hold(s) No. and complies with the requirements

ẰH 2&5 Anhui CT 2&5 Connecticut of the relevant LR Rules by virtue of

AL 2&5 Alabama Cy 7 Cylinders (engine) imposed loading restrictions.

(alu) Aluminium cyl 6 Cylindrical ESP 4 Enhanceđ Survey Programme (LR)

AR 2&5 Arkansas d.c. 7 Dlrect current Est. 5 Estimateđ

(Arg) Argentina d.o 7 Diesel oil ETA 6 Emergency Towing Arrangements (LF

aux 4 ,5 & Auxíliary db 7 Domestic boiter (ex.g) 7 Exhaust gas (boiiers)

AuxB 7 Auxíliary Boiler(s) (LR) DB 5Ẵ6 Double bottom exp 7 Expansion

(See Key for full explanaỉion) DC 2&5 District of Columbia f o r (f) 4 ,5,647 Forward

AuxGen 7 Auxiliary generators dcc 6 Double cylindrícal conical F-S 6 Finish-Swedish Ice Rules notation

AZ 2&5 Arizona dcy 6 Double-lobe cylindhcal fcsa 6 Preight Container securing

B 4 Bridge DD 6 Doubie deck arrangements (LR)

BB Bulbous bow DE 2&5 Delavvare PDA 4&6 Patigue Design Assessment (LR)

BC 2&5 British Cotumbia (Canada) Dght 5 Draught FEU 6 Forty Foot Equivalent Units

BC 4 British Corporation (LR) Diam. 6 Diameter of manifold (containers)

bhp 7 Brake horsepovver Disch. 6 Discharge FJ 2&5 Fujian

{See Key for full explanation) dk or dks 4, 5 & 6 Deck(s) FL 2&5 Plortda

BJ 2&5 Beijing Munidpaiity DP(AA) 4 Dynamic Positioning with fully redundant FP 4 Plash point (in degrees Celsỉus) (LR)

Bow/CM Distance írom bow to centre maniíold aiitom atic control system (LR) FP 7 Fixed pitch (propeller or thruster)

BR 4 Bulganan Register of Shipping DP(AAA) 4 Dynamic Positioning with íuily redundant FSWR 4 Plexible Steel Wire Ropes (LR)

B rex 5 Breadth extreme automatic control syslem and fwd 4,5&7 Forward

Brm d 5 Breadth moulded emergency automatic control system (LR) G 1 -G 5 4 Service Limils (LR)

BS 4 Brítish Corporation class character letters DP (AM) 4 Dynamic Positioning with automatic and GA 2&5 Georgia

- (LR) (See Key for fuH explanation) centraliseđ remole manual control system GD 2&5 Guangdong

btm 4&6 Bottom (LR) Gen or gen 7 Generators

BV 4 Bureau Veritas DP (CM) 4 Dynamic Positioning with centralised GL 4 Germanischer Lloyd AG

BWMP Ballast Water Management Plan (LR) remote manuat cxỉntrol system (LR) GS 2&5 Gansu

c 4 D iim eter c f vvroiight iron cable in DpTa Deep tank GX 2 ỉ 5 G uíngxi 2hu arg AR

sixteenths of an inch (BC Rules) opth 5 Mouided depth GZ 2Ẳ5 Guizhou

c 7 Compound expansion engine dr 7 Double reduction (gearing) HA 2&5 Henan

c. 6 Tota! carrying capacity oí containers DS 4 Deutsche Schiffs -Revision unđ -K!as- Ha 6 Hatchvvays

c. Dk 6 Containers carried on deck siíikation GmbH HB 2&5 Hubei

c, Ho 6 Containers carried in hold(s) DSS 6 Double skin sides HCM 6 Hull Condition Monitoring (LR)

c , Ro/Ro 6 Containers carried on intemal decks DT o r DTs 4.5&6 Deep tank(s) HE 2&5 Hebei

C.Ro/RoDk 6 Containers carried on intemal decks or DTa HI 2&5 Hainan

(CA) 4 Controlled Atmosphere đenotes one or DTf 4, 5 & 6 Deep tank forward HI 2&5 Hawaii

more cargo chambers enclosed in an air- DTm 4. 5 & 6 Deep tank midship HL 2&5 Heilongjiang

tight envelope. (LR) DTma 4. 5 & 6 Deep (ank aft midship HN 2&5 Hunan

CA Where ship is provided with a Controlled DTmf 4,5&6 Deep tank fofward midship Ho 6 Dry cargo hold

Atmosphere system which will maintain dwt 6 Deadweight Ho/Ta 6 Hold/Tank{s}

specitied ranges of oxygen and carbon econ 7 Economiser (Boilers - LR) Ho(comb) 6 Combined hoid

dioxide levels. (LR) e(ex.g) 7 Exhaust gas economiser (Boilers - LR) hp 7 Horsepovver

156 Institute of Chartered Shipbrokers

 A p p en d íx I Lloyds Register o f Ships Sample Page

Abbreviations Used in the Register of Ships

Abbreviatìon Colum n E xp la n a tio n Abbreviation C d um n E xplan atio n A bbreviation Colum n E xplan atio n

7 H ig h P ressure L iq(O il) L iquid oil ca pa city

4 H e lle n ic R e giste r o f Shipping Lloyd's RM C Retrigerated Cargo Installation Class p 4. 5, 6 & 7 P ort

6 H u ll R e novation S che m e (LR) or (Lloyd’s (LR) - (See Key fo r full explanation) PA 2&5 P en n sylvan ia

RMC) PAC 4 Passenger Accommodalion Comíort (LR)

6 H ull R eno va tion S che m e (LR) L !o yd ’s Class fo r reírigerating equipm ent for PCR 4 Períorm ance Capability Rating (LR)

RM C {LG) dealing with boil-off gas on a liquefied PCWBT 6 Protecíive C oatings in W ater Ballast

7 H e atin g suríace (b o ile rs) o r ((Ltoyd’s gas camer (LR) - (See Key for full Tanks (LR )

4 H ig h Speed C raft RM C (LG)) e xpla n atio n ) pd 7 P e r day (fuel co n su m p tion )

7 H e a te r(b o ile rd e ta ils ) LM A 4&6 Lloyd’s Manoeuvring Assessment (LR) PE 2&5 P rince E dw ard Island (C an ad a )

7 H ig h visco sity fuel LM C or 4 Machinery Class (LR) - (See Key for Pm p rm 6 P um p room

7 H o t VVater H eater (L M C ) full e xpla n atio n ) PM S 6 A pp ro ved P lanned M aintenance

7 H e rtz LN 2&5 Liaoníng S che m e (LR)

4 S hip arrangeđ for In VVater Sutvey (LR) LNG Liqu e íied N atural G as PMS(CM) 6 A pp ro ved P la nn ed M aintenance

7 Inte rm e d iate fu e l oit Loa 5 Length overall S che m e based on m ach ine ry

6 lo w a LP 7 L ow P ressure condition m o n itoring (LR )

4 Integrated Bndge Navigatìon System (LR) LPG 5&6 Liqu e fied P etro le um G as PR 4 P olski R e je str statkovv

4 Inte grate d C o m p u te r C o ntrol (LR ) LR 4&6 L loyd 's R e g lste r o f S hipping pri 7 P rism atic

4 Ice C la ss N otatìons fo r g e n e ra l Service Lwr o rlw r 5&6 Lovver P SM R 4 Propulsion and Steering Machinery

(L R ) m 4 .5 & 6 M idship R e d u n d a n c y (L R )

4 Ice C la ss N otatio ns fo r g en eral Service M .B. 2&5 M anitoba (C an ad a ) P SM R * 4 Propulsion and Steering Machinery

(L R ) m^/hr 6 C u b ic m e tre s per hou r R edundancy Located in Separate

MA 2&5 M a ssa chu setts M a ch ine ry S pa ce s(LR )

4 Ice C la ss N otatio ns fo r A rc tic and M chy or 5 ,6 & 7 M ach ine ry pt 4 ,5 & 6 P art

A n ta rc tic S ervice (LR) m chy pv 4 P re ssure/va cuu m re lie f v a lves fo r

MD 2&5 M aryland ca rg o tan ks w ith positíve setting

2Ẳ5 Id a h o ME 2&5 M aine w h e re g re a te r tha n 0.2 bar

4 In te g ra te d Fire P ro te ctio n (LR ) (M ex) 5 M exico QC 2&5 P ro vince o f Q u e b e c (C an ad a )

6 In e rt G as System MI 2&5 M ichigan QH 2&5 Q inghaí

MN 2&5 M innesota Q LD 2&5 Q u e e nsla n d (A u stralia)

4 In e rt G as System MO 2&5 M issouri RC 4 R e gistro C u ba n o de B uques

(S e e K ey fo r full e xpla n atio n ) MS 2&5 M íssissíppi rcv 7 R e ce ive r (b o ile r d eta ils)

7 Ind ica ted horsep ow er MT 2&5 M ontana rec 6 R e ctan gu la r

2&5 Illin o is N 4 E q u ip m e n t n ot required (LR ) Recip. 7 R ecip ro catin g e ngine

2 & 5 Ind ia na NSW 2&5 N e w S outh VVales (A ustralía) ref 6 Ships fitted vvith reírigerated cargo
5 ,6 & 7 Includ in g NT 2&5 N o rth ern T erritory (A u stralian ) ínstallaỉion

2 (S e e K ey fo r full e xpla n atio n ) NAV 4 Lloyd's Navigation Certificate (LR) R e fC . 6 R e írig eraỉe d co nta ine rs

2 (S e e K ey fo r full e xpla n atio n ) NAV1 4 Lloyd’s Navigation Cerlificate for periodic R etract. 7 R etra cta b le

2 (S e e K ey fo r full e xpla n atio n ) O ne M an VVatch (LR ) RI 4 R e gistro Italian o Navale

In m a rs a t- 2 (S e e K ey fo r full e xpla n atio n ) N auxB 7 N e vvA uxiliary B oilers (LR) RI 2&5 R h ode Island

M ini-M NB 2&5 N e w Brunsvvíck (C an ad a ) RN 4 R e gistrul N aval Rom an

In m a rs a t-C 2 (S e e K ey fo r full e xpla n atio n ) NC 2&5 North C arolina RoRo 6 R oll on R oll off

Ins 6 Insu la ted cargo ca pa city ND 2&5 North D akota RP 4 R inave P ortu g ue sa

IP 4 In te g ra te d P ropulsion (LR ) NE 2&5 N ebraska rpm 4 R e volutio n s per m inute

!P 7 Inte rm e d iate P ressure NH 2&5 N e w H a m pshire RS 4 Russian Maritime Register of Shipping

IR 4 Ind ia n R e giste r o f Shipping Ni.stl 6 N ickel Steel s 4,5&7 S tarboard

JL 2&5 Jilin NJ 2&5 N ew Je rse y SA 2&5 S ou th A ustra lia

JR 4 J u g o sla ve n ski R e gista r B rodova NK 4 N ippon K aiji K yokai s .d k 5 S h e lte r deck

JS 2&5 Jia ng su NL 2&5 Newfoundland & Labrador (C anada) (s.stl) o r s.stl 6 S ta in íess Steel

JX 2&5 Uiangxi NM 2&5 N ei M e n gg u (In n e r M on go lia A R ) SB 7 S in gle ^n de d Main Boiler (LR)

K! 4 B iro K la siĩikasi Indonesia NM 2&5 N e w M exico S BP 6 s te a d y B ollard P ull (LR)

kn 7 K nots NR 7 N u cle a r R e acto r S B T o r S BT 6 S eg re g a le d B allast Tanks

KR 4 K orea n R e g is te ro íS h ip p in g NS 2&5 N ova S cotia (C an ad a ) (LR)
KS 2&5 K an sa s NT 2&5 Northvvest T erritories (C an ad a ) S BT/P Lor 6 S eg re ga ted B a lla st Tanks

kW 4&7 Kilovvatts NU 2&5 N u na vu t (C an ad a ) S B T /P L (LR )

KY 2&5 K e n tucky NV 2&5 Nevada sc 4 S ervice C raft
L reg 5 R e giste re d length NV 4 D et N orske V eritas sc 2&5 S ou th C arolina

L.S- '0 '. 4 L o a ding S eq u en ce A cce le ra te d (LR) NX 2&5 N ingxia Hui A R sc 2&5 Sichuan

L ,s . T . 4 Loa ding S eq u en ce N orm al (LR) NY 2&5 N e w York S ta te sc. shaft(s) 7 S cre w shaft(s)
LA 4 Litting A pp lia n ce (LR ) (N Z) 6 N e w Z e alan d SCM 4&6 Screwshafl Condition Monitoring (LR)

LA 2&5 Louisíana o.f. 7 Oíl fu e l o r oil-fired boilers SD 2&5 S ou th D akota

Lake S S 4 Periodical Survey of ship classed for Great O BO 5 Ore/BulkyO il SD 2&5 S ha ndong

L a ke s S ervice (LR) OH 2&5 O hio SDA 4&6 stm ctu ra l Design A ssessm en t (LR)

Lbp 5 Len gth betvveen perpe nd icu la rs OK 2&5 O klahom a SDS or 6 S O Ư \S D am age S tability

LD C 4 L ig h t D isp la cem en t C raft ON 2&5 O nta rio (C an ad a ) SDS(LR)

Len 6 Len gth (R oR o ram ps & lanes) OR 6 O regon SEA 6 S hip E vent A n a lysis (LR )

LI 4&6 L oa ding Instru m e n t (LR ) O SD 6 o p e n S h e lte r D eck S hip S EA (H SS ) 6 Sea Event Analysis (Hull Surveillance

Liq 6 L iqu id ca rg o ca pa city OSD/CSD 6 O pe n & C lo se d S h e lte r D e ck S hip S yste m ) (LR)

Liq(Gas) 6 Liquíd g a s ca pa city O U/O I 4 LR cla ss ch a ra cte r letters S E A (R ) 6 Ship Event Analysis with Continuous
Data Recording Capability (LR) (S ee K ey fo r full e xpla n atio n )

Introduction to Shipping 157

 A p p e n d ix I Lloyds Register Register o f Ships Sample Page

Abbreviations Used in the Register of Ships

A b b re via tion Colum n E xp la n a tio n Abbreviation Column E xplan atio n A bbre via tion Colum n E xplan atio n

(stl) or stl 5&6 Steel

SEA(VDR) 6 Sea Event Analysis (Voyage Data str 6 Strengthened U 1 .U 2 .U 3 4 G radesof Chain cable(LR)

Recorder System) (LR) Swl 6 Safe working load (RoRo ramps) or U4

SERS or Ship Emergency Response SeA^ice SWATH 4&6 Small vvatetplane area twin-hull Udk 5 upperdeck
SERS(LR) sx 2&5 Shanxi (UK) 6 United Kingdom

SG 4,6&7 specifi c gravity T 6&7 Tonnes(IOOOkg) UMS or 4 Unattended Machinery space (LR) -
SH 2&5 Shanghai Munícipality T/cm 3 Tonnes per centimetre immersion (UMS) (S eeK e yío ríu lle xplan atlo n )
shp 7 S hafl horsepower T/hr 6 Tonnes per hour upr. or upr 5 & 6 Upper

Ship Type 4 Notations assigned to chemical tankers T/m^ 4 Tonnes per cubic metre UT 2 & 5 utah

1.2&3 which comply with relevant requirements of Ta 4&6 Cargo tank V 7 Volts

LR's Rules. (LR) Ta-Cln 6 Clean baliast tank VA 2 & 5 Virginia

Ship Type Notatíons assigned to chemical tankers Ta-Seg 6 Segregated ballast tank VIC 2& 5 Victoria (Australia)

r , 2*&3* vvhich comply with relevant requirements TAS 2&5 Tasmania (Australia) VR 4 Vietnam Register
of LR's Rules, where the International TC 4 Temperature Controí (LR) VT 2 & 5 Vermont

certificate of íitness is to be issued by an TCM Main steam Turbine Condition WA 2&5 VVesternAustralia
authority other than LR. (LR) Monitoring (LR) WA 2 & 5 VVashington State
SK 2&5 Saskatchevvan (Canada) TEU 6 Tvventy Foot Equivalent Units Wl 2S5 VVisconsin

Slop Ta 6 Slop tank TJ 2&5 Tianịin Municipality Wl 4 VVrought Iron cable

SM Ror 4 Steering Machinery Redundancy (LR) TN 2&5 Tennessee Wid 6 VVidth (RoRo ramps & lanes)
SMR* TOC 4 Transíer o f Class Wing Ha 6 Wing hatches
SN 2&5 Shaanxi TOH 7 Thermal Oil Heater WTAuxB 7 VVater Tube Auxiliary Boiler (LR)

(Sp) 5 spaín Top Ho 6 Dry cargo hold topside WTB 7 Water Tube Main BoiÌer(LR)
sph 6 Spherical Topside Ta 6 Cargo tank topside W ldb 7 VVater tube domestic boiler (LR)
SPM 4 Single Point Mooring tr 7 Triple reduction (gearing) wv 2&5 West Virginia

spt 7 Superheater (boilers) (LR) TL 4 Turk Loydu WY 2&5 VVyoming

SQ 4 Special Quality Steel Cable turb. 7 Turbine XJ 2&5 Xinịiang Uygur AR

sr 7 Singie reduclion (gearing) Twd 4&5 ‘Tvveen Oeck Tank(s) xz 2&5 Xizanđ (Tibet)

ss 4 special Survey (LR) Twd 6 Tvveen Oeck Space Yd No 5 Shipbuilđer yard number
ssc 4 Special Service Craít TX 2&5 Texas YN 2&5 Yunnan

s t or STs 6 Siđe Tank(s) TypeA, 4 Notations reíer to chemical cargoes YT 2&5 Yukon Territory (Canada)
stbd 4. 5 . 6 & 7 starboard BSC íor the carriage of vvhich the ship ZJ 2&5 2hejiang
has been approved (LR)

158 Institute of Chartered Shipbrokers

 A p p en d ix 2 Stovvage Pactors

Imperial - 40 cubic feet (Ft^)/t ton Metric - 1 Cubic metre (M^)/tonne

Conversion - 1 M^/Tonne = 35.314843 Ft^/ton

Commodity Pt^/ton M^/tonne Remarks

Pig Iron 11 0.31

Iron Ore 11 - 17 0.31 - 0.47

Bauxite 20-32 0.56 - 0.89

Sand 11 - 28 0.50-0.98

Scrap Steel 20-40 0 . 5 6 - 1.11

Salt 29-40 0.81- 1. 12

VVater 36 1.00

Cement 23-29 0,67-0.99

Sulphur 27-36 0 . 7 4 - 1.00

China Clay 38-48 0 . 9 4 - 1.34

Coal 40-58 1.11 - 1.53 lf temperature exceeds 55“, head for nearest
port. Do not use vvater at sea - use inert gas if
available
Fertilizers 27-43 0 . 8 3 - 1.15

VVheat in bulk 47-49 1.31 - 1.37

VVheat in bags 52-54 1 . 4 5 - 1.50

Urea 47-55 1 . 1 7 - 1.56 Aform of fertiiizer in granules, bead or prills

Petroleum Coke 48-55 1 .2 5 - 1.67 Not hazardous if loaded belovv 54“

Canned Goods 55-60 1 . 5 3 - 1.61

Oranges in cases 85-90 2.37-2.51

Oranges in cartons 60 - 65 1 . 6 8 - 1.81

Copra 70-78 1.95-2.18 Smell, iníestation, risk of spontaneous

combustion
VVood Chips 1 1 8 - 160 3 . 0 7 - 4.46

Esparto Grass 180 4.00

Cork 200 5.57

Introduction to Shipping 159

A p pendìx 1 Stowage Pactors

160 Institute of Chartered Shipbrokers

 A p p en d ix 3 List o f Charter Parties

VOYAGE CHARTERPARTIES
Code Name

CEMENT standad Voyage Charterparty for the ‘ CEMENTVOY

Transportation of Cement and Cement
Clinker in Bulk
COAL Americanised VVelsh Coal Charter AMVVELSH 93

The Baltic & International Maritime Council POLCOALVOY

Polish Coal Charter 1971

Japan Shipping Exchange Coal Charter NIPPONCOAL

FERTILIZERS UK Chamber of Shipping Fertilizer Charter PERTICON

1942

North American Fertilizer Charter 1978 PERTIVOY 88

Amended 1988

Qatar Fertilizer Company Charter QAPCOCHARTER

GENERAL Baltic & International Maritime Council *GENCON

General Charter (Revised 1922, 7 4 ,7 6 ,‘94)

World Food Programme Charter WORLDFOOD

GRAIN Australian VVheat Charter 1990 AUSTVVHEAT

Continent Grain Charter (Prench) SYNACOMEX 90

North American Grain Charter 1973 NORGRAIN 89

Amended 1989. Issued by Association of
Ship Brokers & Agents (ASBA) U.S.A.

Grain Voyage Charter 1966 (Revised 1974) ‘ GRAINVOY

123

Introduction to Shipping Ì6 I
 A p p en d ix 3 List o f Charter Parties

ORE Japan Shipping Exchange, Iron Ore Charter NIPPONORE

Baltic & International Maritime Council Ore ‘ OREVOY

charter

STONE UK Chamber of Shipping stone Charter 1920 PANSTONE

(Amended 1925, '59, '74, ‘95)

W OOD Baltic & International Maritime Council Baltic *NUBALTWOOD

Wood Charter 1973 (Revised 1997)

Russian VVood Charter *RUSSWOOD

Japan Shipping Exchange, Charterparty for NANYOZA1997

Logs

TIME CHARTERPARTIES

Baltic & International Maritime Council *BALTIME1939

Unitorm Time Charter (Amended 1950, 74 and 2001)

Baltic & International Maritime Council Deep ‘ LINERTIME

Sea Time Charter for Liners

Baltic & International Maritime Council Time *BOXTIME

Charter for Container Ships

New York Produce Exchange Time Charter NYPE 93

Baltic & International Maritime Council *BARECON 89

Bareboat Charter

N.B. This is'a small selection of the many Standard charterparty forms in
circulation. All the above have either been Agreed or Adopted by The Baltic &
International Maritime Council (BIMCO), those marked * actually compiled
and published by BIMCO.

162 Institute of Chartered Shipbrokers

 A p pendix 4 BALTIME1939 (as revised 2 0 0 1)

1. Shipbroker BIMCO UNIPORM TIME-CHARTER

(AS REVISED 2001) IM P
CODE NAME: “BALTIME 1939”
PARTI
2. Place and date ofCharter

3. Owners/Place of business 4. Charterers/Place of business

5. Vessers Name 6. GT/NT

7. Class 8. Indicated brake horee power (bhp)

9. Tũtaltonsd. w. (abt.)on summer treeboard 10. Cubic feel grain/bale capacity

11. Permanent bunkers (abt.) 12. Speed capability in knots (abt.) on a consumption in tons (abt.) of

13. Present posilion 14. Period of hire (Cl. 11

15, Port of delivery (Ql. 1) 16. Timeofdelivery (Ọl, 1)

17. (a)T rad e limits (Cl. 2\

(b) Cargo exclusions specially agreed

18. Bunkers on re-delivery (State min. and max. quantityXỌI, 5) 19. Charter hlre(ỌI, ộ)

20. Hire payment (State currency, melhod and place of payment; also beneteary and bank account) (Cl. 6)

21. Place or range of re-delivety (Cl. 7) 22. Cancelling date(C1.21)

23. Dispute resolution (State 22(A), 22(B) or 22(0; if 22(C) agreed Place of 24. Brokeraae commission and to whom Davable (Cl. 24)
A rbitration must be statedl (Cl, 22)

2S. Numbers of additional clauses coveríng spedal provisions. If agreed

It is mutually agreed that this Contract shall be pertormed subịect to the conditions contained in this Charter which shall include PA RTI as well as PARTII. In the
event of a conflict of conditions, the provisions of PART I shall prevail over those of PARTII to the extent of such conflict.

This đ o cu m en t is a Computer g en e rated B A L T IM E 1939 (revised 2001) form printed by authority of BiMCO. A ny in sertion or deletion to th e form m ust be clearly visible. In the e v en t of a n y
rroditicatíon made to the pre-printed te)đ of this document which is not clearly vísible, the text of the oríginal 6IMC0 approved document shall apply. BIMCO assumes no responsibility for any
loss. đ am a g e or e x p en s e a s a result of đ is c re p a n a e s betw een th e o riginal B IM C O ap p ro v ed đocum ent and this Computer g e n e ra íe đ docum ent.

Introduction to Shipping 163

 A p p e n d ix 4 BALTIME1939 (as revised 200 i )

PARTII
“BALTIME 1939” Unitorm Time-Charter (as revised 2001)
It is a gre e d betvveen the p arty m e n tio n e d in Box 3 a s O w n ers 1 ropes and chain s required by th e cu sto m o f th e p ort fo r 68
o f th e V e sse l nam e d in Box 5 o f th e g ro s s /n e t to n n ag e 2 m ooring shall be fo r the C ha rte re rs' account. T h e V e s s e l 69
indicated in Bũx 6 . classe d as sta te d in B o x 7 and o f indicated 3 shall be íitted w ith w lnches, derricks, w heels a nd o r- 70
brake h orse p o w e r (bhp) a s sta te d in B o x 8 . carrying a bo u t 4 din a ry runners capable o f handling lifts up to 2 to n s. 71
th e n u m b e r o f to n s deađvveight in d ica te d in Box 9 on 5
5. B unkers 72
su m m er tre e b o a rd inclu sive o f b un ke rs, sto re s and 6
The C ha rte re rs at port o f d elive ry and the O w n e rs a t p ort 73
provisions, h a vin g as p e r b u ild e r’s plan a cu b ic-fe e t g rain / 7
o f re-delivery shall take o v e r and pay fo r all fu e l oil 74
bale ca p a c ity a s sta te d in Box 1 0 . e x c lu s iv e o f perm a n e nt 8
rem aining in th e V e sse l's b unkers at current p ric e a t th e 75
bunkers, vvhich co n ta in a b o u t th e n u m b e r o f tons stated in 9
respective ports. The V essel shall be re -de live re d vvith 76
Box 1 1 . and fu lly loaded ca p a b le o f s te a m in g about th e 10
not less than the num ber o f to n s and not e x c e e d in g th e 77
n um b e r o f kn ots ind ica te d in Bũx 12 in g o o d vveather and 11
num ber o f tons o f fuel oil in th e V e s s e rs b un k e rs sta te d 78
sm ooth w a te r on a c o n s u m p tio n o f a b o u t th e n um b e r o f 12
in Box 18. 79
tons fuel oil sta te d in B ũ x 1 2 . n o w in p o sitio n as stated in 13
Box 13 and th e p arty m e ntio n e d a s C h a rte re rs in Box 4 . as 14 6. H ire 80
follow s: 15 The C ha rte re rs shall p ay as hire the rate stated in B o x 81
19 per 30 days, co m m encing in a ccord a n ce w ith C la u s e 82
1. P e rio d /P o rt o f D e liv e ry /T im e o f D e liv e ry 16
ị until her re-de live ry to th e O w ners. 83
The O w n e rs let, and th e C h a rte re rs h ire th e V e sse l fo r a 17
P aym ent o f hire shall be m ade in cash, in the c u rre n c y 84
period o f th e n u m b e r o f c a le n d a r m o n th s indicated in 18
stated in Box 2 0 . vvithout d iscount, e very 30 d a y s , in 85
B ox 14 fro m th e tim e (n ot a S u n d a y o r a legal H olida y 19
advance, and in th e m anner prescribed in Box 2 0 . In 86
unless ta ke n o ver) th e V e s se l is d e liv e re d and placed at 20
deía ult o f paym ent th e Ovvners shall have the rig h t o f 87
the d is p o s a l o f the C h a rte re rs b e tw e e n 9 a.m . and 6 21
w ithd ra w in g the V essel from the Service o f th e C h a rte re rs , 88
p.m ., o r betvveen 9 a.m . and 2 p.m . if on Saturday, at the 22
w itho u t noting any protest and vvithout in te ríe re n c e b y 89
port sta te d in B o x 15 in su ch a v a ila b le berth vvhere she 23
any co urt or any o ther ío rm a lity vvhatsoever a nd w ith o u t 90
can sa íe ly lie alvvays aíloa t, a s th e C h a rte re rs m ay direct, 24
prejudice to a ny claim the Ovvners m ay othervvise h a v e 91
the V e sse l bein g in e v e ry w a y fitte d fo r o rdin a ry ca rgo 25
on the C ha rte re rs und e r the C ha rte r 92
Service. T h e V e sse l sh all be d e liv e re d at th e tim e 26
ind ica te d in Box 1 6 . 27 7. R e-d eliv e ry 93
The V essel shall be re-de live re d on the e xpira tio n o f th e 94
2. T ra d e 28
C ha rte r in the sam e good o rd e r as w hen d e liv e re d to 95
The V e sse l shall be e m p lo ye d in law fu l tra d e s fo r the 29
th e C ha rte re rs (fa ir w ea r and te a r excep ted ) at an ic e - 96
c a rria g e o f law fu l m e rc h a n d is e o n ly b etw e e n safe ports 30
fre e p ort in th e C h a rte re rs ’ option at th e place o r w ith in 97
or p la ce s w h e re th e V e ss e l can s a íe ly lie alvvays aítoat 31
th e range stated in Box 2 1 . betw e e n 9 a.m. a n d 6 p.m ., 98
w ithin th e lim lts sta te d in Box 1 7 . N o live stock nor 32
and 9 a.m . and 2 p.m . on Saturday, but the d a y o f re- 99
injurious, in fla m m a b le o r d a n g e ro u s g o o d s (such as 33
delive ry shall not be a S u n da y o r legal H oliday. 100
acids, e x p lo s iv e s , ca lc iu m C arbide, fe rro Silicon, 34
The C ha rte re rs shall give the O w n ers not less th a n te n 101
n aphtha, m o to r spirit, tar, o r a n y o f th e ir P roducts) shall 35
days' notice at vvhich port and on about w hich d a y th e 102
be s h ip p e d . 36
V essel w ill be re-đelivered. S hould the V e sse l be o rd e re d 103
3. Ovvners' O b lig a tio n s 37 on a vo yag e by w hich th e C ha rte r period will b e e x c e e d e d 104
The Ovvners sh all p ro vid e a nd p a y fo r all p rovision s and 38 th e C ha rte re rs shall have the use o f th e V e sse l to e n a b le 105
VVages, fo r In s u ra n c e o f th e V e sse l, fo r all d eck and 39 them to co m ple te th e voyage, provided it could be 106
E n g in e -ro o m sto re s and m a in ta in h e r in a th o ro u g h ly 40 re asonably ca lculated th a t the vo yag e w ould allovv 107
e ffic ie n t State in hull and m a ch in e ry d u rin g Service. The 41 re de live ry a b o u l the tim e fixe d for th e te rm ina tio n o f th e 108
O w n ers sh a ll p ro vid e w in ch m e n fro m th e cre w to 42 C harter, but fo r any tim e excee d ing the te rm in a tio n d a te 109
o p e ra te th e V e s s e rs c a rg o h a n d lin g gea r, unless th e 43 the C ha rte re rs shall pay the m a rket rate if h ig h e r th a n 110
c re w 's e m p lo y m e n t c o n d itio n s o r local union or port 44 the rate stipulated herein. 111
re g u la tio n s p ro h ib it th is, ỉn w h ich ca s e q ua lified shore- 45
8. C argo S pace
vvinchm en sh all be p ro vid e d and paid fo r by th e 46
The w ho le reach and burthen o f th e V essel in clu d in g
C h a rte re rs 47
law ful d eck-ca p a city shall be at th e C ha rte re rs' d isp o sa l,
4. C h a rte re rs ' O b lig a tio n s 48 reserving prop e r and suff]cient space fo r the V e s s e rs
The C h a rte re rs sh all p ro vid e a nd p a y fo r all fuel oil, port 49 M aster, officers, crew . tackle, apparel, turn itu re ,
c h arg e s, p ilo ta g e s (w h e th e r co m p u ls o ry o r not), canal 50 p rovision s and stores.
ste e rsm en . b oa tag e , lights, tu g -a ssista n ce , co n su la r 51
9. M aster
ch a rg e s (e x c e p t th o se p e rta in in g to th e M aster, o ffice rs 52
The M a ste r shall prose cu te all vo yag e s w ith th e u tm o s t
and cre w ), ca na l, d o c k and o th e r d u e s and charges, 53
desp a tch and shall re nd e r c u sto m a ry a ss is ta n c e w ith
inclu d in g a n y to re ig n g e n e ra l m u n lc ip a lity o r State taxes, 54
the V e sse l's crew . The M a ste r shall be u nd e r th e o rde rs
also all d o ck, h a rb o u r and to n n a g e d u e s at the ports o f 55
o f the C ha rte re rs a s regards em plo ym e nt, a g e n c y , or
d e liv e ry a n d re -d e liv e ry (u n le ss in cu rre d th ro u gh ca rgo 56
oth e r arran g e m en ts. The C ha rte re rs shall in d e m n iíy the
carriecí b s to re d e liv s ry o r a f!e r re -d e liv e ty ), a goncios, 57
O w n ers a g a in st all co n se q u e n ce s or lia b ilitie s a risíng
co m m issio n s, also sh all a rra n g e and p ay fo r loading, 58
fro m the M aster, offtcers or A g e nts signing B ills o f Lading
trim m ing , sto w in g (in clu d in g d u n n a g e a nd shifting 59
or o th e r d o cu m e n ts o r othervvise com plying w ith su ch
boards, e xce p tin g a n y a lre a d y o n boa rd ), unlo a din g, 60
o rders, as w ell a s fro m any irreg u la rity in the V e s s e l's
vveighing, ta llyin g and d e liv e ry o f c a rg o e s, su rveys on 61
papers or fo r overca rrying goo d s T h e O w n ers sh a ll not
hatch es, m e a ls su p p lie d to o ffic ia ls and m en in th e ir 62
be re spo n sible fo r shortage, m ixture, m arks, n o r fo r
Service and all o th e r ch a rg e s and e xp e n se s vvhatsoever 63
N um b e r o f pieces or packages, nor fo r d a m a g e lo or
inclu d in g d e te n tio n and e x p e n s e s th ro u g h q u a ra n tine 64
claim s on cargo ca use d by bad stovvage or othervvise. If
(inclu din g c o s t o f íu m ig a tio n and d isin fe ctio n ). All ropes, 65
th e C h a rte re rs have reason to be dissa tisfie d w ith th e
slin g s and sp e cia l ru n n e rs a c tu a lly used fo r loading 66
cond u ct o f th e M a ste r o r a ny offìcer, th e O w n ers, on
and d is c h a rg in g and a n y sp ecia l gear, inclu d in g special 67
receiving p articulars o f th e com plaint, p rom p tly to
T h is đ o c u m e n t is a C o m p u te r g e n e r a t e d B A L T IM E 1 9 3 9 (re v is e d 2 0 0 1 ) fo rm p rin ted b y a u th o rity o f B IM C O A n y in s ertio n o r đ e le tio n to th e fo rm m u st b e c le a rly vis ib le In e v e n t o f a n y m o d ific a tio n b eing
m a đ e to th e p re -p rin te d te x t o f th is d o c u m e n t vvhich is n o t c le a riy v isib le, th e te x t o f th e o rig in a l B IM C O a p p ro v e đ đ o c u m e n t s h a ll ap p ly . B IM C O a s s u m e s n o re sp o n sib ility fo r a n y lo s s , d a m a g e o r e x p e n s e
c a u s e d a s a re s u lt o f d is c re p a n c ie s b etvv ee n th e o h g in a l B IM C O a p p ro v e d d o c u m e n t a n d this C o m p u te r g e n e ra te d d o c u m e n t

164 Institute of Chartered Shipbrokers

 A p p en d ix 4 BALTIME1939 (as revised 2001)

PART II
“BALTIME 1939” Unitorm Time-Charter (as revised 2001)
investigate th e m atter, and, if nece ssa ry and practicable, 135 loading o r disch a rg in g p la ce fo r fe a r o f th e V e s s e l being 202
to m ake a ch a n g e in th e appointm ents. 136 frozen in a nd/or d am a g e d , he h as lib e rty to sa il to a 203
conve n ien t o pen place and a w a it th e C h a rte re rs ' fre sh 204
10. D irectio ns an d Logs 137
instructions. U nfore se e n d e te n tio n th ro u g h a n y o f a b o ve 205
T h e C h a rte re rs sh all íu rn ish the M a ste r with all 138
cause s shall be fo r the C h a rte re rs ' a c cou n t. 206
instructions and sa iling dire ctio n s and the M a ste r shall 139
keep full and c o rre c t log s a ccessib le to the C harterers 140 15. L o s s o fV e s s e l 207
or th e ir A gents. 141 S hould th e V e sse l be lo s t o r m issin g , hire s h all c e a s e 208
from the date w hen s h e w a s lost. If th e d ate o f lo s s 209
11. S u spensio n o f H ire etc. 142
ca nn o t be ascerta in e d h a lf hire sh all be paid fro m th e 210
(A ) In the e v e n t o f d rydo ckin g o r o ther n ec essary 143
date the V essel w as la s t re po rte d until th e c a lc u la te d 211
m easures to m a in ta in th e efficiency o f the Vessel, 144
date o f arrival at th e d e s tin a tio n A n y hire paid in a d v a n c e 212
d eíiciency o f m en o r O w n e rs' stores, breakdovvn o f 145
shall be adjusted accord in gly. 213
m achinery, d a m a g e to hull or o th e r accident, e ither 146
hindering o r p re ve n tin g th e vvorking o f the V essel and 147 16. O vertim e 214
continuing fo r m o re than tw e nty-fo u r consecutive hours, 148 The V essel shall w ork d a y and n ig h t if re qu ire d. T h e 215
no hire shall be paid in re spe ct o f a ny tim e lost thereby 149 C ha rte re rs shall reíund th e O w n e rs th e ir o u tla y s fo r all 216
during th e perio d in vvhich th e V essel is unable to pertorm 150 o vertim e paid to o ffice rs and c re w a c c o rd in g to th e h ou rs 217
the Service im m e d ia te ly required. A n y hire paid in 151 and rates stated in the V e s s e rs a rtic le s . 218
advance shall be a d ju ste d accordingly. 152
17. L ie n 219
(B ) In the e v e n t o f th e V essel being driven into port o r to 153
The Ovvners shall have a lien u pon all c a rg o e s a n d 220
a nchorage th ro u g h s lre s s o f vveather, trading to shallow 154
sub-freights b elonging to th e T im e -C h a rte re rs and a n y 221
harbours o r to rive rs o r ports w ith bars o r suffering an 155
Bill o f Lading íre ig h t fo r all c la im s u n d e r th is C h a rte r, 222
a ccident to h e r cargo, a ny detention o f the V essel a nd/or 156
and the C h a rte re rs shall h ave a lien on th e V e s s e l fo r all 223
e xpenses re su ltin g fro m such detention shall be fo r the 157
m oneys paid in a d v a n c e and n ot e a rn e d . 224
C harterers' a c c o u n t e ven if such detention a nd /or 158
expenses, o r th e c a u se by reason o f vvhich e ithe r is 159 18. S a lv a g e 225
incurred. be d u e to, o r be contributed to by, the 160 All salvage and a ss is ta n c e to o th e r v e s s e ls s h all b e fo r 226
n egligence o f th e O w n e rs' servants. 161 the Ovvners’ and th e C h a rte re rs ' e q u a l b e n e fit a fte r 227
deducting the M aster's, o ffic e rs ' a nd c re w ’s p ro p o rtio n 228
12. R e s p o n s ib ility a n d Exem p tion 162
and all legal and o th e r e x p e n s e s in c lu d in g hire p aid 229
T h e O w n ers o n ly sh all be responsible fo r d elay in 163
under the c h arte r fo r tim e lost in th e sa lv a g e , a ls o re p a irs 230
delive ry o f th e V e sse l o r fo r d elay during the cu rren cy of 164
o f dam age and fuel oil c o n s u m e d . T h e C h a rte re rs shall 231
th e C ha rte r and fo r loss or dam a g e to goods onboard, if 165
be bound by all m e asu re s ta k e n b y th e Ovvners in o rd e r 232
such delay o r loss has been caused b ỹ w a n t o f due 166
to secure paym e n t o f s a lv a g e and to fix its a m o u n t. 233
d iligence on th e p art o f th e O w ners o r th e ir M ana g e r in 167
m aking th e V e sse l seavvorthy and fitted fo r th e voyage 168 19. S ub let 234
or any o th e r p e rso n a l a ct or o m ission or deía ult o f the 169 The C ha rte re rs shall h ave th e o p tio n o f s u b le ttin g th e 235
Ovvners or th e ir M a na g e r. The O w ners shall not be 170 V essel, giving due n otice lo th e O w n e rs , b ut th e o rig in a l 236
responsible in a n y o th e r case nor fo r dam a g e or delay 171 C ha rte re rs shall alvvays re m a in re s p o n s ib le to th e 237
vvhatsoever and h o w so e ve r caused even if caused by 172 O w ners for due p erto rm a n ce o f th e C ha rte r. 238
th e neglect o r d e fa u lt o f th e ir servants, The Ovvners shall 173
20. W a r ("Convvartim e 199 3 ") 239
not be liable fo r loss o r dam a g e arising or resulting 174
(A ) For the purp o se o f th is C la u se , th e vvords: 240
fro m strikes, lo ck-o u ts o r stoppage or restraint o f labour 175
(i) "O w ne rs“ shall include th e s h ip o w n e rs , b a re b o a t 241
(including th e M a ste r, office rs o r crew ) w he th e r partial 176
charterers, d isponent ovvners, m a n a g e rs o r o th e r 242
o r general. T h e C h a rte re rs shall be responsible fo r loss 177
operators w ho are c h arg e d w ith th e m a n a g e m e n t o t th e 243
o r d am age ca u se d to th e V essel o r to the Ovvners by 178
Vessel, and the M aster; a n d 244
goo d s being loa d e d co ntra ry to the term s o f the C ha rte r 179
(ii) "VVar R isks" shall in clu d e a n y w a r (vvhether a c tu a l o r 245
or b y im p ro p e r o r c a re le ss bunkering o r loading, stovving 180
threatened), act o f w ar, c iv il w a r, h o stilitie s, re vo lu tio n , 246
or disch a rg in g o f g o o d s o r a ny oth e r im pro p e r or 181
rebellion, civil com m otio n , vvarlike o p e ra tio n s , th e layin g 247
negligent a c t on th e ir p art or th a t o f th e ir servants. 182
o f m ines (w he th e r a ctual o r re p o rte d ), a c ts o f p ira cy, 248
13. A dvan ces 183 acts of terrorists, acts o f hostility o r m alic io u s d a m a g e , 249
T h e C h a rte re rs o r th e ir A g e nts shall advance to the 184 blockades (vvhether im po se d a g a in s t all v e s s e ls o r 250
M aster, if re qu ire d, n e ce ssa ry tu n d s for ordinary 185 im posed sele ctive ly a g a in s t v e s s e ls o f ce rta in tla g s o r 251
d is b u rse m e n ts fo r th e V essel's accou n t at any port 186 ovvnership, or aga in st c e rta in c a rg o e s o r c re w s o r 252
charging o n ly in te re s l a t 6 p e r cent p.a., such a dvances 187 othervvise hovvsoever), by a n y p erso n , body, te rro ris t o r 253
shall be d e d u cte d fro m hire. 188 political group, or th e G o v e rn m e n t o f a n y State 254
vvhatsoever, w hich, in th e re a s o n a b le ju d g e m e n t o f th e 255
14. E xcluded P o rts 189
M aster a n d /or the O w ners, m a y be d a n g e ro u s o r a re 256
T h e Vessel shall n ot be o rdered to nor bound to enter: 190
likely to be or to becom e d a n g e ro u s to th e V e sse l, h e r 257
(A ) any p la ce w h e re fe v e r or e pid e m ics are prevalent or 191
cargo, cre w o r o th e r p ers o n s o n b oa rd th e V e sse l. 258
to w hich th e M aste r. office rs and cre w by law are not 192
(B ) The Vessel, unless th e w ritte n c o n s e n t o f th e O w n e rs 259
bound to fo llo w th e Vessel: 193
be first o btained, shall n o t be o rd e re d to o r re q u ire d to 260
(B ) any ice-b o u nd p la ce or any place w he re lights, 194
continue to or through, a n y p ort, p la ce , a rea o r z o n e 261
lightships, m a rks and b uoys are o r are likely to be 195
(w hether o f land or sea), o r a n y w a te rw a y o r c a na l, vvhere 262
w ithd ra w n b y re aso n o f ice on the V e sse rs arrival or 196
it appears th a t th e V e sse l, h e r c a rg o , c re w o r o th e r 263
w h e re th e re is risk th a t o rdin a rily th e V essel w ill not be 197
persons on board the V e s s e l, in th e re a s o n a b le 264
a ble on a c c o u n l o f ice to reach the place or to get out 198
jud g e m en t o f the M a ste r a n d /o r th e Ovvners, m a y be, o r 265
a fte r having co m p le te d loading or discharging. The 199
are likely to be, exposed to W a r R is k s S h o u ld th e V e sse l 266
V e sse l shall n ot be o b lig e d to force ice lf on account o f 200
be vvithin a ny such p lace a s a fo re s a id , w h ic h o n ly 267
ice the M a ste r c o n s id e rs it dan g e rou s to rem ain at the 201
T h is d o c u m e n t is a C o m p u te r g e n e ra te d B A L T IM E 1 9 3 9 (re v is e d 2 0 0 1 ) fo rm p rin ted b y a u th o rity o f B IM C O . A n y in s e tlio n o r đ e le tlo n to th e fo rm m u s t b e c le a rly v is ib le . In e v e n t o f a n y m o d ific a tio n b eing
m a d e to th e p re -p rin te d te x t o f th is d o c u m e n t vvtiich is n ot c le a rly visib le, th e tex t o f t h e orig in al B IM C O a p p ro v e d d o c u m e n t s h a ll ap p ly . B IM C O a s s u m e s n o re s p o n s ib ility fo r a n y lo ss, đ a m a g e o r e x p e n s e
c a u s e d a s a re su lt o f d is c re p a n c ie s b e tw e e n th e o rig in a l B IM C O a p p ro v e d d o c u m e n t a n d this C o m p u te r g e n e ra te d d o cu m e n t.

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b e co m e s d a n g e ro u s, o r is likely to be o r to b ecom e 268 o f the Ovvners' intention to do so and re questing them
d a n g e ro u s , a fte r her entry into it, she shall be at liberty 269 to nom in a te a safe port fo r such disch a rg e. Pailing such
to le a ve it. 270 nom ination by th e C ha rte re rs w ithin 48 hours o f the
(C ) T h e V e s s e l shall not be required to load contra ba n d 271 receip t o f such n otice and request, th e O w n ers m ay
ca rg o , o r to pass th ro u gh a n y blockade, vvhether such 272 d isch a rg e th e c a rgo at a n y safe port o f th e ir ow n choice.
b lo c ka d e be im p o s e d on all vessels, or is im posed 273 (H) lf in c o m plian ce w ith a ny o f th e p rovision s o f sub-
s e le c tiv e ly in a n y w ay vvhatsoever aga in st vessels o t 274 clau se s (B) to (G ) o f th is C la u se anyth in g is d on e o r not
ce rta in fla g s o r ovvnership, or aga in st ce rta in ca rgo e s 275 done, such shall not be dee m e d a devia tio n, but shall
o r c re w s o r o th e rw ise how soever, o r to proceed to an 276 be consid e red as due fulfìlm e n t o f th is C harter.
a rea w h e re she sh all be subject, o r is likely to be su bje ct 277
21. C an ce llin g
to a b e llig e re n t’s righ t o f se arch a n d /or co ntisca tio n . 278
S hould th e V e sse l not be delive re d b y th e d ate indicated
(D ) (i) T h e O w n e rs m ay e ffe ct w a r rlsks Insurance in 279
in Box 2 2 . th e C ha rte re rs shall have th e optio n o f
re s p e c t o f th e H ull and M achinery o f th e V essel and th e ir 280
cancelling. If th e V essel c a nn o t be delive re d by the
o th e r in te re s ts (inclu din g , but not lim ited to, loss o f 281
cancelling date, the C ha rte re rs, if required, shall d eclare
e a rn in g s and d e te ntio n , th e crew and th e ir P rotection 282
w ithin 4 8 hours a fte r receiving notice th e re o t w he th e r
and In d e m n ity R isks), and the p rem iu m s a n d /or ca lls 283
th e y cance l or w ill ta ke d elive ry o f th e Vessel.
th e re ío r sh all be fo r th e ir account. 284
(ii) lf th e U n d e rw rite rs o f such Insurance should require 285 22. D ispute R esolutio n
p a y m e n t o f p re m iu m s a nd /or calls because, p ursu a n t 286 *) (A ) This C ha rte r shall be gove rn e d b y and constru ed in
to th e C h a rte re rs ' o rders, the V essel is vvithin, or is due 287 a c cord a n ce w ith English law and a n y d isp u te arising
to e n te r a n d re m a in w ithin, any area or areas w hich are 288 o ut o f or in co nn e ctio n w ith th is C h a rte r shall be reíerred
sp e ciíie d b y such U nd e rw rite rs as being subje ct to 289 to arbitration in London in a c cord a n ce w ith th e A rb itratio n
a d d itio n a l p re m iu m s b eca u se o f W a r R isks, then such 290 A c t 1996 or a ny sta tu to ry m odifica tio n o r re -en a ctm e n t
p re m iu m s a n d /o r calls shall be reim bursed by the 291 th e re o í save to the e xte n t n e ce ssa ry to give e ffe c t to the
C h a rte re rs to th e O w n ers at th e sa m e tim e as the next 292 p rovision s o f this C lause.
p a y m e n t o f hire is due. 293 The arbitra tio n shall be co nd u cte d in a cco rd a n ce w ith
(E ) lf th e Ovvners b ecom e liable u n d e r the te rm s o f 294 the London M a ritim e A rb itra to rs A sso cia tio n (LM A A )
e m p lo y m e n t to p a y to the cre w any bonus o r additio na l 295 T erm s c u rren t at the tim e w hen th e arbitration
w a g e s in re s p e c t o f sa iling into an area w hich is 296 p roce e d in g s are com m enced.
d a n g e ro u s in th e rnanner d eíined by th e said term s, 297 The re íe ren ce shall be to th re e arbitra to rs. A party
th e n su ch b o n u s o r add itio na l w ag e s shall be re- 298 w ishing to re fe r a disp u te to arbitra tio n shall a p p o int its
im b u rse d to th e Ovvners b y the C ha rte re rs at th e sam e 299 a rb itra to r and send notice o f such a p p o intm en t in vvriting
tim e a s th e n e xt paym e n t o f hire is due. 300 to the o th e r party requiring the o th e r p arty to a p p o in t its
(F) T h e V e sse l sháll have liberty:- 301 ow n a rb itra to r vvithin 14 ca le n d ar d ays o f th a t n otice and
(i) to c o m p ly w ith all orders, dire ctio n s, recom - 302 stating th a t it w ill a pp o int its a rb itra to r as so le a rbitra to r
m e n d a tio n s o r a d vice as to departure, arrival, routes, 303 unle ss the o th e r party a pp o ints its ow n a rb itra to r and
sa ilin g in co nvo y, ports o f call, stoppages, destin a tio ns, 304 gives n otice th a t it h as d one so w ithin th e 14 d ays
d is c h a rg e o f ca rgo , delivery, or in a n y o th e r w a y 305 specified. If th e o th e r party does not a p p o in t its own
w h a ts o e v e r, w h ic h are given b y th e G o ve rn m e n t o f the 306 arb itra to r and give n otice th a t it has d on e so w ithin the
N atio n u n d e r w h o s e flag the V e sse l sails, o r o th e r 307 14 d ays sp ecified, the p arty re fe rrin g a d isp u te to
G o v e rn m e n t to w h o se law s the Ovvners are subject, or 308 arbitra tio n m ay, w ith o u t th e re q u ire m e n t o f a ny tu rth e r
a n y o th e r G o ve rn m e n t, body o r grou p vvhatsoever actlng 309 p rio r notice to th e oth e r party, a p p o int its a rb itra to r as
w ith th e p o w e r to com pel co m pliance w ith th e ir o rde rs 310 sole a rbitra to r and shall advise th e o th e r party
o r d ire c tio n s ; 311 accordingly. T h e aw ard o f a sole a rb itra to r shall be
(ii) to c o m p ly w ith the order, d ire ctio n s o r recom - 312 b inding on both partie s as if he had been appo inted by
m e n d a tio n s o f a n y w a r risks undervvriters w ho have the 313 agreem ent.
a u th o rity to g ive th e sam e und e r th e te rm s o f th e w a r 314 N othing herein shall p reve n t th e p artie s a gre e ing in
risks Insurance; 315 vvriting to v a ry th e se p rovision s to provide fo r the
( iii) to c o m p ly w ith the term s o f a n y resolution o f the 316 a p p o intm en t o f a sole arbilrato r.
S e c u rity C o u n cil o f the U nited N ations. a ny đ ire ctive s o f 317 In cases w h e re n e ith e r th e claim nor a n y coun tercla im
th e E u ro p e a n C o m m u n ity, th e e ffe ctive o rde rs o f a ny 318 e xcee d s the sum o f u s $ 5 0 ,0 0 0 (or such o th e r sum as
o th e r S u p ra n a tio n a l body vvhich has th e right to issue 319 th e p artie s m a y agre e ) th e arbitra tio n shall be co nducted
a n d g ive th e sa m e, and w ith natio n a l law s aim ed at 320 in a c cord a n ce w ith th e L M A A S m all C la im s P rocedure
e n ío rc in g th e s a m e to w hich the Ovvners are su bje ct, 321 c u rren t a t th e tim e w hen th e arbitra tio n p roce e d in g s are
a n d to o b e y th e o rde rs and dire ctio n s o f those w ho are 322 com m enced.
ch a rg e d w ith th e ir eníorcem ent; 323 *) (B ) T h is C ha rte r shall be gove rn e d by a nd c o nstru ed in
(iv ) to d iv e rt and d ischarge at a ny o th e r port any ca rgo o r 324 a c cord a n ce w ith T itle 9 o f th e U nited S ta te s C od e and
p a rt th e re o t w h ic h m ay re nd e r th e V essel liable to 325 the M a ritim e Law o f the U nited S tates a nd a n y dispute
c o n fis c a tio n a s a co nlra b an d carrier; 326 a iis in g o u l o f o r in co nn e ctio n w itii th is C o n tra c t shall
(v ) to d ivert a n d call at a n y o th e r port to c h a n g e th e c re w 327 be referred to th re e p erso n s at N ew Y ork, one to be
o r a n y p a rt th e re o f or oth e r p erso n s on board th e V e sse l 328 a ppointed by each o f th e partie s h ereto, and th e third by
w h e n th e re is re aso n to believe th a t th e y m a y be su bje ct 329 th e tw o so chosen; th e ir decisio n or th a t o f a n y tw o o f
to in te rn m e n t, im p riso n m e n t or o th e r sanctions. 330 them shall be final, and fo r the p u rp o se s o f enforcing
(G ) lf in a c c o rd a n c e w ilh th e ir rights und e r th e to re g oin g 331 a ny aw ard, ju d g e m e n t m ay be entered on an aw ard by
p ro v is io n s o f th is C lause, Ih e O w n ers shall re íu se to 332 a ny co u rt o f co m p e te n t ju risd ictio n . T h e p roce e d in g s
p ro ce e d to th e loa d ing o r disch a rg in g ports, o r a n y one 333 s hall be co nd u cte d in a c cord a n ce w ith th e ru le s o f the
o r m o re o f th e m , th e y shall im m ed iate ly iníorm th e 334 S ociety o f M aritim e A rb itrato rs, Inc.
C h a rte re rs . N o c a rg o shali be disch a rg ed at a n y 335 In cases w h e re neith e r th e claim nor a n y co un tercla im
a lte rn a tiv e p ort vvithout first giving the C ha rte re rs notice 336 e xcee d s th e sum o f u s $ 5 0 ,0 0 0 (o r such o th e r sum as

T h ís d o c u m e n t is a C o m p u te r g e n e ra te d B A L T IM E 1 9 3 9 {re v is e d 2 0 0 1 ) fo n n p rin ted b y a u th o rity o f B IM C O , A n y in s ertio n o r d e le tio n to th e fo rm m u st b e c le a r ly v is ib le , In e v e n t o f a n y m o d iíic a tio n b e in g

m ade 10 t h e p re -p rin te d te x t o f th is d o c u m e n t w h ic h is n ot c le a rly v isib le, th e tex t o í th e o rig in a l B iM C O a p p ro v e d d o c u m e n t s h a ll a p p ly . B IM C O a s s u m e s n o re s p o n sib ility fo r a n y lo ss. d a m a g e o r e x p e n s e
c a u s e d a s a re s u lt o f d is c re p a n c ie s b etvveen th e o rig in a l B IM C O a p p ro v e d d o c u m e n t a n d th is C o m p u te r g e n e ra te d d o c u m e n t

166 Institute of Chartered Shipbrokers

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the parties m ay agree) the arbitration shall be conducted 405 n ecessary to prote ct its interest. 445
in accord a n ce w ith the S hortened A rbitration Procedure 406 (v) E ither party m ay advise the Tribunal that they have 446
o f the S o cie ty o f M aritim e Arbitrators, Inc. current at the 407 agreed to m ediation. The arbitration proce d u re s h all 447
tim e w hen the arbitration p roceedings are com m enced. 408 continue during th e co nd u ct o f the m ediation but th e 448
(C) This C ha rte r shall be governed by and construed in 409 Tribunal m ay ta ke th e m ediation tim e ta b le into a c c o u n t 449
accordance with the law s o f the place m utually agreed 410 w hen setting th e tim e ta b le fo r steps in the arbitra tio n . 450
by the parties and any d ispute arising o ut o f or in 411 (v i) U nless oth e rw ise agreed o r speciíied in the 451
connection with this C harter shall be reíerred to 412 m ediation term s, each party shall b ea r its ow n c o sts 452
arbitration a t a m utually agreed place, subje ct to the 413 incurred in the m ediation and the parties shall sh are 453
proce d u res applicable there. 414 e qu a lly the m ediator's costs and expenses. 454
(D) N otw ithstanding (A), (B) o r (C) above, the parties 415 ( v ii) The m ediation process shall be w itho u t p reju d ice 455
m ay agre e at a ny tim e to refer to m ediation a ny diffe re nce 416 a nd coníidential and no inform ation o r d ocu m e n ts 456
and /or disp u te arising out o f or in connection w ith this 417 disclosed during it shall be revealed to the T rib un a l 457
Charter. 418 e xcept to th e e xte n t th a t th e y are disclo sa ble u n d e r th e 458
In th e ca se o f a d ispute in respect o f w hich arbitration 419 law and procedure governing th e arbitration. 459
has been com m enced under (A), (B) o r (C ) above, th e 420 (N ote: The p a rtie s s h o u ld be aw are th a t the m e dia tio n 460
follow ing shall apply:- 421 p ro c e s s m a y n o t n ece s s a rily interru p t tim e lim its.) 461
(i) E ither party m ay at any tim e and from tim e to tim e 422 (E) lf Box 23 in P art I is not a p p ro p ria te ly filled in, s u b - 462
elect to re fe r the dispute or part o f the d ispute to 423 clause (A ) o f this C lause shall apply. S u b -cla u se (D ) 463
m ediation by Service on the o th e r party o f a w ritten notice 424 shall apply in all cases. 464
(the "M ediation N otice") calling on the o th e r party to agree 425 * (A), (B) a n d (C) are a lternatives: ind ica le a ltern a tive 465
to m ediation. 426 a gre e d in B o x 2 3 . 466
(ii) The o th e r party shall thereupon within 14 ca le n d ar 427
23. G eneral A ve ra g e 467
days o f re c e ip l o f the M ediation N otice coníirm th a t they 428
G eneral A ve rag e shall be settled according to Y o rk / 468
agree to m ediation, in w hich case the partles shall 429
A ntw erp Rules, 1994 and a ny subse q u en t m odiíica tio n 469
th e re atte r agree a m ediator vvithin a íu rth e r 14 ca le n d ar 430
thereof. H ire shall not contribute to G eneral A ve rag e . 470
days, íailing vvhich on the application o f e ithe r party a 431
m ediator w ill be appointed prom ptly by the A rb itralion 432 24. C om m isslon 471
Tribunal ("the Tribunal") or such person as the Trib un a l 433 The Ovvners shall pay a com m ission at the rate sta te d 472
m ay d esignate fo r that purpose. The m ediation shall 434 in Box 24 to th e party m entioned in B ox 24 on a n y h ire 473
be co nducted in such place and in accordance w ith such 435 paid und e r the C harter, but in no case less than is 474
procedure and on such term s as th e parties m ay agre e 436 necessary to co ver the actual expe n se s o f the B ro kers 475
or, in the even t o f disagreem ent, as m ay be se t by the 437 and a reasonable fe e for Ih e ir w ork. If the full hire is not 476
m ediator. 438 paid ow ing to breach o f C ha rte r by e ithe r o f the p a rtie s 477
(ili) lf the o th e r party d o e s not a g re e to m ed iate, that fact 439 the party liable th e re ío r shall ind e m n ity the B rokers 478
m ay be b rought to the attention o f the Tribunal and m ay 440 a gainst th e ir loss o f com m ission. S hould the p a rtie s 479
be taken into account by the Trib un a l w hen allo ca lin g 441 agree to cancel th e C harter, the Ovvners shall in d e m n ity 480
the costs o f the arbitration as betw een the parties. 442 the Brokers aga in st any loss o f com m ission but in su ch 481
(iv ) The m ediation shall not a ffect the right o f e ithe r party 443 ca se the com m ission not to exceed th e brokerage 482
to seek such re lie f or take such steps as it oonsiders 444 on one year's hire. 483

T h is d o c u m e n t is a C o m p u ter g e n e ra te d B A L T IM E 1 9 3 9 {re v is e d 2 0 0 1 ) fo rm p rin ted by a u th o rity o f B IM C O , A n y in sertio n o r d e le tio n to th e fo rm m u st b e c le a rly visib le. In e v e n t o f a n y m o d iíic a tio n b e in g
m a d e to th e p re -p rin le d tex t o f this d o c u m e n t w h ic h is n ot c le a rly vísíb le, th e tex t o f t h e o rig in a l B IM C O a p p ro v e d d o c u m e n t sh all a p p ly . B IM C O a s s u m e s n o re sp o n sib ility fo r a n y lo s s, d a m a g e o r e x p e n s e
c a u s e d a s a re su lt o f d is c re p a n c ie s b e tw e e n th e o rig in a l B IM C O a p p ro v e d d o c u m e n t a n d this C o m p u te r g e n e ra te d d o cu m e n t.

Introduction to Shipping 167

A p pendix 4 BALTIME1939 (as revised 2 0 0 1)

168 Institute of Chartered Shipbrokers

 A p p en d ìx 5 Gencon C harter Party

1. Shlpbroker RECOMMENDED
THE BALTIC AND lhfTERNATX>NAL MARTTTME COUNCIL
UNIPORM G ENERAL C H A K TkR {AS REVISED1922,1976 and 1994)
(To be used fò r trades fo r vvhich no specially approved fo m i is in force) CODE
NAME: “G ENCO N" PART 1

2. Place and date

3 O w ners/P laceofbusiness(C I. 1) 4, Charterers/Place of business (Cl. 1)

5. Vessel s name {Cl- 1) 6. GT/NT(CI. 1)

7. DWT all told on summer load line in metric tons (abt.) (Cl. 1) 8. Present position (Cl. 1)

9, Expected ready to load (abt.) (Cl. 1)

10. Loading port or place (Cl. 1) 11. Discharging potl or place (Cl. 1)

12. Cargo (also State quantity and margin in Owners'option, if agreed; if full and complete cargo not agreeđ S ta te “part cargo" {Cl. 1)

13. Preight rate (also S ta te vvhether íreight prepaid or payable on delivery) (Cl. 4) 1 4 . P re ig h t p a y m e n t (S ta te c u rr e n c y a n d m e th o d o f p a y m e n l: a ls o b e n e íic ia r y a n d
bank account) (Cl, 4)

15. State if vessel’s cargo handling gear shall not be used (Cl. 5) 16. Laytime (if separate laytime fo r load, and disch. is agreed, fill in a) and b). If
total laytíme for load. and disch., fìll in c) only) (Cl. 6)

17 Shippers/Place of business (Cl 6) (a) Laỵtíme for loading

18. A gents(loading)(C I, 6) (b) Laytime for discharging

19. Agents (discharging) (Cl. 6) (c) Total laytime for loading and discharging

20. Demurrage rate and manner payable (loading and discharging) (Cl. 7) 21. Cancelting date (Cl. 9)

22. General Average to be adjusted at (Cl 12)

2 3 . P re ig h t T a x (S ta te if fo r th e O w n e r s ' a c c o u n l (Cl 13 (c )) 24. Brokerage commissíon and to vvhom payable (Cl. 15)

25 Law and Arbitration (S ta te 19 (a), 19 (b) or 19 (c) of Cl. 19; if 19 (c) agreed also
State Place of Arbitration) (if not filled in 19 (a) shall apply) (Cl. 19)

(a) Slate maximum amount for small claims/shortened arbitration (Cl. 19) 26. Additional clauses covering special provisions, if agreed

It is m u tu a lly a g r e e d th a t th is C o n tra c t sh a ll b e p e río rm e d s u b je c t to th e c o n d itio n s c o n ta in e d in th is C h a r le r P a r ty vvhich sh a ll in c lu d e P a rt I a s w e ll a s P a rt II. In th e e v e n l

o f a c o n ílic t o f cxin d itio n s, th e p ro v is io n s o f P a rt I s h a ll p re v a il o v e r th o s e o f P a rt II to th e e x t e n t o f s u c h co n flict.

Introduction to Shipping 169

A p pendix 5 Gencon C harter Party

PART II
“Gencon” Charter (As Revised 1922,1976 and 1994)

1. It is agreed between the party mentioned in Box 3 as the Ovvners of the Vessel named In Box during office hours after 12.00 hours. Notice of readiness at loading port to be given to the
5. of the GT/NT indicaled in Box 6 and carrying about the number of metric tons of deadweight Shippers named in Box 17 or lf not named, to the Charterers or their agents named in Box 18.
capacity all told on summer loâdline stated in Box 7, now In position as stated in Box 8 and Notice oí readiness at the discharging port to be given to the Receivers or, if not known, to the
expected ready to load under this Charter Party aboul the date inđicated in Box 9, and the Charterers or their agents named in Box 19.
party mentioned as the Charterers in Box 4 that: If the loading/discharging berth is not available on the Vessel’s arhval at or off the port of
The said Vessel shall, as soon as her prior commitments have been completed, proceed to loading/discharging, the Vessel shall be entitled to give notice of readiness within ordinary
the loading port(s) or place(s) siateđ in Box 10 0f so near thereto as she may saíely get and offiC8 hours on arrival there, whether In free pratique or not. whether customs cleaređ or
lie alvvays aíloat, and there load a íull and complete cargo (if shipment of deck cargo agreed not. Laytime 0f time on demurrage shall then count as if she vvere in berth and in all respects
same to be at the Charterers' risk and responsibility) as stated in Box 12, which the Charterers ready for loading/ discharging provided thai the Master vvarrants thai she is In fact reedy in
bind themselves to ship, and being so loaded the Vessel shall proceed to the discharging all respects- Time used in moving from the place of wafting to the loading/ discharging berth
poft(s) or place(s) stated in Box 11 asordered on signing Billsot Lading.orso nearthereto as shall not count as laytime.
she may safely gel and lie alvvays afloat. and there deliver the cargo. If. after inspection, the Vessel is íound not to be ready in all respects to load/ discharge time
lost after the discovery thereoí until the Vessel is again ready to load/discharge shall not
2. Owners' Responsibility Clause count as laytime,
The Owners are to be responsible for loss of or damage to the goods or for delay in delivery Time used beíore commencement of laytime shall count.
of the goods only In case the loss, damage 0f delay has been caused by persónal want óf *Indicate altemative (a) or (b) as agreeò, in Box 16-
due diligence on the part of the Owners or their Manager to make the Vessel in all respects
seavvorthy and to secure that she is properly manned, equipped and supplied, or by the 7. Demurrage
personai act or đefault of the Owners or their Manager. Demurrage at the loading and discharging port Is payabíe by the Charterers at the rate slated
And the Ovvners are not responsibie for loss, đamage or delay arising from any other cause in Box 20 in the manner slateđ in Box 20 per đay or pro rata for any parỉ of a đay. Demurrage
vvhatsoever, even from the neglect or detault of the Master ór crew or some other person shall fall due day by day and shall be payable upon receipl of the Owners' invoice.
employed by the Owners on board or ashore for vvhose acts they would, but for this Clause, In the event the demurrage is nol paid in accordance wilh the above, the Ovvners shall give
be responsible, or from unseaworthiness of the Vessel on loading or commencement of the the Charterers 96 running hours vvritten notice to rectiíy the íailure, lf the demurrage is nol
voyage or at any time vvhatsoever. paid at the expiration of this time limit and if the vesse! is in 0f at the loading porl, the Ovvners
are entitled at any time to terminate the Charter Party and claim damages for any losses
3. Deviation Ciause caused thereby.
The Vessel has liberty to call at any port or ports in any order, for any purpose, to sail vvithout
pilots, to tow and/or assist Vessels in all situations. and aiso to deviate for {he purpose of 8. LienClause
saving life and/or property, The Ovvners shall have a lien on the cargo and on all sub-freights payable in respect of the
cargo, for íreight. deadweight, demurrage, claims for damages and for all other amounts due
4. Paymenỉ of Preight under this Charter Party including costs of recovenng same.
(a) The íreight at the rate stated in Box 13 shali be paid in cash calculated on the intaken
quantityoícargo. 9. Cancelling Clause
(b) Prepaid. If according to Box 13 treight is to be paid on shipment, it shall be deemeđ eamed (a) Should Ihe Vessel not be ready to load (vvhether in berth or not) on the cancelling date
and non-returnabte, Vessel and/or cargo lost or not lost, Neither the Ovvners nor their agents indicated in Box 21, the Charterers shall have the option of cancelíing this Charter Partỵ.
shalt be required to sign or endorse bills of lading showing íreight prepaid unless the íreight (b) Should the Owners anticlpate that, despite the exercise of due dilígence, the Vessel will not
due to the Ovvners has actually been paid. be ready to load by the cancelling date, they shall notiíy the Charterers thereoí without delay
(c) On delivery. If according to Box 13 íreight, or part thereoí, is payable at destination It shali stating the expected date of the Vessers readiness to load and asking vvhether the Charterere
not be deemed eamed until the cargo is thus deliveređ. Notwithstanding the provisions under will exercise their option of cancelling the Charter Party, or agree to a new cancelling date.
(a), if freight or part thereoí is payable on delivery of the cargo the Charterers shall have the Such option must be declared by the Charterers vvithin 48 running hours after the receipt of the
option of paying the íreight on deliveređ weight/quanlity provided such option is declared Ovvners' notice. If the Charlerers do not exerdse their option of cancelting, then this Charter
beíore breaking bulk and the weighưquantity can be ascertained by official weighing machine, Party shall be deemed to be amended such that the seventh day aíter the new readiness date
J0int đraft survey or tally. sialed In the Owners' notỉíication to the Charterers shall be the new canceíling date.
Cash for Vessel's ordinary disbursements at the port of loading to be advanced by ỉhe The provisions of sub-clause (b) of this Clause shall operate only once, and In case of the
Charterers, if required, at highest current rate of exchange, subject to íwo (2) per cent to Vessers turther delay, the Charterers shall have the option of cancelling the Charler Party as
cover Insurance and o lh er e xpenses. per sub-clause (a) of this Clause,

5. Loading^ischarging 10. BilisotLading

(a) Costs/Risks Bills of Lading shall be presented and signed by the Master as per the ‘ Congenbiir Bill of
The cargo shall be broughl into the holds, loaded, stowed and/or Irimmed, tallied, lashed Lading form, Editíon 1994, vvithout prejudice lo this Charter Party, or by the Owners' agents
and/Of secured and taken from the holds and discharged by the Charterers. free of any rísk, provided vvritten authority has been given by Owners to the agents, a copy of which Is
liability and expense whatsoever to the Ovvners. The Charterers shall provide and lay all to be íurnished to the Charterers- The Charterers shall indemnify the Owners against all
dunnage matenal as required for the proper stowage and proiection of the cargo on board. consequences or liabilíties that may anse from the signing of bills of ladíng as presented to
the Owners allowing the use of all dunnage available on boarđ, The Charterers shall be ỉhe extern thai lh€ terms or contents of such bỉlls of lading impose or result in the imposition
responsible for and the cos\ of removing their dunnage aíter discharge of the cargo under oí more onerous liabilities upon the Ovvners than those assumed by the Owners under this
this Charter Party and time to count until dunnage has bsen removed. Chaiĩer Paiĩy.
(b) Cargo Handling Gear
Unless the Vessel is geaiiess or unless it has been agreed between the parties that the 11. Both-to-Blame Collisíon Ciause
Vessel’s gear shall not be useđ and staled as such in Box 15, the Owners shall throughout lf the Vessel comes into collision with another vessel as a result of the negligence of the
the duraỉíon of loading/discharging gíve free use of ứie Vesseỉ's cargo handling gear and of other vessei and any act. neglect or detault of the Master, Mariner, Piiol or the servants oí the
sufficient motive power lo operale all such cargo handling gear. All such equipment to be in Ownefĩ in the navigation or In the management of ỉhe Vessel, the ovvners of the cargo carried
good working order Unless caused by negligence of the stevedores lime lost by breakdown hereunder will inđemniíy the Ovvners against all loss or liability to the other or non-carrying
of the Vessel’s cargo handling gear or motive power • pro rata the total number of cranes/ vessel or her owners in so far as siich loss or liabílíty represents loss of, or damage to, or any
winches required at Ihat time for the loading/discharging of cargo under this Charter Party • claim whatsoever of the owners of said cargo, paid or payable by the other or non-carrying
shall not count as laytime or lime on demurrage. On request the Ownere shall proviđe free vessel or her ovmers to the owners of saiđ cargo and set-off. recoupeđ or recoveređ by the
of charge cranemenAvinchmen írom the crew to operate the Vessel’s cargo handling gear, other or non-canying vessel or her owners as pan of their claim against the carrying Vessel Of
unless local regulations prohibil thís. in which latter event shore labourers Shell be for the the Ovvners. The íoregoing provisions shall also apply where the ovvners, operators or those
account of the Charterers. Cranemen/vvinchmen shall be under the Charterers’ risk and in charge of any vessel or vessels or obịects other than, or In addition ỉo. ỉhe colhding vessels
responsibility and as slevedores to be deemed as their servants but shall always work under 0f objects sre at fault In respect oí a collision or contact.
the supervision of the Master
(c) Stevedore Damage
12. General Average and New Jason Clause
General Average shall be adjusted In London uniess othervvise agreed in Bũx 22 according
The Charterers shall be responsibte for damage (beyond ordinary wear and tear) to any part
to York-Antwerp Rules 1994 and any subsequent modiíication thereot. Proprietors of cargo to
of the Vessel caused by Stevedores Such damage slìail be notìíied as sooo a? reasonsbly
possible by the Master to the Charterers or their agents and to their Stevedores. íailing pay the cargo's share in the generai expenses even ìf same have been necessitated through
which the Charterers shali not be held responsíble. The Master shall endeavour to obtaín the iìegleđ or detautt of the Owners' servants (see Clause 2).
If General Average is to be adjusled In accordance with the law and praclice oí the United
Stevedores' vvrìtten acknowledgement of liability
States of America, the foilowing Clause shatl apply: “In the event of acciđent, danger,
The Charterers are obliged to repair any steveđore damage prior to completion of the voyage.
damage or disaster before 0f aíler the commencement of the voyage, resulting írom any
but must repair stevedore damage atíecting the Vessers seaworthiness or class before the
cause vvhatsoever, whether due to negligence or not, for which, or for the consequence of
Vessel sails ữorn the port where such damage was caused or found. All adổitional expenses
which, (he Ovvners are not responsible, by statute, conUact or otherwise, the cargo shippers,
incurred shall be for the account of the Charterers and anytime lost shall be for the account oí
consignees or the owners oí the cargo shall contribute with the Ovvners In General Average to
and shall be paíd to the Ovvners by the Charterers at the demurrage rate.
the payment of any sacriAces, losses 0f expenses of a General Average nature that may be
6. Laytime maóe 0f íncurred and shaíl pay saivage aitd speáal ctorges incuned in lespect ot the cárgo.
’ (ạ) Separate laytime lor loading and discharging íf a salving vessei is owned or operated by the Ovvners, salvage shall be paid íor as tully as if
Tìie caipo shall be loaded within the number of running days/hours as indicated in Box 16. vveatí^r the said saíving vessei or vessels beiongeđ to strangers. Such đeposit as the Owners, or their
pemitting, Sunđays and holidays excepted, unless useđ, in vvhich event time used shall count, agents. may deem sufficient to cover the estimated contributìon of the goods end eny salvage
The cargo shall be discharged within the number of running đays/hours as indicated in Box and special charges thereon shall, if required. be made by the cargo, shỉppers, consignees or
16, weather permitting, Sundays and holidays excepted. unless used, in which event lime ũwners of the goods to the Ovvners beíore đelivery.".
used shall count.
* (b) Total laytime for loading and discharging
13. Taxes and Dues Clause
(a) On Vessel -The Ovvners shall pay all dues, charges and taxes customarily levied on the
The cargo shall be loaded and discharged vvithin the number of total ainning days/hours as
indícated ỉn Box 16. vveather permitting, Sundays and hũlidays excepted, unless used, in véssel, hovvsoever the amount thèreóí may be assessed,
(b) Qn carọo -The Charterers shall pay all dues, charges, dulies and taxes cuslomarily levied
which event tíme used shall count.
(c) Commencement of laytime {loading and discharging) òn the cargo, howsoever the amount íhereot may be assessed.
(c) Qn Ireiọht -Unless otherwise agreed In Box 23, laxes levied on the íreight shall be for the
Laylime for loading and discharging shall commence at 13.00 hours. If notice of readiness
is given up to and incluđing 12.00 hours, and at 06.00 hours next working đay ií notice given Charterers' account.

170 Institute of Chartered Shipbrokers

 A p p en d ix 5 Gencon C harter Party

PART II
“Gencon” Charter (As Revised 1922,1976 and 1994)

14. Agency (5) The Vessel shatl have liberty:-

In eveí7 case the Ovvners shall appoint their own Agent both at the port of loading and the (a) to comply with all orders. directions, recommendations or advice as lo departure,
port oídischarge. arrival, routes, sailing in convoy, ports of call, stoppages. destinations, discharge of cargo,
đelivery or in any way whatsoever vvhich are given by the Government of the Nation under
whose flag the Vessel sails, or other Government to whose laws the Ovvners are subject,
15. Brokerage
or any other Government vvhich so requires, or any body or group acting with Ihe power
A brokerage commission at the rate stated in Box 24 on the ừeight, dead-freight and
to compel compliance wilh their orơers or directions;
demurrage eamed Is due to the party mentioned in Box 24. In case of non-execution 1/3 oí
(b) to comply with the orders, directions or recommendations of any war risks
the brokerage on the estimated amount of treight to be paid by the party responsible for such
unòerv/riters who have the authority to give the same under the terms of the war
non-execution to the Brokers as indemnity for the letter's expenses and work. In case of more
risks Insurance;
voyages the amount of inđemnity to be agreeđ,
(c) to comply with the terms of any resolution of the Security Council of the United
Nalions, any directives of the European Community, the effective orders of any other
16. General strike Clause Supranational body vvhich has the right to issue and give the same, and with national
(a) lf there is a strike or lock-out aííecting or preventing the actual loading of the cargo, or any laws aimed at eníorcing the same to vvhich the Ovvners are subject, and to obey the
part of it, vvhen the Vessel is ready to proceed from her last porl or at any time during the voyage orders and directions of those who are charged with their enforcement;
to the port or ports of loading or atter her arrival there, the Master or the Owrters may ask the (d) to discharge at any other port any cargo or part thereoí which may render the Vessel
Charterers to declare, that they agree to reckon the iaydays as if there were no strike or lock* liable to coníiscation as a contraband carrier;
out. Unless the Charterers have given such declaration in writing (by telegram, ỉf necessary) (e) to call at any other port to change the crew or any part thereoí or other persons
vÀthin 24 hours, the Owners shall have the option of cancelling this Charter Party, lf part cargo on board the Vessel when there is reason to belleve that they may be subject to
has alreađy been loaded, the Owners must proceed vvith same, (treight payable on loaded intemment, imprisonment or other sanctions;
quantity only) having liberty to complete with other cargo on the way íor their own account, (f) where cargo has nol been toaded or has been discharged by the Owners under any
(b) lf there Is a strike or lock-out affecting or preventing the actual discharging of the cargo on provisions of this Clause, to load other cargo for the Owners’ own beneíit and carry it
or after the Vessel’s arrival at or off pon of đischarge and same has not been settled within to any other port or ports vvhatsoever, whether backwards or fofwards or in a contrary
48 hours, the Charterers shall have the option of keeping the Vessel waiting until such strike direction to the ordinary or customary route.
or lock-oul is at an end against paying halí demurrage aíler expiration of the time provided (6) !f in compliance with any of the provisions of sub-clauses (2) to (5) of this Clause
for discharging until the strike or lock-out terminates and thereatter tull demurrage shall be anything is done or not done, such shall not be deemed to be a deviation, bul shall be
payable until the complelion of đischarging, or of ordering the Vesseí to a saíe port vvhere consideređ as due fulfilment oí the Contract of Carriage.
she can saíely discharge without risk of being detained by strike or !ock-out. Such orders to
be given vvithin 48 hours after the Masler or the Owners have given notice to the Charterers
of the strike or lock-out affecting the discharge. On delivery of the cargo at such poíl, ail 18. General Ice Ciause
conditions of this Charter Parly and of the Bill of Lading shall apply and the Vessel shall Port of loađing
receive the same freight as if she had discharged at the oríginal port of destination, except (a) In the event oí the loading port being inaccessibie by reason of ice when the Vessel is
that if the distance to the substituted port exceeds 100 nautical miles, the íreight on the cargo reáđy to proceed from her lasĩ port or at any time during the voyage oron the Vessers arrival
delivered at the substituted port to be increased in proportion. or in case írost sets in after the Vessers arrival, the Master for fear of being fr02en in is at
(c) Except for the obligations đescribed above, neither the Charterers nor the Ovvners shall be liberty to leave without cargo, and this Charter Party shall be null and void.
responsible for the consequences oí any strikes or iQck-outs preventíng or affecting the actual (b) lf đuring loading the Master, for íear of the Vessel being írozen in, deems it advisable
loading or díscharging of the cargo. to leave. he has liberty to do so with what cargo he has on board and to proceed to
any other porl or ports with option of completing cargo for the Ovvners' beneíit for any
17. W a rR isks(‘‘Voywar1993"} porl or ports including port of discharge. Any part cargo thus loaded under this Charter
(1) For the purpose of this Clause, the vvords: Party to be forwarđed to destination at the Vessers expense but against payment of
(a) The ■■Owners" shall include the shipovvners, bareboat charterers, disponent owners, treight, proviđed that no extra expenses be thereby caused to Ihe Charterers, íreight
managers or other operators who are charged with the managemenl of the Vessel, and being paid on quantity detivered (in proportion if lumpsum), all other conditions as per
the Master; and this Charter Party.
(b) “War Risks' shall include any war (whether actual or threatened), act oí war, civil war, (c) In case of more than one loading port, and lf one or more of the ports are closed by ice,
hostilities, revolution, rebellion, civil commotion, vvarlike operations, the laying of mines the Master or the Owners to be at liberty either to load Ihe part cargo at Ihe open port and fill
(whether actual or reported), acts of piracy, acts oí terrorists, acts of hostility or malicious up elsevvhere for their own account as under section (b) or to declare the Charter Party null
damage, blockades (vvhether imposed against all Vessels or imposed selectively against and void unless the Charterers agree to load full cargo at the open port.
Vessels of certain fìags or ovvnership, or against certain cargoes or crevvs or othefwise Porl of discharge
howsoever), by any person, body, terrorist or political group, or the Government of any (a) Shoulđ ice prevent the Vessel from reaching porl of discharge the Charterers shall have
State vvhatsoever, which, in Ihe reasonable judgement of the Master anđ/or the Owners, the option oí keeping the Vessel waiting until the re - opening of navigation and paying
may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo. đemurrage or of ordering the Vessel to a safe and immediately accessible port where she
crevv or other persons on board the Vessel. can saíely discharge vvithout risk of delention by ice. Such orders to be given wilhin 48 hours
(2) lf at any tíme before the Vessel commerices loading, it appears that, in the reasonable after the Master or the Owners have given notice to the Charterers of the impossibility of
)udgement oí the Master and/or the Ovvners, períormance of the Contract of Carriage, or reaching port of đestination.
any part of it, may expose, or is likely to expose, the Vessel, her cargo, crew or other (b) lf đuring discharging the Master for fear of the Vessel being frozen in deems it advisabie to
persons on board the Vessel to War Risks, the Owners may give notice to the Charterers leave. he has liberty to do so with what cargo he has on board and to proceed to the nearest
cancelling this Contract of Camage, or may reíuse lo pertorm such parl of it as may expose, accessible port vvhere she can saíely discharge.
or may be likely to expose, Ihe Vessei. her cargo, crew or other persons on board the (c) On delivery of the cargo at such port, all condilions of the Biil oí Lading shall apply and
Vessel to War Risks: proviđed alvvays that if this Contract of Carriage provides that loading the Vessel shall receive the same freight as lf she had discharged at the origínal port of
or discharging is to take place within a range of ports, and at the port or ports nominated destination, except that if the distance of the substituted port exceeds 100 nautical miles, the
by the Charterers the Vessel, her cargo, créw, or other persons onboard the Vesseí may íreight on the cargo deíivered at the substituted port to be increased in proportion.
be exposed, or may be likely to be exposed, lo War Risks, the Ovvners shall first require
the Charterers to nominate any other safe poít wtiich lies within the range for loading or
discharging, and may only cancel this Contract of Carriage lf the Charterers shall not have 19. Law and Arbiỉration
nominated such safe port or ports within 48 hours of receipt of notice of such requirement. * (a) This Charler Party shall be govemed by and construed in accordance with English law
(3) The Ovvners shall not be required to continue to load cargo for any voyage, or lo sign and any dispute arising out of this Charter Party shall be reỉerred !o arbitration in London
Bills of Lading for any port or place, or to proceed or continue on any voyage, or on any in accordance with the Arbitration Acts 1950 and 1979 0f any slatutory modiíication or re-
part thereoí, or to proceed through any canal or waterway, or to proceed to or remain enaclment thereoí for the lime being in íorce. Unless the pailies agree upon a sole arbitrator,
at any port or place vvhatsoever, where it appears, either after the loading of the cargo one arbitrator shali be appointed by each party and the arbitrators so appoínted shall appoint
commences, or at any stage of the voyage thereafter before the discharge of the cargo a third arbitrator, the decision of the three-man tribunal thus constituted or any two of them,
is completeđ, that, in the reasonable ịudgement of the Master and/or the Owners, the shall be final. On the receipl by one party of the nominalion In writing of the other party’s
Vessel, her cargo (or any part thereoó, crew or other persons on board the Vessel (or arbitrator, that party shall appoint their arbitrator vvithin íourteen days, íailing vvhich the
any One or more of them) may be, or are likely to be, exposed to War Risks. If it should decision of the single arbilralor appointed shall be final,
so appear, the Ovvners may by notice request the Charterers to nominate a safe port for For disputes vvhere the total amount claimeđ by either party does not exceed the amount
the discnarge of the cargo or any part thereoí, and ií vvithin 46 hours of the receipt of such stated in Box 25" Ihe arbitration shall be conducteo in accoídance With (he Srnall Ciaims
notice, the Charterers shall not have nominateđ such a port, the Ovvners may discharge Procedure of the London Maritime Arbitralors Association.
the cargo at any safe port Qf their choice (including the port of loading) in complete * (b) This Charter Party shall be governed by and construed in accordance with Title 9
fuífilmerìt oí the Contract of Carriage. The Ovvners shall be entitled to recover ừom the of the United States Code and the Maritime Law of the United States and should any
Charterers the extra expenses of such discharge and, if the discharge takes place at any dispute arise out of this Charter Party, the matter in dispule shall be reíerred to threé
port other than the ioading port, to receive the full íreight as íhough the cargo had been persons at New York, one to be appointed by each of the parties hereto, and the third
carried to the discharging port and if the extra distance exceeds 100 miles, to additional by the two so chosen; their decision or that of any two of them shall be fìnai, and for
íreight vvhich shall be.the same percentage of the íreight contracteđ for as the percentage purpose of eníorcing any avvard, this agreement may be made a rule of the Court. The
which the extra distance represents to the distance of the normal and customary route, proceedings shall be conducted in accordance with the rules of the Society of Maritime
Ihe Ovvners having a lien on the cargo for such expenses and treight. Arbitrators, Inc..
(4) lf at any stage of the voyage aíter the loading of the cargo commences, it appears that, in For disputes where Ihe total amount claimed by either party đoes not exceed the amount
the reasonable judgement of the Master and/or the Owners, the Vessel, her cargo, crew stated in Box 25' the artitration shail be conducted In accorđance vvith the Shorteneđ
or other persons on board the Vessel may be, or are likely to be, exposed to War Risks on Arbitration Proí^dure of the Society of Maritime Arbitrators. Inc., ‘
any part of the route (including any canal or waterway) which is normaliy and customarily * (c) Any dispute arising out of this Charter Party shall be reíerred to arbítration a( the place
used in a voyage of the nature contracted for, and there Is another longer route to the indicated fn Box 25, subject to the procedures applicable there. The laws of the place
discharging port, the Owners shall give notice to the Charterers that this route will be indicated In Box 25 shall govern this Charler Party,
taken. In this event the Ovvners shalí be entitled, if the total exíra distance exceeds 100 (đ) lf Box 25 in Part I is not tilled In, sub*clause (a) of this Clause shall apply.
miles, to additional íreighl vvhich Shell be the same percentage of the freight contracted * (a), (b) and (c) are altematives; indicate altemative agreeơ in Box 25.
íor as the percentage vvhich the extra distance represents to the distance of the normal
** VVhere no íigure is supplied in 8ox 25 in Part I, this provision only shall be void but the other
and customary route.
provisions of this Clause shall have full lorce and remain in eHect,

Introduction to Shipping 171

A p p e n d ix 5 Gencon Charter Party

172 Institute of Chartered Shipbrokers

 A p p e n d íx 6 M a jo r D iffe re n ce s b e tw e e n Voyage C h a rte rs and T im e C h a rte rs

PRINCIPLE CLAUSES COMMON TO BOTH VOYAGE AND TIME CHARTER PARTIES

1. Titles of the contracting parties (name of Shipovvner and name of Charterer).
2. Name of ship with description including tonnage, classitication, present position etc.
3. VVarranty of seavvorthiness. (Often “tight, staunch and strong”).
4. Place of loading (of delivery in a time charter).
5. Type of cargo and quantity, (trading limits in a time charter).
6. Place of discharge (of redelivery in a time charter).
7. Rate of íreight (of hire in a time charter).
8. VVhen freighưhire to be paid (e.g. on loading or on discharge in a voyage charter, monthly or
semimonthly in a time charter).
9. Laydays/Cancelling.
10. Arbitration.
11. Exceptlons and exemptions from liability clauses.
12. Brokerages.

PRINCIPLE CLAUSES SPECIPIC TO VOYAGE CHARTERPARTIES

1. Rates of loading and discharging (tons per day or number of days/hours allovved).
2. When time commences to count including how and when notices of readiness to be given.
3. How laytime to be calculated e.g. SHEX.
4. Rate of demurrage (and despatch if any).
5. VVho nominates port agents.

PRINCIPLE CLAUSES SPECIPIC TO TIME CHARTERPARTIES

1. Who pays for what especially fuel, fresh vvater, port charges etc.
2. Offhire clause (in case of breakdovvn, how soon hire ceases to become payable).
3. Ovvners option to drydock vessel during currency of charter.
4. Quantities of bunker fuel to be on board at time of delivet7 and redelivery.

Introduction to Shipping 173

A p pendix 6 M a jo r Differences betvveen Voyage Charters and Time Charters

174 Institute of Chartered Shipbrokers

 A p p en d ix 7 Chartering Expressions and Abbreviations

Most chartering negotiations today will be conducted Via some form of electronic vvritten communication such as telex, fax,
e-mail etc. Dating from the time when the only such medium was the telegraph many charterparty clauses were reduced to
sets of initial letters. Because of their conveniénce they are still used.

It is vital that both parties in negotiations are íully avvare of the meaning of these abbreviations and care should be taken to
avoid ambiguity or misunderstanding.

Abbreviations concerning laytime

NOR Notice of Readiness. The notice the ship gives to the shipper or receiver to say the ship is read to
commence loading/discharging. This will determine when laytime commences to count.

SHEX Sundays and Holidaỵs excepted. Will follow the rate of loading/discharging and may be followed by
‘uu’ meaning 'unless used’ or ‘eiu’ = ‘even if used’. VVould be FHEX (Pridays and Holidays) if Islamic
countries involved.

SHINC Sundays and Holidays included. Common when vvorking at a dedicated bulk-cargo terminal which
operatés all day every day.

WWD VVeather VVorking Days ie days when bad vveather does not interíere with loading/discharging.

Abbreviations concerning demurrage/dispatch

D1/2D Despatch Half Demurrage may be followed by

BENDS Meaning at Both Ends or

DLO Despatch Loading Only or

DDO Despatch Discharging Only

FD Free oídispatch

Abbreviations concerning who pays for what

FIO Free In and Out, means free of expense to the vessel, the shippers pay for loading and receivers pay
íordischarging.

FIOS Free In and Out and Stovved. Shippers also pay for the stevedores vvorking in the ship stowing the
cargo in the holds.

F10T Free In and Out and Trimnned. With a bulk cargo the process of stovving, vvhich will be that of levelling
the material, is called trimming.

Gross Terms (or Liner Terms) means the ship pays all the cost of loading, stowing and discharging.

Introduction to Shipping 175

 A p p e n d ix 7 Chartering Expressions and Abbreviations

Concerning the ship and cargo

DWAT Deadweight All Told. The total vveight of cargo, bunkers stores etc that the ship can carry.

DWCC Deadweight Cargo Capacity. The total vveight of cargo the ship can carry assuming an average quantity
of bunkers and stores.

ETA Estimated Time oíArrival.

ETD Estimated Time of Departure.

ETS Estimated Time of Sailing.

MOLOO More of Less in Owners Option. Reíers to the amount of cargo to be loaded where the owner seeks to
allovv the master some Aexibility of depending upon the vveight of fuel and stores he will have on board.
The charterers may, hovvever, insist on ‘min/max’ - an exact quantity.

aa Alvvays Aíloat, the berth must be deep enough for the ship to be aíloat at all states of the tide vvhether
empty or loaded.

naabsa Not Alvvays Aíloat But Safe Aground. At low tide there will not be enough water for the ship to be aíloat
but the bottom is sand or mud so the ship will not suffer damage.

SWAD Salt VVater Arrival Draft. The charterers cannot guarantee an accessible berth if the ship arrives on a
deeper draft than stipulated.

Panamax The dimensions of this ship are the maximum permissible for transmitting the Panama Canal. Usually
about 60/80,000 tonnes dwat.

Capesize Too large for Panama, usually over 100,000 dwat.

Handysize An indeterminate size but currently around 30,000 dwat,

IWL Institute VVarranty Limits. The Institute in this case is the Institute of London Undervvriters now called
International Undervvriters Association (lUA) who have published lists of geographical limits outside
which the ship will not be insured unless additional premiums have been paid.

HHDW Heavy Handy Deadvveight. A method of reíerring to cargoes of scrap Steel. As the name implies it will
stow deadvveight and there will be no awkward pieces.

HSS Heavy grain/Sorghum/Soya reíers to grain and gives charterers a range of options of types of grain to
be loaded, typical method of chartering from the us Gulf.

TEU Tvventy Foot Equivalent Units, a way of describing the capacity of a ship intended for the Container
trade. Containers are either 20 feet or 40 feet long thus a 40 foot Container is two Teus and known as
an FEU.Beaufort Scale Wind Force Conversions.

176 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

C ode w ord for this C harter Party

ỉssued March 2005 “SHELLVOY 6’’

VO Y AG E C H A R TE R PARTY
LONDON, 20
PREA M BLE 1

IT IS T H IS D A Y A G R E E D betw een 2

of (h erein arter referred lo as “O w ners’*), being ow ners 'd isp o n en l o w ners o f the 3

m otor/sleam tank vessel called w ith an IM O n u m b er o f 4

(h erein aíter referred lo as “the vessel") 5

and of 6

(h erein aíler referred to as “C h artercrs” ): 7

Ihat the Service tb r w hich provision is hcrcin m ađe shall be subjccl to ihe term s and condilions o f ihis C harter vvhich includes Parl I. 8
P a r tI I a n d P a rtllI.ln lh e e v e n to f a n y c o n f 1 ic tb e tw e e n lh c p ro v is io n s o f P a r tl,P a r tlla n d P a r tlllh e re o f,th e p r o v is io n s o rP a rtls h a llp re v a il. 9

PARTl 10

(A ) D escription (1) O w ners w arrant ihat at ihe date hcrcoC and from the lim e \vhcn ihe obligation to proceed to the loadport(s) attaches, ihc 11
o fv e s s c l vessel 12

ti) Is c la ss e d 13

(ii){a) H as a d eadw eighl o f tonnes (lOOOkg) on a sall-w alcr draíì on assigncd sum m cr frceboard o f m. and if 14
applicable, 15
(b) H as on board docum entalion show ing the follow ing addiiional d raíìs and deadvveights 16

(iii) lla s capacity lor cargo o f m* 17

(iv) Is fully filtcd vvith heating system s tb r all cargo tanks cap ab le o f m aintaining cargo at a tem perature o fu p to d e g rees C elsius 18
and can accept a cargo lem pcralurc on loading o f up to a m axim um o f degrecs Celsius. 19

(v) H as lanks coaled as tbllovvs; 20

(vi) Is equipped w iih cranes/derricks capablc o flil\in g to and su p p o rtin g al thc vcsscTs port and starboard m aniíơlđs subm arine 21
hoscs o f up to lonnes (1000 kg) in Nveight. 22

(vii) C an d ischarge a íull cargo (w helher hom ogenous o r m ulli grad c) cith cr wilhin 24 hours, or can niaintain a back p rcssurc o f 23
100 PSI at ihc vesseT s m a n itb ld and O w ners w a ư a n t such m inim um p ertbrm ance providcd receiving facilitics perm il and 24
subject aUvays to ihc obligalion o f ulm ost dcspatch set out in Part II, clause 3( 1). 25
T he discharge vvarranty shall only bc applicablc providcd ihc k inem atic viscosily does not cxcced 600 ccntislokcs at the 26
discharge tcm perature required by C harterers. I f the k inem alic viscosity only excceds 600 centislokcs on part o f thc carg o 27
or p articu lar grade(s) then thc discharge w airan ty shall continue to apply to all other cargo/građes. 28

(viii) H as or w ill have c a ư ie d , íb r the nam ed C h artcrcrs, thc follow ing thrcc cargocs (all graclcs to bc identificd) im m cdiately 29
prior lo loading under this C harter:- 30
Last C arg o /ch artcrcr 31
2"‘* Last C argo/charterer 32
3^ Last C argo/charterer 33

(ix) H as a cru d c oil \vashing system com plyin g w ith the requirem ents o f the International Convention for the Prevention o f 34
P ollution tVom Ships 1973 as m odiíìed by the P rotocol o f 1978 (“ M A R PO L 73/78"). 35

(x) H as an operational inert gas system and is equ ip p ed tb r and ab le to ca ư y out closed sam pling/ullaging/loading and 36
disch arging operations in íull com plian cc w itb ihe International S afety G uide for Oil Tankers and Term inals (“ IS G O T T ") 37
guid elines c u ư e n t at the date o f this C harlcr. 38

(xi) H as on board all papers and certiíìcates required by any ap plicable law , in force as al the date o f this Charter, lo enable the 39
vessel to perío rm the ch arter Service w itho u t any delay. 40

Introduction to Shipping 177

 A p p e n d ix 8 Shellvoy 6

ỉssued March 2005 “ SHELLVOY 6”

(xii) Is entered in the P&I Club, being a m em ber o f the International G roup o f p&! Clubs. 41
42
(xiii) H as in full force and eữ e ct Hull and M achinery Insurance placed ihrough reputable Brokers on institute Tim e C lauses-H ull
đated for the value o f 43

(xiv) C om plies w ith the latesl edition o f the Oil C om panies International M arine Forum (“O C IM P") standards tb r oil lan k ers' 44
m aniíolds and associaied equipm ent applicable to its size tbr cargo manifolds and vapour recovery systems. 45

(xv) Is equipped lo com ply w ith, and is operaied in accordance \vith, and has on board. the latesl edition o f the intem ational 46
C ham ber o f Shipping (“ ICS") and/or O C ỈM F guidclines/publicalions covering: 47
(a) Ship 10 Ship O perations 48
(b) ISG O TT 49
(c) Clean Seas G uide for Oil Tankers 50
(d) Bridge Procedure Guide 51

(II) Throughout the charter Service. Ovvners shall ensure that ihe vessel shall be m ainiained, o r that ihey take all steps necessary 52
to prom ptly restore vessel to be, vviihin the description in Part 1 clause (A ì(l) and any questionnaires requested by C harterers or vvithin 53
inĩom iation provided by Ovvners. 54

(III) Ovvners w aư an t that any intbrm ation provided on any Ọ uestionnairc(s) rcquested by C harlerers o r any olher vessel 55
iníorm alion/delails provided by Ovvners 10 C harterers is aKvays com plete and correct as at the dale hereof, and from the tim e w hen ihe 56
obligalion to proceed to the loadport attaches and ihroughout the charter scrvice. This iníbrm ation is an integral part o íth is C harter but 57
58
ií'there is any conAict betw een the contents o f the Q uestionnaire(s), or iníbrm ation provided by O w ners, and any olher provisions o f ihis
59
C harter then such other provisions shall govem .

(B ) Positiony' Novv 60
Expccted rcady 10 load
R eadiness
In addition lo the above dclails on thc posilion o ĩl h c vesscl O w ners w ill advise C harterers o f the know n pro g ram m e, inclu d in g any 61
62
contraclual options available to the C harterers in Part 1 clause (A )(ỉ) (v iii) above betw een cu rren t position up to ex p ected read y lo
63
load date at C harterers nom inated or indicaied firsl load p ort/area. O w ners wi!l not, unless w ilh C h arierers’ prio r consent, neg o iiatc
64
I
tr.
o r enier into any business or give currenl C harierers any further opiions ihat m ay atXecl o r aller the program m e o f ihe vesscl as givcn
65
in ihis clause.
ó
ũ 66
s (C ) Laydays C om m cncing Noon Local í imc on (C om m cncem eni Date)
s
Ề 67
Term inating Noon L(xai Tim e on {Terminaiion Oaie)
1
6S
■Ễ (D ) Loading
^ port(s)/
69
R ange
(E ) D ischarging
port(s)/ 70
R ange
(F ) C argo C'harterers' opiion 71
đescriplion 72
Ovvners vvarrant thai \vhere dirterent grades oft:argo are carried pursuant to thÌ5v Part 1clause (F), they vvill be kept in com plcte segregation 73
from each olher during loading, iransil, and discharge, tu include ihc usc o f dirterent pưitips lines for each grade. 11', how ever. C harterers
so require il, the vessel m ay be required to: 74
75
(a) co-m ingle ditĩerenl grades o f cargo providing such grades íầll \viihin ihe cargo descriplion set oul in Ihis Part I clause (F); 76
(b) othervvise breach the vessePs natural segregation; 77

(c) add dve to the cargo at\cr loađing. and/or

78
(d) carry out such othcr cargo operalions as C harterers m ay reasonably requirc as long as the vessel is capable o fs u c h operations
79
provided that the C harterers w ill indem niíy O w ners íb r any loss dam age delay o r expensc caused by tbilow ing C harterers' 80

inslructions, except to the extent that such loss dam age delay or expense could have been avoided by thc exercise o f due diligencc
81
by Owners.
82
83
(G ) P reighl Ai % o f ihe raie for ihe voyage as pro\ ided Ibr in tne N ew W orlaw idc Tanker N om inal Preight Scale curretU at the date oi'
rate com m cncem ent o H o ad in g (hereinarter relerrcd to as “ W orldscale” ) per ton (2240 lbs)/ionne (1000 Kg) or. if agreed, thc follow ing
ỉum psuni am ouni(s)/or ữcight per lonne for nam ed loađ and dischargc area(s)/port(s) com binations

T h is d o c u m e n t is a C o m p u te r g e n e r a t e d S H E L L V 0 Y 6 fo rm p rin te d b y a u th o rity o f B IM C O . A n y in s e rtio n o r d e ie tio n to th e fo rm m u s t b e c le a rly v is ib le . In t h e e v e n t o f a n y

m o d iíic a tio n m a d e to th e p re -p rin le d te x t o f th is d o c u m e n t vvhich is n o t c le a rly vis ib le , t h e te x t o f th e o rig in a l B IM C O a p p ro v e d d o c u m e n t s h a il a p p iy B IM C O a s s u m e s n o
re s p o n s ib ílity fo r a n y lo ss, d a m a g e o r e x p e n s e a s a re s u lt o f d is c re p a n c ie s b etvv ee n t h e o rig in a l B iM C O a p p ro v e d d o c u m e n t a n d th is C o m p u te r g e n e r a t e d d o c u m e n t.

178 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issiied Man h 2005 “ S H E L L V O Y 6”

(H ) Preight
payable to 84
(I) Laytim e running hours
85
(J) D em urragc
per day (or
86
pro raia)

87
(K )E T A s All radio/telex/e-m ail m essages sent by ihe m asler lo Charierers shali be addressed lo

All telexes m ust begin \vith the vessel nam e at the Slart o f the subject line (no inveried com m as, or use o f M T/SS preceding the 88
vessel nam e) 89

(L) sp eed The vessel shall períorm the ballasl passage \vith utm ost đespatch and the laden passage at knois w eather and safe navigation 90
91
Charterers shall have ihe option lo instruct the vessel to increase speed with C harterers reim bursing O w ners for the additional 92
bunkers consum ed, al replacem ent cosl. 93
Charterers shall also have the oplion 10 instrucl ihe vessel to reduce speed on laden passage. A dditional voyage tim e caused by such 94
instaictions shall couni against laylim e or deniuưage, if on dem urrage, and the valuc o f any bunkers saved shall be deducted IVom any 95
96
dem urrage claim Ovvners m ay have under ihis C harter with the value being calculateđ at original purchase price.
97
O w ners shall provide docum eniation to fully support the claim s and calculalions under this clause.

(M ) \Vorldscalc World scale Term s and C onditions apply/do not apply to this Charter. [delete as applicable] 98

(N ) C asually/ In the evení o f an accident / m arinc casualty involving the vessel. Owners* technical m anagers can be conlacled on a 24 hour basis 99
Accidenl as follows: 100
contacts 101
Com pany Full Name:
102
Contacl Person;
103
Full Address:
104
Telephone N um ber:
105
Fax N um ber:
106
Telcx Number:
107
Emaii Address:
108
24 llo u r Em ergency T elcphone number:
109
(O )S p ecial
^ provisions
B
^ Signatures IN W rĩN E S S W H EREOF. the parries have causcd this C harter consisting o f thc Pream ble. P ans 1. II and III to be executed as o f the 110
day and year first above w ritten. 111

By 112

By 113

This docum ent is a Computer generated SH6LLVOY6 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any
modificatíon made to the pre-printed text of this document which is not clearly visible. the text of the original BIMCO approved document shall apply. 6 IM C 0 assumes no
responsibílíty íor any loss. damage or expense as a result of díscrepancies behveen the original 6 IM C 0 approved document and this Computer generated document.

Introduction to Shipping 179

A p p en d íx 8 Shellvoy 6

ỉssued March 2005 “ SHELLVOY 6”

PART II

Condition o f 1. Ovvners shall excrcise duc diligence lo ensure thai tVom ihc tinie w hen the obligation to procced lo the loading port(s)
vessel 3
atlaches and ihroughout the charter s e n ice *
4
(a) thc vessel and hcr hull, m achinery, boilers, tanks, equipm enl and tầcilities are in good order and condition and in ev ery w ay
5
equipped and fit for ihe Service requircd; and
6
(b) the vessel has a full and eíTicicnl com plem cnt o f m aster. otĩìcers and crew and the scnior oíTicers shal! be tully conversant 7
in spoken and vvTÌtlen English language 8
and to ensure thai betbre and al the com mtíncemtínt o f any laden voyage the vessel is in all respects fìt lo carr>' the cargo speciíìed in 9
Part 1 clause (F). For the avoidance o f doubl, references to equipm enl in this C harter shall include but not be limiled 10 com puters and 10
Computer system s, and such equipm ent shall (inter alia) bc required lo conlinue lo íunction, and not su tĩc r a loss ol’ tunctiơ nalily and 11
accuracy (w hether logical or m alhem atical) as a result o f ihe run dale o r dates being processed.
12
C leanliness 2. W hilst loading, carrying and discharging ihe cargo ihe m aster shail at all tim es keep the tanks, lincs and pum ps o f the vessel 13
o f tanks alw ays clcan for the cargo. U nless othervvise agreed bclwcen Osvners and C harterers the vessel shall prcsent íb r loađing w iih carg o lanks 14
ready and, subjecl lo the tbllow ing paragraphs, if vcssel is íìlled vviih Inert G as System (“ IG S” ), tlilly inenecl. 15
16
Charterers shall have the right to inspect vessePs tanks prior lo loading and the vessel shall abide by C hartcrcrs' in structions with
17
regard to tank or tanks w hich the vessel is required to prescnl rcady for eniry and inspection. If C h a n e re r's inspcclor is n ol salisfied
18
with the cleanliness o f the vessel's lanks. O w ners shall clean ihcm in their lim e and at their expense to the salisfaclion o r c h a r t e r e r s ’
19
inspector, providtíd that nothing hcrein shall atTect thc rcsponsibilitics and obligations o f the m aslcr and Ovvncrs in respecl o f the
20
loading, carriage and care o f cargo under this C hartcr nor prcjudice ihe righls o f C harterers, should any contam inaiion o r dam age 21
subsequenlly bt* tbuncl, to contcnd that the sam c was causcd by inadequate cleaning and/or som e brcach o r ih is or any o lh cr clause o f 22
Ihis Charter. 23
Notw'ithstanding Ihal ihc vựssel. if equippcd with ICìS, shall preseni for loading W'ith all cargo tanks tully inerlcđ, any tim e used 24
for de-inerting (providcd ihat such de-ineriing takcs placc a l k r laylim c or đeniurrage tim e has com m enccd or w ould, bul for this clause, 25
have com m enced) and/or re-inening those lanks ihal al C'harlcrers’ specifìc request w ere gas trced for inspccliơn, shall co u n t as laytim e 26
o r í f on dum urragc as dem urrage, providcd thc tank o r lanks inspecied are íbund to bc suitable. In such casL* C hartcrers will reim bưrse 27

Ovvners íbr bunkers consum cd for dự-incrling/rc-incrting, at replacem ent cost. 28

29
l f thc v cssel’s lanks are inspcclcd and rcjecied, tim e used íbr de-inertintz shall not cnunt loNvards layiim e or deniurrage, and
30
layiim e or dcm uư agc tim c shall nol com m ence or recom m ence, as the case may be, until thc lanks havc bcen re-inspected, approveđ by
31
C hartcrcrs’ inspecior, and re-incned.
32
33
V oyage 3. (1) Subject to the provisions o f this C h an e r thc vesscí shail períbrm her seA Ìce with utm ost despalch and shall procced
34
10 such bcrths as Chaitcrers m ay spccily, in any port o r ports vvithin Part I clause (D ) nom inatcd by C hartcrcrs. or so ncar thereunio as
35
shc may safely get and there, alw ays saíely afloat. load thecargo speciiied in Parl l clause (K) o ít h is C harter. but not in exccss o t the
36
Iiiaximum quaiitiry consistent with the International ỉ.oad Linc Convenlion for ihc lim e being in tbrce and, bcing so loadcd. procccd as 37
ordered on signing bills o f lading to such bcrths as C hartcrcrs m ay spccitv, in anv port or ports w ithin Part I clausc (K) nom inaicd by 38
C hanerers. or so near thcrcunto as shc m ay safely gel and ihcrc, alw ays salely af1oat, discharge thc cargo. 39
Chartcrcrs shall nom inalc loading and discharging ports, and shall specity loading and clischarging bcrlhs and, w herc loading or 40
discharging is inierruptcd. shall provide íVcsh orders in relaỉion ihereto. 4!
In ađdition C hartcrcrs shall havc the aptioii at any lim e o í ordering ihc vessel lo sufc areas al sea ỉbr w ireless orders. A ny delay 42

o r dcvialion arising as a result o f thc excrcise ot such option shalỉ be com pcnsalcd by C hartcrers in accordancc with Ihe term s o í'P art 43
44
11 clause 26 (1).
45
(2) ()wner.s shall be rcsponsiblc Ibr and iiidem nitỳ Charlcrers íbr any timc, cosls, delays o r loss incỉuding but nol lim itcd to usc
46
o f laytim e, dem uưage, devialion expenses, replacenient tonnagc, lightcning cosls and associatcđ fees and expenses due to any tailu rc
47
vvhatsoever to com ply tullv with C harterers’ voyagc inslruclions and cỉauscs in ihis C harier w hich specif> requirem ents co n cem in g
4S
V oyage Instructions and/ or 0 \v n e rs ’/m asters' duties including. \viihout limilatii)n to the generalily o f thc tbregoing, loading m ore 49
cargo than perm itied under the Inteniational Load Line C onvention. tbr ihc lim c being in íbrce, or tor nol leaving suíTỉcient space for 50
cxpansion o f cargo or loading more or less cargo than C harlcrers specified or for nol loading/discharging in accordance \vith C h arterers' 51
insiructions regarding the cargo quantity o r drart requirem ents. 52
This clause 3(2) shal! have eíte c t notw ithslanding the provision o f Part ÍI ciause 32 (a) o f ihis C harter o r O w ners‘ d eíen ccs uiider 53
thc H ague-V isby Rules. 54
(3) ()w ners shall alw ays em ploy piiots for bcrthing and unbcrthing o f vessels at all ports and/or berths unđer this C harter unless 55
56
prior exem ption is given by correct and authorised personnel. O w ners to contìrm in wTÌting iTthey have bccn exenipt froiĩi using a pilot
57
and provide Charterers w ith the delails. including but not lim iled to, the authorising organisation w ith p erso n 's name.
58
(4) VVilhout prejudice to ihe provisions oí'sub-clause (2) o f ihis olause, and unless a speciíic prior agreem cni exists. i f a conA ict
59
arises betvveen lenninal orders and C harterers' voyage instructions, the m aster shall stop cargo operations, and/br other operalio n s unđer
60
dispute, and contact Charterers im m ediately. Tem iinal orders shall never supersedc C hartcrcrs' voyage instructions and any conAict 61

This d o c u m e n t is a Com puter g e n e ra te d SHELLV0Y6 fo rm prinled by a u th o rity o f BIMCO. Any in s e rtio n o r d e le tio n to the form must be c le a rly v is ib le . In Ihe event of a n y
modiíication made to the pre-printed text of this document vvhich is not clearly visible, the text of the original BIMCO approved đocument shall apply. BIMCO assum es no
responsibility for any loss, damage or expense as a result o f discrepancies betvveen the original BIMCO approved document and this Computer generated document.

180 Institute of Chartered Shipbrokers

 A p pendix 8 Shellvoy 6

Issued March 2005 ‘S H E L L V O Y 6”

PART n

shall b e resolved prior to resum ption o f cargo, or oth er, op eraiio n s in dispute. W here such a conAict arises the vessel shall not 62
sail from the porl or resum e carg o operalions, an d /or o lher op cratio n s un d er d isp u le, until C harterers have d irected ihe vessel lo 63
do so. 64
65
Tim e spent resolving the vessel/lerm inal conAict w ill count as layiim e or dem u n rag e except that tailure o f O w ners/m aster to com ply
66
w ith the proceđure set íbrth above shall resull in the deduction lìrom laylim e o rd em u rra g e lime o fth e lim c used in resolving ihe vessel/
67
term lnal instruclion conAict. 68
(5) In ihis Charter, “berlh” m eans any berth, w harf, dock, anchorage, subm arine line, a posilion alongside any vessel o r lighter
69or
any o ther loading or discharging point w hatsoever lo W'hich C hartcrers are entitlcd to ordcr Ihe vessel hercunder, and “port” m eans any 70
pơrt or location al sea to vvhich the vessel m ay proceed in accordance vviih the term s o f ihis Charter. 71

S ate berth 72
4. C harterers shall cxercise due diligence to order ihc vesse) on)y lo ports and berths vvhich are safe t'or the vessel and lo
73
ensure that iranshipm cnt operalions coníorm to standards nol less than Ihose set oul in the lalesl edilion o f IC S/()C TM F Ship-lo-Ship
74
T ran síer G uide (Petroleum ). Nolvviihslanding anything containcd in this C harter, C hanerers do nol vvarrant ihe safely o f any port. berth
75
or iranshipm enl operalion and Charterers shall not be liable tbr loss or dam age arising from any unsately if ihey can prove that due
76
diligence w as exercised in thc giving o f the order or if such loss or đam age was caused by an act o í'w ar o r civil com m otion within ihe 77
trading areas deíìncd in Parl 1 clauses (D/E). 78

Hrcight
5. (1) Prcighl shall bc eam ed concuưently with dclivcry o t'carg o at the nom inaled discharging port or ports and shall bc 79
paid by C hartcrcrs lo C)wners \vithout any deductions, exccpt as m ay be required in the Singapore Incom e Tax Acl and/or undcr P an il 80
clause 48 and/or under clause 55 and/or undcr P an III clause 4{a), in U nited States Dollars ai the raic(s) spccitìcd in Part 1 clause (G) 81
82
on ihc gross bill ol lađing quanlily as tum ishcd by the shipper (subject to Part II clauscs X and 40). upon rcccipt by Charterers o t notice
83
o f com pletion o f tìnal dischargc o f cargo, provided thai no íVeighl shall bc payablc on any quantily in exccss o f the m axinium quantily
84
consisteni with the International Load Line C onvention for ihe lime bcing in force. K5
lí'th e vessel is ordcrcd lo proceed on a voyage for which a fixcd ditTercntial is provided in VVorldscale, such íìxed diíTcrcniial shall 86
be payable \viihout applying the perceniage referred to in Part I clause (G). 87
If cargo is caư ied betw een ports anđ/or by an agreed route tb r which no ĩreight rate is exprcssly quoled in VVorldscale, then 88
89
ihc parties shall, in the absence o f agrccm cnl as to the appropriate íreight rate. apply lo NVorldscalc A ssocialion (London) Lld., or
90
VVorldscale A ssocialion (N Y C) Inc., tbr lh(i detcrm ination o f an appropriate \V orldscale Ircight ralc. iro v v n e rs or m asler unilalerally
91
clcct lo proceed by a rouie thai is dilTcrcnt to that speciíìed in \V orldscale. o r diíTcrenl lo a route agrced betvveen Owners and C harterers,
92
trcight shall alvvays be paid in accordance vvith the W orldscale raie as publishcd or in accordance with any special rate applicable íbr 93
ihc agreed roule. 94
Save in respeci o f thc tim c w hcn treighl is eam ed, the localion o f any iranshipm cnt at sea pursuant to Part II clause 26(2) shall noi 95
be an additional nom inaled port, unless o th e n \ise agreed. for ihc purposes o f this C harter (including this clause 5) and the ữ eig h i raic 96
97
for the voyage shall be the sam c as iTsuch transhipm ent had nol laken place.
98
(2) ít'th e íreight in Parl I clause (G ) is a lum psum am ount and such lum psum ữeig h t is connected w ilh a speciíìc num ber o f load
99
and discharge porls givcn in Part 1 clause (L) and O w ners agrcc thai Chartercrs m ay order the vessel lo additlonal ioad an d 'o r dischargc
100
p o n s noi covercd by ihc agrced lum psum íreight, thc tbllovving shall upply: 101
(a) thc tìrst load port and the final dischargc port shall bc deem ed lo be the pon(s) that form thc voyagc and on vvhich thc 102
lum psuni tVcight included in Part I clausc (Cì) rcCcrs to; 103
(b) IVcighl ỉbr such additional porls shall bc calculated on basis o f deviation. D eviation shal! bc calculatcd on thc ditTerence in 104
105
distance belvvecn thc spccificd voyage (tb r \vhich treight is agreed) and the voyagc acluully p críbnned.
106
BP Shipping M arine Distancc Tablcs (2004). produced by A lo Briac shall bc uscd in bolh cascs. D eviation tim e/bunker
107
consum ption shall be caículalcd using the charter speed and bunkcr consum ption as per ihe speed and consum ptions
108 givcn in Part I
clause (L) o f this Charlcr. lo y
D eviation tim e and lim c spcnl in port shall be chargcd at thc dcm urrage rate in Part I clause (J) o f this C hartcr cxccpt Ihal lim c uscd in 110
port w hich \vould olhenvise quality tbr h alf ratc laytim e and/or dcm urrage under Part II clause (15) (2) o rih is Charter \sill be chargcd 111

al h a lf rale. 112
113
A ddilional bunkers consum cd shal! be paid at rcplacem ent cost, and aclual porl cosls shall bc paid as incurred. Such devialion cosls shall
114
bc paid againsl 0 \v n e rs' Tully docum cnled claim .
115

C laim s, dues 6. (1) Duos and othcr charges upon the vessel, including those assessed by reíerencc lo ihe quantity o f cargo loadcd or
116
and olhcr discharged, and any laxes on treight vvhatsoever shall be paid by 0 \v n crs, and dues and olher charges upon the cargo shali bc paid by 117
charges
Charterers. Howcver, nolvviihsianding ihe tbregoing, w hcrc under a provision ot' \Vorldscale a due o r charge is expressly tbr the accounl 118
ot' O w ners or C harterers ỉhen such due or charge shail be payable in accordance \NÌth such provision. 119
(2) Any costs including those ilem ised under applicablc ‘*Worldscale" as bcing tbr Charterers* accounl shall. 120
121

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Introduction to Shipping 181

A p p en d ix 8 Shellvoy 6

Issued March 2005 “SHELLVOY 6”

PART II
unless othenvise instrucled by C hancrers, be paid by O w ners and reim bursed by Charterers against O w ners’ lully docum enled 122
claim. 123
(3) C harterers shall be discharged and released from all liability in respect o f any charges/claim s (olher than dem urrage 124
and W orldscale charges/dues and indem nity claim s) including but not limited to additional bunkers, detention. deviation, 125
shifting, healing, deadw eight, speed up, slow dow n, dritìing, port costs, additional íreight. Insurance. O w ner m ay send to 126
127
C hancrers under this C h an e r unless any such charges/claim s have been received by C harterer in \vriting, fully and co rrectly
128
đocum ented, within ninety (90) days from com pletion o f discharge o f the cargo concem ed under this C haner. Part II clause 15
129
(3) o f Ihis C harter covers the notitĩcation and íiilly docuinenled claim procedure for dem urrage.
130
(4) lf, arter disconnection o f hoses, the vessel rem ains at b en h for v essel's purposes. O w ners shall be responsible for
131
all direct and indirect costs w hether a d \ise d to O w ners in advance or not. and including charges by Term inal S uppliers/
132
Receivers.
133

Loading and 7. The cargo shall be loaded ỉnlo the vessel at the cxpcnse o f Charterers and, up to the v e s s e rs perm anent hose
134
discharging connections, at C harterers’ risk. The cargo shall be dỉscharged from the vessel at the expense o fO w n e rs and, up to the v esseP s 135
cargo perm anenl hose connections, at O w ners’ risk. O wners shall. unless otherw ise noliíìed by C harterers o r their agents. supply 136
at Ovvners’ expense all hands, equipm ent and facilities required on board for m ooring and unm ooring and connecting and 137
disconnecting hoses for loading and discharging. 138

D eadtreighl 8. C harterers neeđ not supply a full cargo, but if they do not freight shall nevertheless be paid as if the vessel had been 139
loaded with a fu!l cargo. 140
The term •■full cargo" as used throughout this C harlcr m eans a cargo w hich, together with any collected w ashings (as 141
detìned in Parl II clause 40) retaineđ on board pursuanl 10 the requirem ents o f M ARPO L 73/78, fills Ihe vessel to eith er her 142
applicable deadw eight or h erca p acity stalcd in P an I clause (A ) (I) (iii), w hichever is less, w hile Icaving suíRcient space in the 143
tanks for the expansion o f cargo. If under Part I clause (F) vessel is chartered for a m inim um quantity and the vessel is unable to 144
load such quanlity due to having reached her capacity as staled in Part 1 clause (A) (I) (iii). alw ays leaving sutìicient sp ace for 145
146
expansion ol cargo. then w ithout prejudice to any claim s w hich C hanerers may havc against O w ners, no deadw eight betw een
147
the quantitv loađed and the quantitv shown in Part 1 clause (F) shall be due.
148

Shifting 9. Charterers shall have the right to require the vessel (o shifl at ports o f loading and/or discharging from a loading
149
or discharging benh w ithin port lim ils a n d o r to a w aiting place inside o r outside p o n lim its and back to Ihe sam e o r to another
150
such berth/place once or m ore orten on paym ent o f all addítional expenses incurred. For the purposes o f freight paym ent and
151
shitling the places grouped in Port and Tem iinal C om binalions in \V orldscale are to bc considcrcd as berths w ithin a single p o n .
152
If at any tim e before cargo operations are com plcied it hecom es dangerous for the vessel lo rem ain al thc speciíied berth as a
153
result o fw in d or w ater condilions. Charterers shall pay all additional expenses o f shirtỉng from any such ben h and back to thai 154
or any olher specified berlh within port limils (except 10 Ihe extern that any fault o f the vessel contributed lo such danger), 155
Subject to P an II clause 14(a) and (c) time spcnt shitting shall count against la^tim e or ít lhe vessel is on dem urrage for 156
dem urragc. 157
158
Chartcrers' 10. 11'the vessel is delayed due to C hartercrs’ brcach o f Part II clause 3 Chartcrers shall. subject 10 the term s hereot',
failurc lo give
com pensate O w ners in accordance with P an II clause 15(1) and (2) as if such delay w erc lim e exceeding the laytim e. Such 159
ordcrs
com pensatỉon shall he O w ncrs' soltí rem edy in respccl o f such delay. 160
The period o f such deiay shall be caiculaled: 161
(i) trom 6 hours afìer O w ners nolify Charterers that the vessel is delayed avvaiting nom ination o f loading or discharging 162
p on unlil such nom ination has been received by O wners, or 163
(ii) from 6 hours atter the vessel gives notice o rread in ess at the loading o r discharging port until com m encem ent o f 164

loading or discharging, 165

166
as the case m ay be, subject alw ays to the sam e cxceplions as Ihose set out in Part II clause 14. A ny period o f delay in
167
respect o f \vhich CharTerers pav coiĩipensatiop pursuant to this clause 10 shall be excluded from anv calculation o f tim e for
168
laytỉm e or đem urrage m ade under any other clausc o f this Charter. Periods o f delay hereunder shaii be cum ulative for each port,
169
and Owners m ay dem and com pensation arter the vessel has beeii delayed tb r a tolal o f 20 runiiing days, and thereafter after each
170
succeeding 5 running days o f delay and at the cnd o f any delay. Each such dem and shall show the period in respect o f w hich
171
com pensation is claim ed and the am ount due. C harterers shall pay the full am ount due within 14 days after receipt o f O vvners’
172
dem and. Should ('harterers fail to make any such paym ents Ovvners shall have the right 10 term inate Ihis C harter by giving 173
»ritteii notice to C harterers or their agents. ttilh o ut prejudice to any claim s which Chartcrers or O w ners m ay h a \e against each í 74
other under this C harter or otherw ỉse. 175
176
Laydays/ 11. Should the vessel not he ready to load by noon local lime on the term ination date set out in Part I
Term ination clausc (C) C harterers shall have Ihe option oi tem iinating th]s Charter unless the vcssel has becn delaycd d u e 10 177
C harterers’ change o f orders pursuant 10 Part II clause 26, in w hich case the laydays shall be extendcd by the period o f 178
such delay. 179
180

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modiíication made to the pre-printed text of thls document vvhich is nol clearly visỉble, the text of the onginal BIMCO approved document shall apply- BIMCO assum es no
responsibility for any loss. damage or expense as a result of discrepancies between the orlginal B IM C O approved document and th is Computer generaled documenl.

182 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issued March 2005 “ S H E L L V O Y 6”

PART H 181
A s soon as Owners becom e a u a re ihat the vessel will nol be ready to load by noon on the term ination dale. O w ners w ill give notice to 182
C harterers declaring a new readiness đaie and ask C hartercrs to elect \vhether or not to term inate this Charter. 183
NVithin 4 days after such notice. C hanerers shail eilher; 184
(1) declare this C harter lerm inated or, 185
(ii) coníìiTn a revised set o f laydays w hich shail be am ended such that the new readiness date stated shall be the com m encem ent 186
187
date and the second day iherearter shall be the lerm ination date or.
188
(iii) agree a new sel o f laydays or an extension lo the laydays m utually acceptable to Owners and Charterers
189
The provisions o f ihis clause and ihe exercise or non-exercise by C harterers o f iheir option to lerm inate shall not prejudice any
190
claim s w hich Charterers or Owners may have against each other.
191
Laytim e 12. (1) The laytim e for loading, discharging and all other C harterers’ purposes w hatsoever shall be the num ber o f running hours 192
speciíìed in Part 1 clause (I). C harterers shall have ihe righl to load and discharge at all tim es, including night, provided thai they shall 193
pay for all extra expenses incurred ashore. 194
(2) Ifv essel is able to. and C harterers so inslruct, the vessel shall load ea rlierth an the com m encem enl o f o f laydays and Charterers 195
shall have the beneíìt o f such lim e saved by w ay o f offset from any dem urrage incured. Such beneíìl shal! bc the tim e between 196

com m encem eni o f loading untiỉ thc com m encem enl o f ihe original laydays.
197
198
N olice ot' 13. (1) Subject to the provisions o f P an il clauses 13 (3 )an d 14,
199
rcadiness/ (a) Tim e at each loađing or discharging port shall com m ence to run 6 hours after the vessel is in all respecls ready to
R unning timc 200
load or discharge and \vriltcn nolice thereof has been lendered by the m aster o r O w n ers’ agcnts to C hartcrers or 20!
their agenls and thc vesse! is securely m oored al the specitìed loading or discharging berih. H owever, ifth e vessel 202
does not procced im m ediatcly lo such berth tim e shall com m ence lo run 6 hours aíter (i) thc vesscl is lying in ihe 203
area w here she w as ordcrcd lo w ait or, in the absence o f any such speciíìc order, in a usual vvailing arca and (ii) 204
w ritten notice o fre a d in c s s has bccn lendcred and (iii) the speciíìed berth is accessible. A loaditig or discharging 205
206
berth shall be deem ed inacccssible only ibr so long as the vessel is or w ould be prevented from proceeding to it by
207
bad w eather, tidal condilions, icc, avvailing daylight. pilot o r tugs, or port tratììc control requirem ents (except those
208
requirem ents resulting from ihc unavallabilily oTsuch bcrth or oTthc cargo). If C harĩerers fail to specify a berth at
209
any port, the íìrst berth at which the vcsscl loads or discharges the cargo or any part thereot'shall be deem ed to be
210
ihe speciíìed berth at such porl for the purposcs o f ihis clause. 211
Nolicc shall nol bc lendered betbre com m encem ent o f laydays and nolicc tcndcred by radio shall qualiíy as Nvritten 212
notice providcd il is confirm ed in vvriiing as soon as reasonably possiblc. 213
Tim e shall ncvcr com m cnce betbrc six hours atìer com niencem eni o f laydays unless loading com m cnces prior lo 214
this tim e as proviđed in clausc 13 (3). 215
If Owners ỉầil; 216

(i) to obtain C ustom s clearance; and/or

217
218
(ii) to obtain free pralique unless this is not cuslom ary prior to bcrthing; and/or
219
(iii) to have on board all papers/certiíìcates required to pcríorm this Chartcr, eilhcr vviihin ihe 6 hours artcr notice
220
o f rcadiness originally tendered or when tim e \vould othenvise norm ally com m cncc undcr this C harter, then 221
ihe original noticc o f readiness shall not be valid. A new notice o f readiness m ay only be tcndcrcd when 222
Custom s clearance and or tVce pralique has been granted and/or all papers/certiíìcates rcquired arc in order 223
in accordancc wilh rclcvanl aulhoritics' requirem ents. Laytim e or dem urrage, if on dem urragc, w ould ihcn 224
com m ence in accordancc wiih the tcrm s o f ihis Charter. All tim e, costs and expenses as a result o f dclays 225
due to any oTihe íbregoing shall be for O w n ers' account. 226
227
(b) T im eshali:
228
(i) continue lo run unlii the cargo hoscs have been disconnectcd,
229
(ii) recom m ence tw o hours af\er disconncction o f hoses ifth e vessel is delayed for Charterers* purposes and shall
230
continue until the term ination o f such delay provided thai i f the vessel w aits at any place other than the berth, 231
any lim e or part o f the time on passagc to such other place that occurs after tw o hours from disconneclion o f 232
hoses shall not count. 233
(2) ífih e vessel loads or discharges c a rg o b y transhipm ent at sea lim e shall com m ence in accordance w ith Part II clause 13 (I)(a ), 234
and run unlil transhipm ent has been com pleted and the vessels havc separated, alw ays subject to Part II clause 14. 235
(3) N olw ithsianding anything else in this clause 13, if C harterers start loading o r discharging the vessel b etbre tim e w ould 236
237
otherw'ise slart lo run under ihis C harter, tim e shall run from com m encem enl o f such loading or discharging.
238
(4) For Ihe purposes o i 'Ih is clause 13 and o f Part II clause 14 and Part 11 clause 15 ‘•time” shall mean laytime
239
240

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Introduction to Shipping 183

A p p e n d ix 8 Shellvoy 6

Issued March 2005 “SHELLVOY 6”

P A R T ll

or tim e counting Ibr dem urrage. as ihe case m ay be. 241

Suspension 14. Tim e shall not counl when; 242

o tlitn e 243
(a) spent on inw ard passage trom ihtí vesseKs u a itin g area to the loading or discharging bcrth s p eciík đ by
244
C harterers, even il lightening occurred at such w aiting area; or
245
(b) spent in carrying out vessel operations, including bul not limited to bunkering, discharging slops and lank
246
w ashings, and handling ballast, exccpt to the extent thai cargo operations are caư ied on concurrently and are
247
not delayed thercby; or
248
(c) lost as a result of; 249
(i) breach oí this C harter by O wners; or 250
(ii) any cause allributable lo ihe vessel, (including but nol limiied to the vvarranties in Parl 1 (A ) o f ihis 251
C haner) including breakdovvn o r inetĩiciency o f the vessel; or 252
(iii) strike, lock-out, stoppagc or rcstrainl o f labour o f m asler, oftìcers or cre\v o f ihe vessel o r tug boals or 253
pilot.
254
D em urrage 255
15. ( I ) C harterers shall pay dem urrage at the rale speciíìed in Part 1 clause (J ).
It the dem urrage rate speciíied in Part I clause (J) is expressed as a perceniage o f VVorldscale such perccntage shall bc 256
applied to the dem urrage rate applicablc to vessels o f a sim ilar size lo the vessel as provided in W orldscale or, for the purpose 257
258
ol clause 10 and/or if this C haner is tcrm inated prior to ihc com m cncem cnt o f loading, in NVorldscale current at the term inalion
25Q
dalc specificd in P a r t! clausc (C).
260
D em uưage shall bc paid per running day or pro rala for part thereot' Ibr all lim c Nvhich. undcr ihc provisions o f ihis
261
Charter, counts againsl laylim e or íbr dem urrage and vvhich exceeds the laytim e speciíìtrd in Part [ clause (1). C h artcrers'
262
liability for exceedine the laytim e shall be absolute and shall not in any case be subject to the provisions o f Part n clausc 32. 263
(2) If, hovvever, all or part o f such dem urrage arises oul o t'o r results from íire o r explosion or strike or railurc/brcakdow n 264
o f planl and/or m achinery at ports o f loading and/or discharging in o r about the plant o íC h a rterers. shippers o r consignees o f 265
the cargo (not being a íìre or explosion caused by ihc negligence o r wiUul act or omission o t Charierers. shippers o r consignees 266
o f ihe cargo or ihcir respeclivc servants o r agcnts), aci o f (io d . acl o f w ar, riot, civil com m otion, or arrest o r resirainl o f princes, 267
rulers or pcoples, ihc laytim e used an<J/or the rate o f dem urragc shall bc reduccd by h a ir tb r such laylim e uscd and/or for such 268
dcm uưage ơr such parts thereoi’ 269
(3) O w ners shall notily Charterers within 60 days atìer com plelion o fd isc h a rg c if dcm urrage lias bcen incurrcd and 270

any dcm urrage claim shall be fully and correctly docum ented, and received by Chartercrs, Nvithin 91) days aílcr com plclion oí' 271
272
discharge . l f O w ners lầil to give notice o f or to subm it any such claim w iih đocum entalion, as required hercin. w iihin ihc limils
273
aỉoresaid. C harterers' liability íbr such dem urrage shail be exlinguished.
274
(4) It any part cargo for olher charterers, shippers or consignees (as the case may be) is loadcd o r dischargcd al thc same
275
bcrth, then any tim e used by the vcssel \vaiting al or tb r such berlh and in loading or dischargina \vhich w ould o lhenvise count
276
as laylinie or if the vessel is on dem urragc for dcm urragc, shall bc pro-raled in ihc proporlion Ihat C'harterers' cargo bears to 277
the lolal cargo tc) bc loaded or discharged al such berlh. I f how ever, ihc running o f laylim e o r dctnurrage, if on dem urrage. is 278
solcly allribulablc lo olher parties" cargo operations then such tim c shall not counl in calculating laytim c or dem u ư ag e, if on 279
d em uưage. against C harterers undcr this Charter.
280
Vessel 10. 281
C hartcrcrs shall havc the righl. bul no duty. to havc a reprcsentative atlcnd on board thc vcsscl at atiy loađing and^
inspection or discharging ports and the m aster and Ovvners shall co-operate to facilitale his inspection o f ihc vessel and observation o f 282
cargo (iperations. H owever, such right, and the exercise o r no n -e\ercise thcreof. shall in no way reduce the m aster‘s or ()w n ers' 283
authority over, or responsibility to Charterers and third parties tbr. the vessel and every aspect ol her operation. nor increuse 284
2S5
C haríerers’ responsibilities lo O w ners or ihird parties for the same.

286
Cargo 17. This clause 17 is \vilhout prejudice to P an Ỉ1 clause 2 hereof. (?harterers shall have the right to requirc inspection
inspection 287
o f the v essel's tanks at loading anđ/or discharging ports lo ascenaìn the quantily and quality o f the cargo, w ater and residues
288
on board. D epressurisation ot' ihe tanks lo perm it inspeclion and/or ullaging shall be carried out in accordancc vvith the
289
recom m endations in thc latest edition o f the I S G O n guideỉines. C harterers shali also have the right to inspecl and lake sam ples 290
from ihe bunker tanks and other non-cargo spaces. Any dclay to the vessel caused by such inspection and m easurem ent or 291
associalcd depressurising/repressurising o f tanks shall count against laytim e, or if the vessel is on dem urrage, for dem urrage. 292

C argo 18. ỉ'he inasler shall ascertam ihc contenis o í a)l lanks bcfore and atler loading and beforc and aftcr đischargỉng. aiiu 293
m easurem eni shall prepare lank-by-tank ullage repons o f the cargo, w aler and residues on board which shalỉ be prom ptly inade available to 2^4
C harterers or their representaiive i f requested. Each such ullage rep o n shall show actual ullage-dips, and d ensities at observcd 295
and Standard tenipcraíure (15° C elsius). All quantilies shall be expressed in cubic melres al botli observed and Standard 296
tem pcrature. 297

ỉnert gas 19. The vesseTs inert gas sysiem ( if any) shali com ply with Regulation 62, C hapter 11-2 o f the 1974 Safeiy ot' 298

This document is a Computer generated SHELLV0Y6 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any
modification made to the pre-printed text of this document vvhich is not clearly visible, the text of the original BIMCO approveđ document shall apply. BIMCO assumes no
responsibility for any loss. damage or expense as 3 result of discrepancies betvveen the original BIMCO approved document and this Computer generated document

184 Institute of Chartered Shipbrokers

 A p p en d íx 8 Shellvoy 6

Issu ed M arch 2005 “ S H E L L V O Y 6”

P A R T ll

Lite at Sea Convenlion as m odiíìed by ihe Protocol o f 1978, and any subsequent am endm ents, and Ovvners vvarrant Ihal such 299
sysiem shall be operated (subjecl lo the provisions o f Part II clause 2), during loading, throughout the voyage and during 300
discharge, and in accordance vvith the guidance given in the IM O publication “ Inert Gas System (1983)” . Should the inert 301
gas system tầil. Section 8 (Em ergency Procedures) ol'th e said IMO publication shall be strictly adhered lo and lim e lost as a 302
consequence o f such failure shall not counl againsl laylim e or, if ihe vessel is on dem urrage, for dem urrage. 303
304
Crude oil 20. If ihe vessel is equipped for crude oil \vashing C harlerers shall have the righl lo require ihe vessel to crude
w ashing oil w ash, concurrenlly with discharge, those lanks in vvhich C harterers’ cargo is caư ied . l f crude oil vvashing is required 305
by C harterers any ađditional discharge lim e thereby incurred, alw ays subjecl to the next succeeding sentences, shall counl 306
against laytim e or, if t h e vessel is on dem uưage, tbr dem urrage. The num ber o f hours speciíìed in Part 1 clause (A ) (I) 307
(vii) shali be increased by 0.6 hours per cargo tank vvashed, alw ays subject lo a m axim um increase o f 8 hours. I f vessel 308
tầils to maintain 100 PSI throughoul the discharge ihen any time over 24 hours, plus the addilional discharge perform ance 309
alloNvance under ihis clause, shall nol count as laytim e or dem urrage, if on dem urrage. This clause 20 does nol reduce 310
O w ners’ liability for the vessel to períbrm her Service with utm ost despatch as setoul in Part II, C lause 3(1). The m aster 311
312
shall provide C hanerers w ith a crude oil w ashing log idenlifying each tank vvashed, and stating vvhether such lank has been
313
vvashed lo the M ARPO L m inim um Standard or has been the subject o f addilional crude oil \vashing and vvhether requesled
314
by C harterers or othenvise.
315

O verage 21. Any addilional Insurance on the cargo required because o f ihe age o f the vessel shall be for Ovvners’ account.
Insurance 316
317
Ice 22. The vessel shall nol bc rcquircd lo tbrce ice o r to follow iccbreakers. I f ihc m aslcr finds ihal a nom inaled p o rt is
inaccessiblc đuc lo icc, Ihe m aster shall im m cdiately notify C harterers reqưesling revised orders and shall rem ain outside ihe
318
icc-bound area; and if atler arrival at a nom inated p o n there is danger o f the vessel being frozen in, the vessel shall proceed 319
to the nearest safe and ice free position and at thc sam c time rcqucst Charlercrs lo give rcvised orders. 320
In eithcr case if ihe affeclcd porl is: 32!
(i) the tìrst or only loading port and no cargo has been loaded. C harterers shall eilher nom inaie another port, 322
or give notice cancelling this C harter in which case they shall pay at the d em u ư ag e rate in Part I clause (J) 323
tbr the tim e iVom ihc m aslcr’s notifìcalion aĩoresaid o r iVom nolicc o f rcadincss an arrival, as the case m ay 324
bc.unlii the lim e such cancellation notice is givcn; 325
(ii) a loading port and part o f the cargo has been loaded. Cliarterers shal! eilher nom inate another port, o r order 326
the vessel to proceed on the voyage vvithoul com plcting loading in w hich case C harterers shall pay for any 327
deadữ cight arising thereữom ; 328
(iii) a discharging porl, C harterers shall either nom inale anothcr port or order the vessel to proceed to o r relum 329
lo and discharge at the nom inated port. If the vessel is ordered lo proceed lo or retum to a nom inated 330
port, C harterers shall bear the risk o f the vessel being dam aged w hilst proceeding lo or returning to o r at 331
such port, and the w hole period from the tim e when the m asicr’s request for revised orders is received by 332
C harterers until the vessel can sately deparl aíler com pletion o f discharge shall count against laytim e or, 333
334
if the vessel is on dcm urragc, for dem uưage.
335
lf, as a consequencc o f Charterers revising orders pursuant to this clause. the nom inated port(s) or the n um ber or
336
rolation o f ports is changed. tVeight shall nevertheless be paid For the voyage Nvhich the vessel w ould o th envise have
337
pcrrorm ed had the orders not been so revised, such treight to be increased o r reduced by the am ount by which, as a resu lt o f
338
such revision o f orders.
339
(a) the tim c used including any tim c aw aiting reviscd orders (w hich shall bc valued ut thc dem urrage ratc in
340
Part I clause (J)), and
341
(b) the bunkers consum ed, at replacem ent cost and
342
(c) the port charges 343
for the voyagc actually pertbrm ed arc greater or less than thosc that w ould havc bccn incurred on thc 344
voyage w hich. but for ihe revised orders under ihis clause, the vessel w ould have períbrm ed. 345
346
Q uaranlinc 23. Tim e lost due to quarantine shall not count against laytim e or tb r dem urrage unless such quarantine vvas in íbrce
al the tim e when the atTected porl was nom inaled by Charterers. 347
348
A gency 24. The vessePs agents shall be nom inaled by C harterers at nom inaled ports o f loading and discharging. Such
349
agenls, although nom inaled by C harlerers, shall be em ployed and paid by O wners.
350

Charterers' 25. ( I ) lfth e vessel, w iih the quanlity o f cargo ihen on board, is unable duc lo Inadequalc depth o f w aler in the port
351
obligation at safe!y to reach any speciíìeđ discharging berth and discharge the cargo ihere alw ays safely atìoal. C harterers shall sp eciíy a
shallow draft 352
localion within port limils w here the vessel can discharge sutlìcient cargo into vessels or lighters to enable the vessel safely 353
porư
to reach and discharge cargo at such discharging berth, and the vessel shall lighten al such location. 354
Lightening
in pon (2) If the vessel is lighlened pursuanl lo cỉause 25( 1) then. for the purposes o f the calculation o f laylim e and dem urrage,
355
the lighlening place shall be treated as the íìrst dischargine berth vvithin the port \vhere such lightening occurs. 356

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Introduction to Shipping 185

A p p e n d íx 8 Shellvoy 6

Issued March 2005 “ SHELLVOY 6”

P A R T II

C harterers’ 26. (1) ir, aí\er loading and or discharging ports have been nom inated. Charterers wish lo vary such nom inations or 357
orders/ their rotalion, C harterers m ay give revised orders subject lo Part I clause (D ) and/or (E), as Ihe case m ay be. C harterers shall 358
Change o f 359
reim burse O w ners al the dem urrage rate provided in P an I clause (J) for any deviation or delay \vhich m ay result iheretVom and
orders/Parl
shall pay at replacem enl cost for any exira bunkers consum ed. Charterers shall not be liable tb r any other loss or expense w hich 360
cargo
361
transhipm ent is caused by such variation.
362
(2) Subjecl to Part II clause 33(6), C harlerers m ay order the vessel to load anđ/or discharge any p an o f the cargo by
363
transhipm ent at sea in the vicinily o f any nom inated porl or en route betvveen tw o nom inaled ports, in which case unless
364
Charterers elect. (w hich they may do at any tim e) to treat the place o f such transhipm ent as a ỉoad o r discharge port (subject to 365
Ihe num ber ofp o rts and ranges in Part 1 clauses (D) and (E) o ĩth is Charter), C harterers shall reim burse Owners at the d em u ư ag e 366
rate speciíìed in Part I clause (J) for any additional steam ing tim e and/or delay which m ay be incuưed as a consequence o f 367
proceeding to and from the location at sea o f such transhipm ent and, in addilion. C harterers shall pay at replaccm ent co sl for 368
any extra bunkers consumed. 369
(3) Owners vvarrant ihat the vessel, m aster, oíĩìcers and crew are, and shall rcm ain during this Charter, capable o f safely 370
371
cairying oul all ihe procedures in the current edition o f the IC S/O C IM P Ship to Ship Transfer G uide (Petroleum ). OvvTicrs
372
turther w aư ant that when instrucied lo pertbrm a ship to ship transler the m asler O lììcers and crew shall, at all lim es, com ply
373
with such procedures. C harlerers shall provide, and pay íbr, ihe necessary equipm enl and, if necessary, mooring m aster, for
374
such ship to ship operation. 375

íĩeaiing o f 27. lf Charterers require cargo heating the vessel shall, on passage to and w hilst at discharging port(s), M aintain ihc 376
cargo cargo al the loadcd tem perature or ai the lem peraiure slateđ in Part 1 clause (A ) (I) (iv), \vhichevcr is the lower. C harterers m ay 377
request ihat the tem perature o f the cargo be raised above or low ered below that at W'hich it w as loadcd, in u h ic h evenl O w ncrs 378
shall usc their best cndeavours to com ply with such requesl and C harterers shall pay at replaccm cnt cost for any additional 379
380
bunkers consum ed and any consequential delay to the vessel shall count against laylim e or. i f ihc vessel is on dem urragc. Ibr
381
dem urrage.

3S2
ETA 28. (1) O wners shall give Charlerers a tim e and đaie o f expected arrival al thc fìrsl load porl o r it' ihc loađing rangc is 383
in the A rabian G ulf, the tim e o f her expecied arrival o tĩQ u o in Island (hcreinalìcr called “ load port” in ihis clausc) al ihc dalc o f 3 «4
Ihis Charter. O w ners shall tlirther advise C harterers at any time betw cen ihc C'harter datc and anrival al load porl o f any varialion 385
o f 6 hours or m ore in v essel’s expected arrival tim e/date at the loađ porl. 386
(2) O w ners undcrtakc* ihaí, unless C harlcrers rcquire olhenvisc, ihc m astcr shall: 387
(a) advise C harterers im m edialcly on leavlng the final porl o f cail on Ihe previous voyage oí the lime and daỉe 38S
3«9
o f ihc vcssePs cxpcclcd aư ival al thc firsl loading port and shall ílirther advise C harterers 72, 48, 36, and
24 hours bclbre ihe expccted arrivaỉ lime/daie.
3^1
(b) advise Charterers im m ediaiely arter departure írom the tìnal loading port, o f the vesscl’s expecttíd liinc o f
m
arrival at thc tìrst discharging port o r the arca at sca to w hich the vessel has been instructed to proceed for m
vvircless orders, and confirm or arnend such advice not later than 72, 48. 36 and 24 hours before the vessel 3^4
is due at sưch porl or arca; 3*^5
(c) advise Charlerers im m cđiatcly o í any variation o í'm o re than six hours trom (ỉxpccted tim es ot arrival ai 3%
loading or đischarging ports. Ọ uoin Island o r such area at sca to Charterers; 3*Í7
(d) address all m essages as speciíìed in Part I clausc (K). 398
3*^9
(,)wners shall be responsible for any consequences or addilional expcnses arising as a result o f non-com pliance w iih ihis
400
clause.
401
(3) l f at any tim e prior to the teiìder ot' notice o f readincss al Ihe íìrsi load port, the vcssel ceases to com ply vviih ihe
4^32
description set out in Part 1 clause (A ) and in any questionnaireís). ihc O w ners shall inim ediately noliíy C harterers o rtlie sam e, 4i)3
providing full particulars. and explaining w hal sleps O w ners are laking to ensure that the vessel will so com ply. Any silence or 4J4
íailurc on thc p an o f C harterers to respond to or any inaclion taken in respect o f any such notice shalỉ not am ount to a \vaiver o f 405
any rights or rem edies vvhich C harterers may have in respecl o f the mallers notiíied by O wners.
416
Packed 29. C harterers havc the option o í shipping Products an d 'o r general cargo in available dry cargo space, the Q uanlity 4^)7
cargo 4-)8
being subject lo thc m aster’s discretion. Preight shall bc payable at the bulk rate in accorđance vvith Part II clause 5 and
4')9
C hanerers shail pay in addition all expenses incurred solely as a resuli o f the packed cargo being carrieđ. Deiay occasioỉied to
410
Ihe vessei by the excrcisc o f such option shall count against laytim e or. if the vessel is on dem urrage. tbr dem urrage.

-4(1
Sublelting/’ 30. C harterers shall have the oplion o f sub-chartering the vcssel and/or o f assigning this C harter to any person or 412
A ssignm ent persons, biit C harterers shall alw ays rem ain responsible for Ihe duc fulíìlm ent o ĩa ll the term s and conditions o f this C harler. 413
A dditionally ChartcTcrs may novate Ihis ch ailer to any com pany o f ihe Royal D utclvShell G roup o f Com panies. 4Í4

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186 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issu ed M arch 2005 “SHELLVOY 6”

PART II

Liberty 31. The vessel shall be at liberty to low or be tow ed, lo assist vessels in all positions o f distress and to deviate tb r 415
the purpose o f saving lite or property. ()n the laden voyage the vesscl shall noi lake on bunkers or deviale o r stop, except as 416
allow cd in this clause 31, w ithout prior perm ission o f C harterers, Cargo Insurers, and Ovvners’ P&I Club. 417

Exceplions 32. (1) The vessel, her m asler and Owners shall not, unless o lh e ru ise in this C harter expressly provided, be liable 418
for any loss o r dam age or delay or tầilure arising or resulting írom any acl, neglect o r d eíau ll o rih c m aster, pilots, m ariners 419
o r other servanls o f Ovvners in the navigalion or m anagcm cnl o f the vessel; fire, unless caused by ihe actual íầull or privity 420
o f O w ners; collision or stranđing; dangers and accidents o f the sea; explosion. B ursling o f boilers, breakage o f shaữs or any •
latenl d efect in hull, equipm ent or m achinery; provided, how ever, that Part I clause (A ) and Part II clauses 1 and 2 h ereo f
423
shall be unaffected by the foregoing. Purther, neither the vessel, her m aster or Ovvners, nor Charterers shall, unless othenvise
424
in this C harter expressly provided, be liable tbr any loss or dam age or delay o r failure in perfonnance hereunder arising or
425
resulting from act o fG o d , acl o fw a r, act o fp u b lic enem ies, seizure under legal process, quarantine resirictions, strikes, lock-
426
outs, reslraints o f labour, riots, civil com m otions or a ư e st or restraint o f princes, rulers o r people. ^ 27
(2) N othing in this C harter shall be conslrued as in any w ay restricting. excluding o r w aiving the right o í'O w ners o r o f
any olher relevanl persons lo lim it their liabilily under any available legislation or !aw.
(3) C lause 32(1) shall nol apply to or atTect any liabilily o f Ovvners or the vessel o r any o lher relevant person in 420
respect o f 43 Ị
(a) loss or dam age causeđ to any berth, jelty, dock, dolphin, buoy, m ooring line, pipc or crane or o ther 432
works or cquipm enl Nvhatsoever at or near any porl to Nvhich the vessels may proceed under this Charter, 433
\vhether or not such works or equipm ent belong lo Charterers, or 434
(b) any claim (vvhelher broughl by C harlcrers or any o ther person) arising out o f any loss o f or dam age to 435
or in connection with the cargo. A ny such claim shall be subject to the H ague-V isby Rules or the H ague 436
Rules, or the Ham burg Rules as thc case m ay bc, which oughi pursuant to Part II clause 37 h e re o fto have 437
been incorporated in the relevant bill o f lading (vvhether o r not such Rules vvcre so incorporaied) or, if 438
no such bill oflaU ing is issued, lo the H aguc-V isby rules unlcss the Ham burg Rules com pulsory apply ^^39
in vvhich case to the H am burg Rules.

Bills o f 33. (1) Subjcct to ihc provisions of'this clause C harterers may require the m aster to sign lavvtul bills o f lađing for
any cargo in such íbrm as Charterers direct.
(2) The signing o f bills o f lading shall be \vithout prejudice to this C harler and C harterers hereby indem nify Ovvners 443
444
against all liabilities thai m ay arise tVom signing bills o f lading lo ihc extern ihat Ihc sam e im pose liabililies upon O w ners in
445
excess o f or beyond those im posed by this Charter.
446
(3) All bills o f lading prescntcd lo the m aster for sig n atu rc, in ađdition 10 co m plying w ith the R equirem enls o f
447
Part lí clauses 35, 36 and 37. shall include or etTectively incorporale clauses substantially sim ilar lo ihc Icrm s o f Parl II
clauses 22. 33(7) and 34.
(4) All bills o f lading presenttíd íbr signature hcrcundcr shall show a nam ed port o fd isch arg e. l f when bills o í lading
arc prescnied íbr signature discharging port(s) havc bccn nom inatcd hcrcundcr. thc discharging port(s) show n on such bills ^5 ị

o f lading shall bc in confom iity vviih Ihc nom inalcd port(s). l f at the lim c o f such presentation no such nom ination has becn 452
madc hereunder, the discharging port(s) shovvn on such bills o f lading m ust bc Nvithin Part 1 clause (E) and shall be deem ed 453
to have bcen nom inaled hercunder by virtue o f such presentation. 454
(5) Articlc III Rules 3 and 5 o f the H aguc-V isby Rulcs shall apply to thc particulars included in the bills o f lading as 455
if C hartercrs w ere the shippers, and the guarantee and indem nity therein contained shail apply to thc dcscriplion o f ihc cargo 456
furnished by or on b iih airo fC h artercrs. 457
(6) Notvvithstanding any other provisions o f this C harter, Owners shall be obliged to com ply wilh any ordcrs from 458
C hariercrs to discharge all or part o f Ihc cargo providcd that they havc receivcd from Charterers w ritten conHrmation o f 459
such orders.
(f C hartcrcrs by leiex, facsim ile or other form o f w rilten com m unication thai speciíìcally reters to this clause request 461
462
Ovvners to discharge a quantity o f cargo either;
463
(a) without bills o f lading and/or
464
(b) at a discharge place olher than that nam ed in a bill o f lading and/or
465
(c} ỉhat is different from the bil! o f lading quantity
ihen Owners shall discharge such cargo in accordance w ith C h an e rers’ ìnstructions in considcration o f receiving the
Follow ing indemnity svhich shall be deem ed to be given by C harterers on each and every such occasion and w hich is limited
in vaỉue to 200 per cent o f the C .i.F . value o f the cargo on board:
(i) C hanerers shall indem niíy O wners, and O w n ers’ servants and agents in respect o f any liability loss 4 7Q
or dam age o f \vhalsoever nature (including legal cosls as betw een attom ey or solicilor and Client and 471
associated expenses) w hich Owners m ay susiain by reason o f delivering such cargo in accordance w ith 472
C harterers’ request. 473
(ii) l f any proceeding is conim enced againsl O w ners o r any o f O w ners' servanls o r agcnts in connection 474
with the 475

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Introduction to Shipping 187

A p p en d ix 8 Shellvoy 6

h s u e d M arch 2005 “SHELLVOY 6”

PA R T II

vessel having delivered cargo in accordance w iih such request, Charterers shall proviđe O w ners or any 476
o f O w ners' servants or agents from tim e lo time on đem and vviih suAìcient funds to detend the said 477
proceedings. 478
(iii) ỉ f the vessel or any other vessel or property belonging lo O w ners should be anrested or đetained, o r if the 479
arrest or delention thereof should be ihreatened, by reason o f discharge in accordance w ith C harterers' 480
inslruction as aforesaid. C harterers shall provide on dem and such bail or other security as m ay be required 481
to prevent such arrest o r detenlion o r lo secure the release o f such vessel or p ro p en y and C harterers shall 4g2
indem nify Ovvners in respecl o f any loss, dam age o r expenses caused by such arresl o r detenlion w hether 483
or not ihe sam e m ay be justifìed.
(iv) C harterers shall, if called upon to do so al any lim e w hile such cargo is in C h arterers' possession, custody 4g 5
or control, redeliver the same lo O wners.
(v) As soon as all original bills o f lading for the above cargo which nam e as đischarge port the place w here delivery
actually occurred shall have arrived and/or com e into C harterers’ possession. Charterers shall produce and
deliver Ihc same lo Ovvners, w hereupon C harterers' liability hereunder shall cease. Provided hoNvever, if
Charterers have not received all such original biils o f lading by 24.00 hours on Ihc day 36 calendar months
afìer the datc ofdischarg e, ihen ihis indem nity shall terminate at ihat lime unless before that tim e Charterers J
have received from Owners vvrilten nolice that:
492
(a) som e person is m aking a claim in connection wiih O w ners delivering cargo pursuant to C harterers' request
493
494
(b) Icgal proccedings havc been com m enced against O w ners and/or carriers and/C harterers and/or any o f their
495
respective servanls or agents and/or ihe vcssel for ihe sam e rcason.
496
W hen C harterers havc receivcd such a notice, then ihis indem nity shall continue in force until such claim or legal
497
procccdings are seltled. Term ination o f this indem nity shall not prejudice any legal righls a party may havc outside ihis inđemnity.
498
(vi) O w ners shall prom plly notify C harterers i f any person (other than a person to vvhom C harterers ordered
499
cargo lo be delivered) claim s 10 be eniitlcd to such cargo and/or if ihe vessel o r any olher propcrly belonging
5Ơ0
to Owners is arrested by reason o f any such discharge o f cargo.
501
(vii) 1'his indem nity shall be govem ed and construed in accordance vvith the English law and each and any
đispute arising out o f or in connection w iih this indcm nity shali be subjecl to the jurisd ictio n o f the High 502
Court o f Justicc o f England. 503
(7) The m aster shall not be rcquircd or bound to sign bills o f lading Ibr any blockadcd port o r for any p o n w hich the 504
m asler or Ovvncrs in his or ihcir discretion consider dangerous o r im possible lo enter o r reach.
(S) Charterers hereby w arranl Ihat on each and every occasion that they issue orđcrs undcr Parl II clauscs 22. 26, 34 or 506
38 they w i l l have ihe authority o f ihc holders ol‘lhe bills o f lading lo give su ch orders, and that such bills o t'la d in g w iil not be 507
lransfcrred lo any person w ho does not concur therein.
(9) O w ners hereby agree ihat original bill(s) o f lading, if availablc, will bc allow cd to bc placed on board. 509
If original bill(s) o f lading arc placed on board. Ovvners agree thai vesse! w ill discharge cargo against such bill(s) o f 510
lading carried on board, on receipl o f receivers' pro o f o f idcntity. 5 11

W a rrìsk s 34. (I)If 512

(a) any loading or discharging port to vvhich the vessel m ay properly be ordered undcr the provisions o f this 5 ]3
C harter or bills o f lading issued pursuanl to this ('h a rte r be blockadcd, or 5 )4
(b) ovving to any vvar, hostilities, Nvarlike operation, civil com m otions. revolutions, o r the operation o f 515
intem ational law (i) entry to any such loading or discharging port or the loading or discharging o f cargo at 516
any such porl be considered bv the m asler o r O wners in his o r their discrction dangerous or prohibited or 5Ị7
(ii) it be considered hy the m aster or O w ners in his or their discretion dangerous o r im possihle o r prohibited 5 Ị ịị
for ihe vessel to rcach anv such loađing or discharging porl, 5 ỊỌ
Charterers shall havc the right to order Ihe cargo o r such part o f it as m ay be aíTected to be loaded or discharged al any 5-)Q
other loading or discharging port w ithin the ranges speciAed in Part I clause (D ) o r (E) respectively (proviđed such other p o n 521
is not blockaded and that enrry Ihereto or loading or discharging o f cargo tỉiercat o r rcaching the sam e is not in the m aster’s or
Oxvners’ opinĩon dangerous or im possiblc or prohibited). 523
(2) lf no orders be receiveđ from C hanerers w iihin 48 hours aỉter Ihey o r Ihcir agcnts havc receivcd from O w ners a ^04
request for the nom ination o f a substilute port, then
(a) if the aíĩected port is Ihc first o r only loading port and no cargo has been loadeđ, this C haríer shall term itiale
526
forth\vith;
527
(b) ií' the affected porl is a loading port and part o f the cargo has already been loadcd, the vesscl m ay procced
528
on passage and C harterers shall pay for any deadfreight so incurred;
529
(c) if the affected port is a discharging pon. Ovvners shall be al liberty lo discharge the cargo at any port vvhich
530
Ihey or the m aster m ay in Iheir or his discretion decide on (w hether within the range speciíìed in P an 1
531
clause (F ) or not) and such discharging shall be dcem ed to be due fu!filment o f the contract o r conừ acts o f
5?2
affreighim em so far as cargo so discharged is concem ed.
533
(3) If in accordance with clause 34( 1) or (2) cargo is ioaded o r đischarged at any such o ther porl. freight shal! be paid as
534
for thc voyage originally nom inated, such treight to be increased or reduced by the am ount by w hich. as a result o f loading or
discharging at such other port. 535

(a) the tim e on voyage including any time aw ailing revised orders (w hich shall be valued at Ihe đem urrage 536
rate in Part I clause (J)), and

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188 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issued March 2005 “ S H E L L V O Y 6”

PARTI

(b) the bunkers consum ed, at replacem ent cosl, and 538
(c) the port charges 539
tbr the voyage actually perform ed are greater or less than those which w ould have been in cu ư ed on the voyage originally 540
nom inated save as aforesaid. the voyage actually perform eđ shall be treated for ihc purpose o f ihis C h an e r as if it w ere the 541
voyage originally nom inaled. 542
(4) The vessel shall have liberty lo com ply vvith any directions or recom m endations as lo departure, arrival, routes, 543
ports o f call, stoppages. deslinations, zones, Nvalers, delivery or in any othenvise vvhatsoever given by the govem m ent o f 544
the nation under w hose Hag the vesscl sails or any olher govem m ent or local authorily including any de faclo govem m ent 545
or local authority or by any person or bođy acting or purporting to acl as o r with the authority o f any such govem m enl or
546
authority or by any com m illee or person having under the term s o f ihe w ar risks Insurance on the vessel the right lo give any
547
such directions or recom m endalions. If by reason o f or in com pliance w ith any such directions o r recom m endations anything
548
is done o r is not done, such shail nol be deem ed a deviation.
549
If, by reason o f or in com pliance wiih any such direclions or recom m endations as are m entioned in clause 34 (4).
550
the vessel does nol proceed to the discharging port or ports originally nom inaled o r to w hich she m ay have been properly
551
ordered under the provisions o f this C harter or bills o f lading issucd pursuanl to this Charter, the vessei m ay proceed to any
552
discharging port on w hich ihe m aster or O w ners in his or their discrelion m ay decidc and there discharge ihe cargo. Such
discharging shall be deem ed to be due fulfilm cnt o f the contracl o r contracts o f aíTreightment and O w ners shall be entitlcd 553
to freighl as if discharging had been efíected at the port or ports originally nom inated or to which the vessel m ay have been 554
properly ordered under ihe provisions o f this C harter or bills o f lading issued pursuant to this Charter. All exlra expenses 555
invoived in reaching and discharging the cargo at any such other discharging port shall be paid by C harlerers and Owners 556
shall have a lien on the cargo for all such exlra cxpenses. 557
(5) O w ners shall pay for all additional w ar risk Insurance prem ium s, bolh for annual pcriods and also for the speciíìc 558
• pcrform ance o f this C harter, on thc Hull and M achincry valuc. as per Part 1 clause (A)( 1) (xiii) applicable at the date o f this 559
Charter, or the date the vessel w as íìxed “on subjects” (\vhichever is the earlier), and all rcasonable crew w ar bonus. The 560
period o f voyage additional w ar risks prcm ium shall com m cnce when the vessel enters a w ar risk zone as designaied by the 561
London Insurance m arket and cease w hen the vessei leaves such zone. l f thc vcssel is already in such a zone the period shall 562
com m cncc on tcndcring notice o f rcadiness under this Charter. 563
Any increase or decrease in voyage addilional w ar risk prcm ium and any period in excess o f Ihe íìrsl íburteen days 564
shall bc for C hartercrs’ account and payable against proveti docum eniation. A ny discount o r rebalc rcfundcd lo Ovvners 565
for \vhatever reason shall bc passed on lo C harlerers. A ny prcm ium s. and increase thereto, attributable to closure Insurance 566
(i.e. blocking and trapping) shall be for O w n e rs' account. 567

Bolh to 35. lf the iiabilily for any collision in which the vessel is involved w hile períbrm ing this C harter íalls to be
568
blam c clausc detem iined in accordance with the laws o f lh e U nited Slalcs o f A m erica, ihc follow ing ciause, w hich shall be included in all
569
bills o f lading issued pursuani to this C harter shall apply:
570
“ If ihc vcsscl com es inio collision with anoihcr vessel as a result o f ihe negligence ol the other vesscl and any acl,
571
neglect or deíầult o f ihe m aster, mariner, pilol o r thtí scrvants o f ihc C arricr in the navigalion or in Ihe m anagem ent o f the
vessel, thc ovvners o f Ihe cargo caư ied hereunder w ill indem niíy the C arrier against all loss or liability 10 the oiher o r non- 572
caư yin g vcsscl or hcr ovvncrs in so lầr as such loss or iiabilily represents loss of, o r dam age to, or any claim w halsoever 573
o f the ONvners o f the said cargo, paid or payablc by thc olhcr or non-carrying vessel or her ow ners to the ow ners o f the said 574
cargo and sel oíì', recouped or recovered by the other or non-carrying vessel o r hcr oNvners as part o f their claim against the 575
carrying vessel or thc Carricr. 576
The íbregoing provisions shall also apply vvherc thc ow ncrs, opcralors or those in charge o f a n y vessel or vessels or 577
objccls othcr than, or in addition to, the colliding vessels o r objects are at íầull in respcct o f a collision o r contacl.” 578
579
General 36. G eneral avcragc shall bc payable according to the Y ork/A ntw erp Rules 1994, as am ended from tim e lo time,
average/ and shall be adjusted in London. All disputes relating lo G eneral A verage shall be resolved in London in accordance wilh 580
N ew Jason English Law. W ilhout prejudice to the foregoing, should ihe adjustm ent be made in accordance with ihc Law and praclice 581
clause o f the U nited States o f A m erica, thc following clause, w hich shall be includeđ in all bills o f lading issued pursuanl to ihis 582
Charter, shall apply; 583
“ In the evenl o f accident, dangcr, dam age or disaster before o r aíter the com m encem enl o f the voyage, resulting 584
from any cause w hatsoever, svhether due to negligence or not, tbr w hich, or for the consequence o f w hich, the C arrier is not 585
responsible, by Slatute, coniract or othenvise, the cargo, shippers, consignees or ow ners o f the cargo shall conlribute w ith the
586
C aư ier in general average lo the pavm ent o f any sacrilìces, losses or expenses o f a general average naturc that m ay be made
587
or incurred and shall pay salvage and special charges incurred in respect o f the cargo.
588
If a salving vessel is ow neđ or operated by the C arrier, salvage shall bc paid for as fully as if the said salving vessel or
589
vessels belonged lo strangers. Such deposil as ihe C arrier or ils agents m ay deem suíììcienl to cover ihe estim ated contribution
590
o f the cargo and any salvage and special charges thereon shall, if required, be mađe by ihe cargo, shippers, consignees or
591
osvners o f Ihe cargo lo ihe C arrier before d elivery.”
592
Clause 37. The following clause shall be included in a!l bills o f lading issueđ pursuanl to this Charter:
Param ounl (1) Subject lo sub-clauses (2) or (3 ) hereoí, this bill o f lading shall be govem ed by, and have effect subject lo 593
the rules contained in ihe International Convention for the U niíìcalion o f C ertain Rules relating to bills o f lading signed al 594
Brussels on 25'^ A ugust 1924 (hereafter the “ H ague R uies") as am ended by the P rotocol signed at B russels on 23rd Pebruary 595
1968 (hereaíìer the “ H ague-V isby Rules” ). N olhing contained herein shall be deem ed to be either a surrender by the carrier 596
o f any o f his rights or im m unilies or any increase o f any o f his responsibilities o r liabilities under the H ague-V isby Rules. 597

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Introduction to Shipping 189

A p p en d ix 8 Shellvoy 6

Issued March 2005 “SHELLVOY 6”

PART 11

(2) lf there is govem ing legislation which applies the Hague Rulcs com pulsorily to this bill o f lading, to the exclusion o f 598
the H ague-V isby Ru!es, then this bill o f lading shall have effect subject to the H ague Rules. N othing herein contained shall be 599
deem ed to be either a suư ender by the carrier o f any o f his rights or im m unities or an increase o f any o f his responsibilities or 600
liabilities under the H ague Rules. 601
(3) Iflh e re isg o v em in g legislation which applies the U nited N alions Convenlion on the C aư iag c o t'G o o d s By Sea 1978 602
(hereaíter the “ H am burg Rules” ) com pulsorily to this bill o f lading to the exclusion o f the H ague-V isby Rules. then this bill o f 603
lading shall have effect subjeci to the Ham burg Rules. N othing herein contained shall be deem ed to be either a surrender by the 604
carrier o fa n y o fh is rights or im m ưnities or an increase o f any o f his responsibilities or liabililies under the H am burg Rules. 605
(4) If any term o f this bill o f iading is repugnant to the H ague-V isby Rules, or H ague Rules or H am burg Rules, if 606
applicable, such term shall be void to that extern bul no further. 607
(5) N othing in ihis bill o f lading shall be conslrued as in any vvay reslricting, excluding or vvaiving the righl o f any 608
relevant party or person to limil his liabilily under any available legislalion and/or law. 609

Back loading 38. C harterers m ay order ihe vessel to discharge and/or backload a part or full cargo at any nom inated port w iihin
610
the loading/discharging ranges speciíìed vvithin Parl 1 clauses (D /H ) and vviihin the rotaiion o f the ports previously nom inated,
611
provided thai any cargo loaded is o f the đescription speciíìed in Part I clause (F) and thai the m aster in his reasonable discrelion
612
delerm ines that the cargo can be loaded, segregated and discharged w ithout risk of’contam ination by, or o f any o ther cargo.
613
Charterers shall pay in respecl o f loading, carrying and discharging such cargo as íollovvs:
614
(a) a lum psum íreight calculated ai the dem urrage rale speciíìcd in Part 1 clausc (J) on any adđitional port time
615
used by the vessel; and
616
(b) any additional expenses, including bunkers consum ed (at repỉacem ent cost) ov er above ihose requircđ to
617
ioad and discharge one íull cargo and port costs w hich included addilional agency costs; and
618
(c) if Ihc vessel is lìxed on a W orldscale rate in P an I clause (G ) then íreight shail alw ays be paid for
the w hole voyage at the rate{s) specitìed in Part I clause (G ) on the largest cargo quantity carried on
619
any ocean leg.
620

B unkers 39. Osvners shall give Chartercrs o r any other com pany in the Royal D utch/Shell G roup o f C om panies first oplion lo
621
quoie for the supply o f bunker requirem cnls for the perlbm iance o f Ihis Charter.
622
O il pollution 40. (1) O w ners shal! ensurc Ihat the m aster shall:
prevention/ (a) com ply wilh M A R PO L 73/78 including any am endm enls ihereot’; 623
Baliast (b) collect the drainings and any lank \vashings into a suitablc tank o r lanks and, alìer m axim um separalion o f 624
managem ent 625
free Nvatcr, dischargc thc bulk o f such w aier overboard, consisteni w ith the above rcgulalions; and
(c) thereaíler notify Chartercrs prom ptly o ílh e am ounts o f oil and free vvater so retained on board and details o f 626
any other \vashings retained on board from earlier voyages (togelhcr callcd ỉhc “collected \vashings”'). 627
(d) nol to load on top o f such “collccled w ashings’ w ithoul speciíìc inslruclions trorn Charterers. 628
(e) provide Charterers w ith a slops certiíìcate 10 be m adc up and signed by ihe m asrer and an indcpendent 629
surveyor/lcrm inal reprcsentative. The certiíìcale shall indicaie; 630
O rigin and com position o f slops, V olum e. Free w atcr and A Pl m easured in barrels al 60 deg F. 631
(2) On being so notiíìed. Charterers, in accordance \vith their rights unđer this clause (\vhich shall include \vithout h32
lim iiation thc righl to dctcrm inc thc disposal o íth e collected u ash in g s), shall bcfore the vessel's arrival at ihe loading bcrth (or 633
if already arri\e d as soon as possiblc lhereaftcr) givc instnictions as to how the collectcd \vashings shall be dealt w ith. Owners 634
shall cnsure ihal thc m astcr on the vesseKs arrival at ihe loađing berth (or if alrcady aư iv cd as soon as possiblc ih crcaíìei) shall 635
arrange in conjunction with the cargo suppliers for ihe m easurem ent o f ihe quantity o f the collected vvashings and shall rccorđ 636
thc same in thc vessePs ullage record. 637
(3) C harterers may rcquirc thc collected \vashings to be dischargcd a&hore al the loading port, in vvhich case ĨIO fa*ight 638
shall be payable on ihem. 639
(4) A ltem atively C harterers m ay require eithcr that thc cargo be loadcd on top o f ihc collecled w ashings and the collected 640
w ashings be dischargcd with the cargo. or thai they be kept separate íroin the cargo in \vhich case C harterers shall pay for any 641
deadw eight incuiTcd thereby in accordance w iih Part II clause 8 and shall, if practlcable, accept discharee o f the coỉlected 642
\vashings at the đischarging port or ports. 643
In either case. provided Ihat the niastcr has rcduced the free vvatcr in the collecteđ w ashings to a m inim um consislenl wilh 644
ihe reteniion on board oí the oìl residues in them and consistcnt wilh sub-clause (l)(a) above, íreight in accordance wiĩh Parl II 645
clause 5 shall be payable on the quantity o f the collecled w ashings as i f such quantity w ere includcd in a bill o f lading and the 646
íìgure theretbre furnished by the shipper provided, hovvever, that 647
(i) if there is a provision in this C harter for a iovver freighi rate to apply lo cargo in excess o f an agreed quantity. 648
freighí on the collecteđ vvashings shall be paid at such low er rate (proviđed such agreed quanllty o f cargo 649
has been loaded) and 650
(ii) if there is provision ir this Charter for a m in im u n car^o q u a rtity 'vhich ir. less than a fu \ \ cargo. Ih cr vvhether 651
or not such m inim um cargo quanlitv is íum ished, freight on the collccted \vashings shall be paid as if such 652
minim um cargo quantity had been fum ished, provided that no íreighl shail be payable in respeci o f any 653
collected \vashings w hich are kept separate írom the cargo and not discharged at the discharge port. 654
(5) V^^enever Chartercrs require ihe collected \vashings to be discharged ashore pursuant to ihis clause. C harterers 655
shall provide and pay for the reception facilities, and the cost o f any shirting there for shall be for C h arterers’ account. Any 656

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190 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issued March 2005 ‘‘S H E L L V O Y 6”

P A R T iI

time lost discharging the collected \vashings and/or shiữing thereíore shall count against laytim e or, if the vessel is on 657
dem urrage. for dem urrage. 658
(6) Owners Nvarrant Ihat the vessel will arrive at the load port vvith segregaled/ clean ballast as detìned by A nnex659
I of
M ARPO L 73/78 including any am endm ents ihereof. 660
661
Oil response 41. (1) O w ners w arranl ihat throughout the duration o f ihis C harter the vessel will be:
pollution and (i) ow ned or dem ise chartered by a m em ber o f the ‘ỉntem ational Tanker O w ners Pollution Pederation 662
Insurance Limited, and 663
(ii) enlered in the Protection and Indem nily (P& I) C lub slated in Part [ clause (A ) I (xii).
664
(2) It is a condition o f ihis C harter that O w ners have in place Insurance cover for oil pollution for the m axim um on
665
offer through the International G roup o f p«fel Clubs bul alw ays a m inim um o f U nited States Dollars 1,000,000,000 (one
666
thousand m illion). l f requested by Charterers, O w ners shall im m ediately fum ish lo Charterers full and proper evidence o f
667
the coverage.
668
(3) O w ners u a rra n l that the vessel carries on board a certificaie o f insurance as required by the Civil Liability
Convenlion for Oil Pollution dam age. Ovvners furiher w arrant Ihat said certificate will be m ainlained eíĩectiv e throughout 669
the duralion o f perform ance under ihis Charter. All lim e, cosls and expense as a result o f O w ners’ íailure 10 com ply w ith the 670
foregoing shall be for O w ners' accounl. 671
(4) Owners w arrant that vvhere the vessel is a “Relevant Ship” , they are a “P articipating O w ner”, both as deíìned in 672
the Small Tanker Oil Pollution Indem niíìcation A greem ent (“ STO PIA ” ) and that the vessel is entered In STO PIA , and shall 673
so rem ain during ihe currency o f this Charter, provided always ihat STO PIA is not term inaied in accordance w ith Clausc 674
V lll o f its provisions.
675
Licn 42. O w ners shall have an absolute lien upon thc cargo and all subíreights for all am ounts due under this charter and 676
the cost o f recovery thereof including any expenses \vhatsoever arising from the exercise o f such lien.
677
Drugs and 43. O w ners are aw are o f the problem o f drug and alcohol abuse and w arrant thai thcy have a Nvritlen policy in force,
678
alcohol covering the vessel, w hich m eels or exceeds the slandards set out in the “G uidelines for the Conlro! o f Drugs and A lcohol on
679
board Ship” as published by O CIM F dated June 1995.
680
0 \vners turther w aư ant that ihis policy shall rem ain in tbrce during the period o f Ihis C harter and such policy shall be
681
adhered to throughoui this Charter.

1TWF 44. Owners warrant that the term s o f em ploym enl o f the vesseP s sta ff and crcw will alw ays rcm ain acceptablc to ^^2
the International Transport W orkers Pedcration on a w orldw ide basis. A)1 lim c, costs and expenses incuired as a result o f 683
O w ners' failure to com ply with foregoing shall be for O w ners’ account. 684

Letters o f 45. ll is a condition ot'lhis C harter that from the lime the vessel sails to Ihe fìrst load porl thcre will be no Letlcr(s) 685
prolesư o f Protest (‘*LOP’”s) or deficiencies outstanding againsi ihe vessel. This refers lo L O P 's or đeíiciencies issued by Term inal 686
[)eficiencies Inspectorate or sim ilar P o n or Term inal or G ovem m ental A uthorities. 5g7

D ocumcnlation 46. Owners shall cnsure ihal ihe m aster and agenls produce docum cnlation and provide C hanerers wiih c o p ie s o f
688
all such docum entation re le v a n t to each port and berlh call and all transhipm ents at sea, including but not lim ited lo:
689
N otice o f Readiness/Statem ent o f Facls/Shell Form i9 x (if Charterers nom inate agcnts under Part II clausc 24)/Timc
690
sheel(s)/LO Ps/H ourly pum ping logs/CO W p crfonn an ce logs by facsim ile (to thc num ber advised in Ihe voyage inslruclions).
691
These docum ents to be faxeđ w ithin 48 hours from sailing from each load or đischarge port or transhipm ent area. lf the vessel
692
does not have a tầcsim ile m achine on board the m aster shall advise Charterers, w ithin 48 hours from sailing from each pon
under this Charler, o f the docum ents he has available and ensure copies o f such docum ents are fax td by agents to Chartcrcrs 693
from the relevanl port o f call or at latest from thc nexl port o f call. C om plying wiih this clause does nol affecl the terms o f Part 694
II clause 15(3) with regard to notiíìcation and subm ission o f a fully docum ented claim for dem urrage or a claim described in 695
Part II clause 6(3) o f this Charter. A ny docum ents to be tầxed under this clause m ay be. altem atively, scanned and e-m ailed 696
to Charterers. If any actions or íầcilities o f Suppliers/R eceivers/Term inal/T ranshipm ent vessels or C harterers, as ap p licab k . 697
im pinge on the vessel's ability to pertbrm ihe w arranties and/or guarantees o f perform ance under this C hartcr thc mastcr 698
m ust issue a LOP to such effect. If the m aster fails to issue such LOP then O w ners shall bc deem ed lo have Nvaived any rights 699
to claim. M aster and agents shaii ensure ihat all docum ents concem ing port/berth and cargo activities at all ports/berths and 700
transhipm ent at sea places are signed by bolh an officer o f the vesseỉ and a representative o f either Suppliers/Receivers/ 701
Term inal/Transhipm ent vessels or C hanerers, as applicable. 702
l f such a signature from Suppliers/R eceivers/Term inal/T ranshipm ent vessels or C harterers, as applicable, is not 703
obtatnable ihe m aster or his agenls should issue a LOP to such eíĩect. All L O P ’s issued by m aster o r his agenls o r received
704
by m aster or his agents m ust be forw arded to C harterers as p er ihe term s o f this clause.
705
706
A dm inistration 47. The agreed term s and conditions o f this C harter shall be recorđed and evidenced by the production o f a (ìxture
note sent to both Charterers and Ovvners vvithin 2 4 hours o f the fixture being concluded. This íìxlure note shall State the name
707
and date o f the Standard pre-printed C harter Part>- Form , on w hich the C harter is based, along wiih all am endm enls/additions/
delelions to such charler party form. AU turth er additional clauses agreed shall be reproduced in the íixture noie with fu!l 708
wording. This íìxlure noie shall be approved and acknoNvledged as correct by both Owners and C harterers to eilher the Ship 709
Broker through w hom they negoliated or. if no Ship B roker w as involved, to each other vvithin tw o w orking days afler íìxture 710
concluded. 711
No formal \vritten and signed C harter P arty vvill be produced unless speciíìcally requested by C harterers or Ovvners or 712
is required by additional clauses o f this Charter. 713

document is a Computer generated SHELLV0Y6 form printed by authority of BIMCO. Any insertion or deletion to the form must be clearly visible. In the event of any
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Introduction to Shipping 191

A p p en d ix 8 Shellvoy 6

ỉssued March 2005 “SHELLVOY 6”

P A R T ll

Cargo 48. Ịf on com pletion o f discharge any liquid cargo o f a pum pable nature rem ains on board (ihe presence and quantity 714
retention o f such cargo having been established, by application o f the w edge ĩorm ula in respect o f any tank the contents o f which do not 715
reach the tbnvard bulkhead, by an independent surveyor, appoinled by C harterers and paiđ jo in lly by O w ners and Charterers), 716
C harlerers shall have the right to deduct from ữ eig h t an am ount equal to the FOB loading port value o f such cargo, cargo 717

In su ra n c e plus freight thereon; provided, how ever, that any action or lack o f aclion hereunder shall be w'iihout prejudice to any 718
719
oiher rights or obligations o f Charterers. under this C harter or othenvise, and provided further that jf O w ners are liable to any
720
third parly in respect o f íailure to discharge such punipable cargo, or any part thereof, C harterers shall indem nify Ovvners againsl
721
such liability up to the total am ount deducted under this clause.

722
Hydrogen 49. Ovvners shall com ply w ith the requirem ents in ISGO TT (as am endeđ from tim e to tim e) concem ing Hydrogen
723
sulphide Sulphide and shall ensure that prior lo aưival al ihe load port the Hydrogen Sulphide {ppm by volum e in vapour) level in all 724
bunker, ballast and em pty cargo spaces is belovv the Threshold Lim it V alue (“TL V ” ) - Tim e W eighted A verage (“TW A "). 725
l f on aưival at Ihe loading term inal, the loading authorities, inspectors or other aulhorised and qualified personnel declare 726
ihat thc H ydrogen Sulphide levels in the vessels' tanks exceed the TLV- TW A and request the vessel to reduce the said level to 727
u iih in ihe TLV-TW A then the original notice o f readiness shall noi be valid. A valid notice o f readiness can only be tcndered 728
and laytim e, or dem urrage limc. if on dem urrage, lo the relevanl authorities can only start to run in accordance with Part n 729
clause 13 wlien the TLV*TWA is acceptable. 730
731
l f the vessel is unable to reduce the levels o f H ydrogen Sulphide w ithin a reasonable tim e Charterers shall have ihe option
732
o f cancelling this C harter w ithoul penalty and Nviihout prejudice lo any claim s w hich Charterers m ay have against O w ners under
733
this Charlcr.

734
Port 50. Owners w arrant that the vesse! will fully com ply with all port and leim inal regulations at any nam ed port in this
735
regulations Charter, and any p o n s lo w hich Charterers may order the vessel to under this C harter in accordance w ith Part 1 clauses (D/E) 736
providcd thai O w ners have a reasonable opportunily lo acquaint them selves vvith ihc regulations at such ports. 737

Port 51. (1) O w ners w an-ant that: 738

regulalions (a) the vessel com plies with the O CIM P recom m endations, current at the date o f this C harter, tbr equipm enl 739
em ployeđ in the m ooring o f ships at single point m oorings in particular for longue type or hingcd bar lype 74Ơ
chain stoppers and that the m essenger from the Chain Stopper(s) is secured on a w inch drum (noi a đram 741
end) and thai ihe operation is lolally hands free. 742
(b) the vessel com plies and operates in accordance w ith the recom m endations, current al the dale o f this 743
744
C harter, contained in the latesl cdition o f O C IM F ’s “ M ooring Equipm enl P rocedures”
745
(2) ir requestcđ by Chartcrers, or in ihc cvenl o f an em crgcncy silualion arising w hilst ihc vcsscl is ai a Single Buoy
746
M ooring {*‘SBM'*), the vessel shall pum p sea w ater, either directly from ihe sea or from vesseP s clean ballast tanks, to flush
747
SBM s Aoating hoscs prior to, during or/afìer loading an d 'o r đischargc o f the cargo; this operalion to bc carricd oul al C'hartercr.s’
748
expense and with tim e counting against laylim e. or dem urrage. if on dem urrage. Subject to O w ners exercising duc diligcnce in 749
carrying oul such an opcralion Chartcrcrs hercby indem nify O w ners for any cargo loss o r cornanìination dircctly rcsulting from 750
this request. If m aster or Owners are approached by Suppiiers/Receivers o r Term inal O perators to undertake such an operation ■^5!
Ovvners shall obtain Charterers* agreem ent beíore proceeding.
752
ISPS/M TSA 52. (1) (a) From the date o f Corning into force o f thc Inteniationaỉ C odc for thc Security oí Ships and o f Port Pacilities 753
and tlie relevant aniendm ents to C hapler XI o f SOLAS (“ ISPS C ode") and the u s M aritim e Transportation Sccurity A cl 2002 754
(“M 7 S A ” ) in rtlalion to the vessel, and thcreafìer during the currency o f this C harter. O w ncrs shall procurg that bolh ihe 755
756
vesscl and “thc Com pany” (as deíìned by the ISPS C ode) and Ihc “ow ner” (as deíìned by thc M TSA) shall com ply with thc
757
requirem ents o f the ỈSPS C ode relating to the vessel and “the Company*’ and the requirem ents o f M TSA relating to the vessel
758
and ihe “owner*’. U pon request O w ners shall provide a copy o f the relevant International Ship Security C ertiíìcate lo Charterers.
759
Ovvners shall providc docum entary evidence o f com pliance with ihis clause 52 (1) (a). (b) Excepl as o th e n \’ise provided in ihis
760
Charter, loss, dam age, expcnse or delay caused by ĩailure on the part o f O w ners or “ihe Com pany’V“ow ner” to com ply wiih ihc 761
requirem ents o f the ISPS Cođe/‘M TSA or this clause shall be tbr O w ners’ account. 762
(2) (a) C harterers shall provide ihe Ovvners w ilh their full style contact details and other relevanl inform ation reasonably
763
required by Ovvners to com ply w ith the requirem ents o f the ISPS C ode/M TSA . A dđitionally. C harterers shall ensure that the 764
contact detaiỉs o f any sub-charterers are Iikewise provided to O wners. Purtherm ore, C harterers shall ensure thai all sub-charter 765
panies they enter into shall contain the follow ing provision: 766
76'7
T h e C ỉiaiteieis shall pruvide the Osvncrs with theit full style coniacl đ etaili and. >vhtre sub-leiling IS p eim ittcd under tiie
768
term s o f the charter party, shall ensure thai contacl details o f all sub-charterers are likew isc provided to ihe O w ners” .
769
(b) Except as othenvise provided in this Charter, loss, dam age, expense or delay caused by íailure on the part o f Charterers
770
to com ply wilh this sub clause Í2) shall be for C harterers' accounl.
771

This document is a C o m p u te r g e n e r a íe d SHELLV0Y6 fo rm p rin te d b y a u th o rity o f BIMCO. A n y ín s e rtio n o r d e le tio n to t h e fo rm must b e clearly vis ib le . In t h e e v e n t o f a n y
moditication made to the pre-printed text of this document vvhich is not clearly visible. the ỉext of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and this Computer generated document.

192 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

ỉssu e d M arch 2005 “ S H E L L V O Y 6”

PART I

(3) (a) W ilhout prejudice lo the foregoing. Ovvners right lo lendcr notice o f readiness and C harterers' liability for 772
dem urrage in respect o f any tim e đelays caused by breaches o f this clause 52 shall be dealt with in accordance vvith Part 11 773
clauses 13, (N otice o f readiness/R unning time), 14, (Suspension o f Tim e), and 15, (D em uư age), o f the charter. 774
(b) Except w here the delay is caused by ()w ners and/or C harterers íầilure lo com ply, respeclively, with clauses (1) and 775
(2) o f this clause 52, then any delay arising or resulling from m easures im posed by a port íacility or by any relevanl authority, 776
under the ISPS C ode/M TSA , shall count as h a lf rate laytim e, or, if the vessel is on dem uư age, h alf rate dem urrage. 777
(4) Except w here the sam e are im posed as a cause o f Owners and/or C harterers ĩaiiure to com ply, respectively, with 778
clauses (1) and (2) o f ihis clause 52, then any costs or expenses related to securily rcgulations o r m easures required by 779
the port facility or any relevant authority in accordance w ith the ISPS C ode/M T SA including, but not limiled to, security 780
guards, launch services, tug escons, porl securily fees o r laxes and inspeclions, shall be shared equally betw een O w ners and 781
Charterers. AM m easures required by the O w ners to com ply with the Ship Security Plan shall be for O w ners' accounl. 782
(5) If either party makes any paym ent vvhich is for the other p arty ’s account according to this clause, the o ther party 783
shall indem nify the paying party. 784
785
Business 53. Ovvners will co-operate w ith C harterers to ensure that the “ Business Principles”, as am ended from limc to 786
principles tim e. o f the Royal D utch/Sheil G roup o f C om panies, which are posted on the Shell W orldw ide W eb (w w w .S hell.com ), are 787
com plieđ with.
788
Law and 54. (a) This C hartcr shall be conslrucd and thc relations belw ecn the parties dclcrm ined in accordancc with the 789
litígation laws o f England. 790
A rbitralion (b) All disputes arising out o f ihis C harter shall be reíerred to A rbitralion in London in accordance w ith the
A rbilration A ct 1996 (or any re-cnactm cnt o r modification lh creo f for ihe lim e being in force) subject to 791
the follow ing appointm ent procedure: 792
(i) The parties shall join tly appoint a sole arbitralor nol later than 28 đays aíter Service o f a request in 793
794
w riting by either p any lo do so.
795
(ii) i f thc partics are unable or unw illing lo agree the appointm ent o f a sole arbilrator in accordance vvith
796
(i) then each party shall appoint one arbitrator, in any event nol later than 14 days after receipt o f a
797
íurther request in vvriting by either party to do so. The tw o arbitralors so appointed shall appoini a
798
third arbiirator bcíore any subslantivc hcaring or fbrthw iih if they cannol agree on a m atler relaiing
799
lo Ihc arbilration.
800
(iii) lf a party tầils to appoinl an arbilrator vvithin the tim e specitìed in (ii) (the “ Party in D eíầult” ), ihe
801
party w ho has duiy appointeđ his arbitrator shall give nolice in w rilitig to the Party in D etầult that
802
he proposes 10 appoint his arbitralor lo act as solc arbiirator.
803
(iv) If the Party in t)cfaull does nol \vithin 7 days o f ihc noticc given pursuanl lo (iii) m akc thc
8Ơ4
requirtĩđ appointm ent and notiíy the olher party that he has done so the other party m ay appoint
SOS
his arbilrator as sole arbitralor w hose aw ard shall be binding on both parties as if he had been so
806
appointed by agreem ent.
807
(V ) A ny aw ard oTthe arbitralor(s) shall be tìnal and binding and not subject to appeal.
808
(vi) For thc purposcs o f this clausc 54 any rcquests or nolices in vvriling shall be sent by fax. c-m ail or
809
tclcx and shall be decm cd reccivcd on thc day o f Iransm ission. 810
(c) li shall be a condition precedent to the righl o f any party to a stay o f any legal proceedings in which 811
m aritim e property has been, or m ay be, arrested in connection vvith a dispute under this Charter, that that 812
parly fum ishes lo the othcr party sccurity to vvhich ihat other party w ould have bccn entitled in such Icgal 813
proceedings in thc abscncc o f a stay. 814
Small claim s (d) In cases vvhere neither the claim nor any counterclaim exceeds the sum o f United States Dollars 50,000 815
(or such other sum as O w ners/C harterers may agree) the arbitration shall be conducted in accordance 816
w ith the London M aritim e A rbitrators’ Associalion Small C laim s Procedure current al the lim e when the 817
arbilralion procecdings are com m cnccd. 818

A ddress 55. Charterers shall dcducl address com m ission o f 1.25% from all paym ents under this Charter. 819
com m ission 820
C onstruction 56. The side headings have been included in this C harter for convenience o f reference and shall in no w ay aữ e cl the 821
construction hereof. 822

This document is a Computer generated SHELLV0Y6 form printed by authority oí BIMCO. Any insertion or delelion to the form must be clearly visible. ỉn the event of any
moditìcation made to the pre-printed text of this document vvhich is not clearly visible, the text of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies betvveen the original BIMCO approved document and this Computer generated document.

Introduction to Shipping 193

A p p en d ix 8 Shellvoy 6

Issued March 2005 “ SHELLVOY 6”

P A R T IIl

A ustralia (1) (a) The vessel shall not transit thc G reat B arrier R ceTlnner Passage, w hclhcr in ballast en route to a loadport or laden, 1
belween the Torres Strait and C aim s, Australia. If thc vessel transits the Torres Strait. thc vessel shall use the outcr 2
re e f passage as approved by ihe A ustralian H ydrographer. Ovvners shall alw ays em ploy a pilol. \vhen transiting the 3
Torres Strait and tbr entry and departure ihrough the R cef tbr ports N orth o f Brisbane, 4

(b) The vessel shall đischarge all ballast w ater on board the vessel and take on íresh ballast \vater, alw ays in accordance 5
6
\vith sate operational proccdures, prior to entering Austraiian waters.
7
(c) O n enterine, w hilst within and vvhilst deparling from thc port o f Sydney Owners and m a s te r shall ensurc ihat the
8
w ater line lo highest íìxed point dislance does nol exceed 51.8 (fìfty one p o in leig h i) metres.
9
(d) l f Charterers or Term inal O perators instruci the vcssel to slow thc cargo opcrations dow n or slop eniirely the cargo
10
operations in Syđney during the hours ot’darkness due to excessive noise caused by the vessel ihen all addiliona! n
lime shall be for O w ners’ accounl. 12
Goods Serv'ices (e)(i) G oods Services Tax (“G S T ” ) im posed in A ustralia has application to any supply made undcr ihis 13
Tax C harter, ihe parties agree that ihc Chartcrer shall account íbr G ST in accordance w ith D ivision 83 ot ihe G ST Aci 14
even if thc O w ncr becom es rcgislered. The ()w n cr acknow ledges that it vvill not rccover from the Cliartcrer an 15
addiiional am ounl on account o f GST. 16
(ii) The O w ner acknow ledges thai it is a non-residenl and Ihat it does not m akc supplies ihrough an enlcrprise carried 17
on in A ustralia as deíìned in section 995-1 o f the Incom e Tax A ssessm ent A ct 1997. 18
19
(iii) The C hanerer acknow ledges that it is rcgistcred. W here appropriate, lerm s in ihis clause have Ihe m eaning set oul
20
in section 195-1 o f thc G ST Acl.

21
Brazil (2) (a) Owners acknovvledge the vessel will have, if C harterers so require, lo enlcr a port or place o f
22
clearance within m ainland Brazil, to obtain necessary clearance from Ihe Bra7.ilian authorities and/or lo pick-up
23
pcrsonncl rcquircd to bc on board during thc loading ol the cargo al Plum incnse FPS(). The vesscl ihcn proeeeds
24
to the Plum inense FPSO w here she can tender her notice o fread in ess. Tim e al Ihc port o f clearancc, taken from
25
aưival at pilot station 10 dropping outw ard pilot to be f'or Ch artercrs’ account and payable ai Ihe agreed dem urrage 26
raie togelhcr with írcight. Hovvcver this lime not to count as layiim c or dcm urragc if on dcm urragc. 27
(b) Kreight paym ent under Part II clause 5 ot this C harter shall be made Nviihin 5 banking days o f receipt by Charterers 28
o f noiice o f com pleiion o f final discharge 29

Canada (3) 0 \v n e rs w arrant that the vessel com plics wiih all thc C anadian O il Spill response regulaiions currenily in Ibrce and ihai the 30
O w ner is a m c m b c ro fa cenitìed oil spill rcsponse organisaiion and ihat the Ovvncrs/vessel shall conlinue lo bc m em b erso rsu ch 31
organisation and com ply vviih thc regulalions and requircm enls o f such organisation throughoui the pcriod o f ihis (.'harlcr. 32
33
Egypt (4) (a) A ny cosls incurred by Charlerers for vesscl garbagc o r in vesscl deballasting al Sidi K.crii shall bc for Osvncrs'
accounl and C hanerers shall deduct such costs íVoni íreight 34
(b) C harierers shall have the opiion for ihc discharge range Eurom ed and/or U nited K ingdom /C oniinenl (G ibraitar 35
H am burg range) to instruct the vessel to transit via Suez Canal. In ihe event that Charterers cxercise this option the 36
37
lbllow ing shall apply:
38
C harlcrers option lo part dischargc Ain Sukhna and rcloud Sidi Kcrir.
2^
C harlerers vvill pay the following wilh tVeight against O w n ers” íully docum cnicd ciaim;
40
(c) tim e incuưed at the dem urrage rate on the passage from the point at \vhich the vessel deviales Irom thc dircct
41
sailing route betw een lasl loadporl and Port Suez, till ihc tcndering o í notice o íre ad in ess aĩ Ain Sukhna, !ess any
42
tim e losl by rcason o f dclay beyond C harterers’ reasonablc conlrol; 43
(cl) tim e incurred at the đem urrage rate on the passage from disconnection o f hoses at Sidi Kerir to thc point at 44
\vhich the vessel rẹjoins Ihe direci sailing routc betwcen Port Saiđ and the íừsi discharge port LIK C ontinent or 45
M editcrranean, less any ìim c lost by reason o f dclay bevond C hartcrers’ reasonable control; 46
íe) lim e incurred at the đem urrage raie betvveen tendering o f notice o f readiness at Ain Sukhna and disconnection 47
o íh o s e s therc; 4S
(0 lime incurred al the dem urrage rate betvveen tendering o f notice o f readiness al Sidi Kerir and disconneclion o f 49
hoses there: 50
51
(g) all bunkerb consum ed during thc pcriods íc) to (f) above al rcplacem ent cost;
52
(h) ali port charges incuưed at Ain Sukhna and Sidi Kerir.
53
Preight rate via Suez shall be based 011 the Suez/Suez flat rate w ithout the íìxed Suez rate ditTerenlial, other than
54
as describcd below (the VVorldscaỉe rates in Part I clause (G ) o f this C harter 10 appiy). A!l canal dues reỉated to
55
Suez ỉaden transit, including Suez Canal port costs, agency íees and expenscs, m cluding but not lim iied to escort
56
tugs and other expenses for canal laden transit, to be Ibr C harlerers’ account and U) be seitled direclly by Ihcm. 57
C harterers' to pay 0 \v n e rs ihe ‘ballasl iransit on ly ’ íìxed rate dineren tial as p er W orldscaÌc logether w iih ữeieht. 58

India (5) (a) In assessing the pum ping effìciency under ihis C harter at p o n s in India, Ovvners agree lo accept ihe record o f 59
pressure m aintained as stated in receiver’s slatem ent o f lầcts signcd by the sh ip 's representative. 60

This d o c u m e n t is a Computer generated SHELLV0Y6 íorm printed by authority of B IM C O . Any inserlion o r deletion to the form must be clearly visible. In the event of any
modification made to the pre-printed text of this document which is not clearly visíble, the text of the original BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies betvveen the original BIMCO approved document and íhis Computer generated document

194 Institute of Chartered Shipbrokers

 A p p en d ix 8 Shellvoy 6

Issued March 2005 “ S H E L L V O Y 6”

PART III

(b) Ovvners shall be aw are o f and com ply with the mooring requirem ents o f Inđian ports. All time, cosls and expenscs 61
as a resuU o f O w ners' tailure to com ply vvith the íoregoing shall be for O w n ers’ accounl. 62
(c) C harterers shall not bc liable for dem urrage uniess the folio\ving conditions arc satisíìed: 63
(i) the requirem ents o f Part 11 clause 15 (3) are m et in tull; and 64

(ii) a copy o f this C harter signed by Ovvners is received by C hartercrs at leasl 2 (tw o) w orking days 65
66
prior lo the vessePs arrival in an Indian port.
67
Charterers undertake to pay agreed dem urrage liabilities prom ptly if the above conditions have been
68
satisíìed.
69

Japan (6) (a) Owners shall supply C harterers with copies of:- 70
(i) G eneral A rrangem enưC apacily plan; and 71
(ii) Piping/Fire Pighting D iagram s 72
as soon as possible, bul al\vays w ithin 4 w orking đays after subjects lifted on Ihis Charter. 73
(b) lf requesled by Charterers. Ovvners shall ensure a Superintendent, tully authorised by O w ners 10 acl on O w ners' 74
and or m aster's behalí', is available at all ports w ithin Japan to attend safety m eetings prior lo v e s s e ĩs arrival at the porl(s) 75
and bc in auencỉance throughout the time in each port and during each cargo opcration. 76
(c) Vessel to rccorđ and prinl oul thc position with date/lim c by G lobal Positioning System when vessel enters 77
78
Japanese Terrilorial W aters (“JT W ” ) in orđer 10 períbrm vessePs declaralion o re n le rin g JTW for crude oil stock piling
79
purpose.
80
(d) If under Part I clause (E) ot this C harter Japan, o r in particular ports or berths in Tokyo Bay and o r the SBM
81
al UBE Rcfmery, arc discharge oplions and ii'lh c vessel is ovcr 220,000 m etric tons dcadw eighl and has nol prcviously
82
discharged iti Tokyo Bay or the SBM al U BE R eíìnery then; 83
(i) Ovvners shall subm it an application o f Satcly Pledgc Letter contìrm ing that all safcty m casurcs will bc 84
com plied w ith: and 85
(ii) Present relevant ship dala to the Japanese M aritim e Saíety Agency. 86
Ovvners shall com ply with ihc abovc rcquircm cnls as soon as possiblc bul alw ays vviiliin 4 u o rk in g days aíler 87
subjects liíled on this Charter. 88

(e) lf Charicrers instrucl ihe vesscl lo makc adjustm cnl to vcsscPs arrival đalc/lim c at discharge pon(s) in Japan, any 89
90
adjustm ents shall be com pensated in accordance vviih P an I claust* (L) o f this Charter.
91
11'vessel is ordercd to drirt o ffJap an , at a localion in O w ncrsV m astcr’s oplion, ihen ihc lbllow ing shall apply:-
92
(i) rim e tVom vcssePs arrival at dritting location lo ihe time vessel cleparts, on rcccipt o íC h a rtc rc rs’ instruclions,
93
trorn such locaiion shall be íbr C hartcrers' account at the dem urrage rate stipulated in Part 1 clause (J) oí'this
94
Chartcr. 95
(ii) Bunkers consum ed w hilst drifting as deíìned in sub clause (e)(ì) above shall be tb r C harterers' accounl at 96
rc p la c c m c n l c o sl. O w n e rs sh al) p ro v id c full d o c u m c n la tio n U) su p p o rt a n y c la im unclcr ih is cla u sc . 97

N ew Zcaland (7) (a) Owncrs o fv c s s e ls cairying Pcrsislcnl Oil - as defined by thc International G roup o f p& l Clubs - vvhich shall 98
alw ays incorporate Crude and Fuel Oil, N on Persistent Oil as deíined by the Inlernational G roup of'P& l Clubs ' w hich shall 99
aisvays incorporalc Pclrolcum Products: and C hem icals, Nvarranl ihat the vcssel shall com ply al a!l lim cs wiih ihc M arilimc 100

Satety A uthorily ot'N ew Z ealand's V oluntary R outeing Code Ibr Shipping \vhilst transiting the N ew Z ealand coast and/or en 101
102
roulc to or from ports in Nevv' Zcaland and w hclher ladcn o r in ballasl,
103
(b) the IblloNving voyage routing will apply:
104
(i) vesscl is to kccp a m inim um o f 5 miles o ff ihc Ncw /e a la n d coasl (and outlying islands) until approaching
105
ihe p o rt's pilot slalion, w ith the tbllovving exceptions;
106
a) to pass a m inim um o f 4 m iles ofT ihc coast whcn transiling C ook Strait; 107
b) lo pass a m inim um o f 5 miles to the east o f Poor K nights ỉslands and ỉ ligh Peaks Rocks; 108
c) lo pass a m inim um ol'3 milcs íVom land \vhen transiling the C olville or Jellicoe Channcls. 109
lí due to safe navigation and or other w eather relaied reasons the vessel proceeds on a diíTerent route to those sel out above, 110
thc O w ncrs and m aster shall im m ediatcly advise C^hartcrers and O w ncr’s agcnts in N ew Z ealand o1'the route being foỉlowed 111
and the reasons tbr such deviation from the above w arrantcd route. 112

Thailand (8) !f Part 1 clause (E) o f this C harler incluđes option to discharge al a p o il/b en h in Thaiiand then Ihe following, vvhich is 113
consistent w ith industry practice for ships discharging in Thailand, shall apply over and above any other term s contained 114
115
\vithin this Charter:-
116
(a) Laylim e shall be 96 running hours
117
(b) Preight paym ent under Part !I clause 5 ot'Ih is C harter shall be made within 15 days o f receipl by C hanerers o f
118
nolice o f com plelion o f final discharge o f cargo.
119
(c) Cargo quantity and quality m easurem enls shall be carried out at load and discharge porls by m ulually appointed 120
indepenđenl surveyors, w ith costs to be shared equally belween Ovvners and Charterers. 121

This document is a Computer generated SHELLV0Y6 form printed by aulhority of BIMCO. Any insertion or đeletion to the íorm musl be clearly visible. In the event of any
modification made to the pre-printed texl of this document vvhich is not clearly visible, the text of the original BIMCO approved document shall apply BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies betvveen the original BIMCO approved document and this Computer generated document.

Introduction to Shipping t95

A p p e n d íx 8 Shellvoy 6

Issued Mơrch 2005 “ SHELLVOY 6”

P A R T III

This is additional lo any inđependent surveyo rs used for the Cargo Retention clause 48 in Part II o f this Charter. 122
123
U nited (9) (a) It is a condition o f ihis C hartcr thai Ovvners cn su re thai the vessel tully com plies with the ỉatesl Sullom Voe 124
K ingdom regulations, incluđing but nol limiteđ lo;- 125
126
(i) current m inim um bulk lo ading rales; and
127
(ii) pilot boarding ladder arrangem ents.
128
O wners shall also com ply with Charterers* instructions reg ard in a the disposal o f bailast from the vcssel. Chartercrs shall accept
129
any deadữeight claim thai m ay arise by co m p lyin g w ith such instructions. 130
(b) It is also a condition ot this C harter ihat Ovvners ensure ihat the vessel tully com plies vviih the laiesl Tranniere and 131
Shellhaven regulations, including bul not lim ited lo:- 132
(i) being able to ballasl concurrenlly w ilh d ischarge ; or 133
134
(ii) m aintainine double valve segregation at all tim es belNveen cargo and ballasl if ihe vessel has to part discharge,
135
stop to ballasl, then resum e discharge.
136
(c) In ihe event o f loading or disch arg e at T ranm cre, Shell U.K.. Ltd. shall appoint lugs, pilots and boatm en on b eh a lt'o f
137
O wners. The co-ordinator o f thesc services shall be O B C ., w ho will subm it all bills to O w ners direct. iưespeclive o f \vhelher 138
O BC are appoinled agents or not. O w ncrs w atran l ihey Nvill p u l OBC in tunds accordingly. ny

U nited (10)(a) II is a condilion o f this C harter that in acco rd an ce with U.S. Custom s Regulalions, 19 C FR 4.7a and 178.2 as 140
S tate o f am ended, Owners havc obiained a Standard C arrier A lp h a C ode (SC A C ) and shall include sam e in Ihe U nique Identitier 141
A m erica 142
w hich ihey shall enier, in the form set out in the above C u sto m s R egulations, on a)l the bills o f lading. Cargo m anifest. Cargo
143
declaralions and othcr cargo docum ents issucd under ihis C h artcr allovving carriagc o f goods to porls in the U.S.
144
Ovvners shall be liable for ail time, costs and expenses an d shall indem niíy C harterers against all consequences vvhatsoever
145
arising dircclly or inđircclly from Ovvncrs’ 1'ailurc lo co m p ly w ilh ihc abovc provisions o f Ihis clause.
146
()w ners vvarrant ihat they are aw are o f ihe requircm eiUs o f the u . s Bureau o t C ustom s and B order P roleclion ruling issued 147
on D cccm ber 5th 2003 undcr Pcderal R egister Part II D ep an m cn t o f Hom cland Security 19 C FR Parts 4. 103,ct al.and will 148
com ply 1'ully with these requircm enls for entering u . s ports. 149
C oaslguard (b) Ovvners w aưant Ihat during ihe term o í Ihis C h arter the vessei will com ply vvith ull appiicable U.S. Coast Guarcl 150
com pliance (U SCG ) R egulations in eíĩect as o f ihc datc ihe v esscl is icndcrcd tbr íirst loading hereundcr. ỉt' vvaivers are held to any USCG 151
152
regulation O w ners to advise C harlerers o ís u c h w aivers, incluđing period o f validation and reason(s) for \vaivcr. All lim e cosls
153
and cxpense as a rcsuit o f Ovvncrs' Tailurc lo com ply Nviih ihe foregoing shail bc for O w ners' account.
154
(c) O w ners w arrant that they w ill 155
(i) com ply wiih ihc U .S. Pederal W aler Polluỉion Conlro) A ct as am endcd. and any am endm enis or successors to 156
said Act 157
L aw s and (ii) coưiply wiih ail U.S. S laic Lavvsand rcg u laiio n sap p lica b lcd u rin g lh isC h arter, as they apply lo ih e U .S . States 158
regulation 159
ihat Charterers m ay ord er vesse! to u n d er Part 1 clauses (D /E) o t'th is Charter.
160
(iii) have secured. carry aboard the v essel. and keep currcnt any ccrtiíìcaies or o ther evidencc o i' lìnancial
!61
responsibilily rcquired lind cr applicab lc U .S. Peđcral or State Laws and regulations and docum entalion
162
recording com pliance w ith ihe requ iren ien ts o f O PA 90. any um endm ents or succceding legislation. and any 163
reguiations prom ulgated ihereu n der. Ovvncrs shall confim i that ihese docum ents w ill be valid throughout this 164
Charter. 165
W -8BF.N (d ) i f Ihe re c ip ic n l o f ih e f ie ia h l d u e u n d c r tl»is C h a r te r d o e s n o t íìle la x e s vvithin th e u s . th e n su c h r e c ip ie n t sh a ll 166

com plcte an IRS Form W-8Í3EN and tbrvvard the original by mail lo C hartcrers, atlcnlion “Kreight P aym cnts” . Should ihis not 167
168
be received in a tim ely maniier, then C h an e rers shall tiol bc liable tbr inleresl on late paym ent o ffre ig h t. 01 be in detaull o t lhis
169
C'hartcr for such latc paym enl.
ỉ 70
Vapt)ur Rccovery O w ners w aư ant that the vesseP s vapour recover> system com plies w ith the requirem ents o l'th e U nited States C oastguard. 17!
Sysiem
V ietnam (1 l ) l f requircd by Charlcrcrs. when lơadintỉ Bach H o crude oil. O w ncrs wil inslruct thc m astcr lo slan ihe cargo licaiing 172
system (s) príor to loading com m encing. 173

This docum ent is a Computer generated SHELLV0Y6 form prinled by authority o f BIMCO. Any insertion or deletion to the form must be clearly vísible. In the event of any
modiíication made to the pre-printed text of this document which is not clearly visible, the text of the origtnal BIMCO approved document shall apply. BIMCO assumes no
responsibility for any loss, damage or expense as a result of discrepancies between the original BIMCO approved document and this Computer generated document.

196 Institute of Chartered Shipbrokers

 A p p en d ix 9 Container Pixings

Typical Container Pixings

View "C"
Deck securing íitting provides gathering pÌLis
both horizonlal and vertical restraint

Typical use of corner íittings in shipload applicatio ns (in vertical Container cells and on d e c k )

Introduction to Shipping 197

A p p e n d íx 9 Container Pixings

198 Institute of Chartered Shipbrokers

 A p p en d ix 10 ContainerTypes

General Purpose Container 20740' Ventilated-Container 20'

Especially for cargo vvhich needs ventilation.

High Cube Insulated Container20740'

Especially for cargo which must be kept at a constant
General Purpose Container 40' temperature.Temperature control Via the ship's
Especially for light-vveight voluminous cargoes- retrígeraỉion plant, terminal refrigeration plant or a
“Clip-On” reừigeration unlt.

Hardtop Container 20740' Reeíer Container 20740'

Wlth removàble Steel roof. Especially for heavy or With integraỉed retrigeration unrt. Especially
excessively high cargo. For loading from above or for cargo which musỉ be kept at a constant
from the door wlth door header svvung out. temperature above or belovv freezing poínt.

Open Top Container High Cube Reíer Container 40'

With removable tarpaulin . Especially for Wúh integrated reíregeratíon unit.Especially for light
overhíght cargo.Loading either from top side weighỉ, voluminous cargo whích must be kept at a
or door síde from swung out header

Flat 20740' Bulk Container 20'

Especíally for heavy cargo and especially Especially for bulk cargo e.g. Mâlt.
wide cargo.

Plaưọrm 20740' Tank Container 20'

Especially for heavy loads and oversized cargo. Especíally for liquid Chemicals. Selected contaíners are
Non-domestic shipments. used exclusively for the transport of liquid food stuffs.

Introduction to Shipping 199

A p p en d ix 10 ContainerTypes

200 Institute of Chartered Shipbrokers

 A p p en d ix I I Congenbill 2007

CONGENBILL 2007
B IM C O BILL OF LADING
To be used with charter parties
Page I

Shipper Bill of Lading No. Reference No.

Consignee Vessel

Notify address P ortoí loading

Port otdischarge

Shipper’s description of goods Gross vveight

(of vvhich on deck at shipper's risk; the Carrier not

being responsible for loss or damage howsoever arising)

ò
u
Preight payable as per SHIPPED at the Port of Loading in apparent good order and condition on the Vessel for
I CHARTER PARTY dated; carriage to the Port of Discharge or so near thereto as the Vessel may sately get the
m goods specífied above.

PREIGHTADVANCE VVeight, measure, quality, quantity, condition, contents and value unknown.
Received on account of íreight; IN WITNESS whereof the Master or Agent of the said vessel has signed the number of Bills
of Lading indicated below ail of this tenor and date, any one of which being accomplished
the others shall be void-

FOR CONDITIONS 0 F CARRIAGE SEE OVERLEAP.

Date shipped on board Place and date of íssue Number of original

Bills of Lading

Signature;

..Master
Master's name and signature
Or

(ii) ..as Agent for the Master

Agents name and signature

Or
(iii) . ..as Agent for the Owner’
Agent's name and signature

. Ovvner
*if option (iii) filled in, S tate Owner’s name above

This document IS a Computer generated C O N G EN B IL L 2 0 07 form printed by authonty of B IM C O Any ìnsertion or deletion to the form musí be d early visible. In íhe event of any
modífìcation made to the pre-prin(ed text of this doo;m ent which is not cleatly visible. the text of the oríginal B IM C O approved document shall apply. B IM C O assumes no
responsibility for any loss, dam age o r expense as a result of điscrepancies betvveen the original B IM C O approved documenỉ and Ihis compuler generated documenl.

Introduction to Shipping 201

A p p en d ix I I Congenbill 2007

CONGENBILL 2007
BILL OF LADING
To be used with charter parties
Page 2

C onditions o f C arria g e

(1) All te rm s and conditions, liberties and exceptions o f the C ha rte r Party, dated as overleaí, including the Law and Arbitration
Clause/Dispute Resolution Clause, are herevvith incorporated.
(2) G eneral P aram ou nt C lause
The International Convention for the Unifcation of Certain Rules of Law relating to Bills of Lading signed at Brussels on 25 August
1924 (“the Hague Rules") as amended by the Protocol signed at Brussels on 23 Pebruary 1968 (“the Hague-Visby Rules”) and
as enacted in the country of shipment shall apply to this Contract. When the Hague-Visby Rules are not enacted in the country
of shipment, the corresponding legislation of the country of destination shall apply, irrespective of whether such legislation may only
regulate outbound shipments.

When there is no enactment of the Hague-Visby Rules in either the country of shipment or in the country of destination, the
Hague-Visby Rules shall apply to this Contract save where the Hague Rules as enacted in the country of shipment or if no such
enactment is in place, the Hague Rules as enacted in the country of destination apply compulsorily to this Contract.
The Protocol signed at Brussels on 21 December 1979 ("the SDR Protocol 1979") shall apply where the Hague-Visby Rules
apply, whether mandatorily or by this Contract.
The Carrier shall in no case be responsible for loss of or damage to cargo arising prior to loading, after discharging, or while
the cargo is in the charge of another carrier, or with respect to deck cargo and live animals.
(3) G e n e ra l A v e ra g e
General Average shall be adjusted, stated and settled according to York-Antwerp Rules 1994 in London unless another place
is agreed in the Charter Party.
Cargo's contribution to General Average shall be paid to the Carrier even when such average is the result of a faull, neglect or
error of the Master, Pilot or Crew.
(4) N ew J a s o n C la u s e
In the e ve n t o f accident, danger, dam age or disaster beíore or a fte r the com m en ce m e nt o f the voyage, resulting from a ny cause
vvhatsoever, vvhether due to negligence or not, for which, or for the consequence of which, the Carrier is not responsible, by statute,
contract or othervvỉse, the cargo, shippers, consignees or the ovvners of the cargo shall contribute with the Carríer ỉn General
Average to the payment of any sacrifices, losses or expenses of a General Average nature that may be made or incurred and
shall pay salvage and special charges incurred in respect of the cargo. If a salving vessel is ovvned or operated by the Carrier.
salvage shall be paid for as fully as if the said salving vessel or vessels belonged to strangers. Such deposit as the Carrier, or
his agents, may deem sufficient to cover the estimated contribution of the goods and any salvage and special charges thereon
shall, if required, be made by the cargo, shippers, consignees or owners of the goods to the Carrier beíore dellvery.
(5) B oth -to -B la m e C ollisíon C lause
lf th e V e s s e l com es into collision wíth a n o th e r vessel as a result o f the neg lig en ce of the o lh e r ves sel and a n y act, neg lect or
deíault of the Master, Mariner, Pilot or the servants of the Carrier in the navigation or in the management of the Vessel, the
owners of the cargo carried hereunder will indemniíy the Carrier against all loss or liability to the other or non-carrying vessei
or her o w ners in so far as such loss or liability rep rese nts loss of, or d a m a g e to, o r any claim vvhatsoever of the owners o f said
cargo, paỉd or payable by the other or non-carrying vessel or her owners to the owners of said cargo and set-off, recouped or
recovered by the other or non-carrying vessel or her owners as part of their claim against the carrying Vessel or the Carrier.
The foregoing provisions shall also apply where the ovvners, operators or tnose in charge of any vessel or vessels or obịects
oth e r than, or in addition to, the colliding vessels or objects are at fault in respect o f a collision o r contact.

For particulars of cargo, íreighl,

destination, etc., see over1eaf

202 Instltute of Chartered Shipbrokers

 A p pendix 12 CombinedTransport Bill o f Lading

C ode Nam e: “C O M B IC O N B ILL”

Shipper
Reíerence No.
N e g o t í a b Ie
C O M B IN ED T R A N S P O R T B ILL 0 F LADING

Revised 1995
Consigned to order of

Notify party/address

Place of receipt

Port of vessel Port of loading

Port of discharge Place of delivery Preight payable at Number of original Bills of Lading

Marks and Nos Quantity and description of goods Gross weight, kg, Measurement, m’

Particulars above declared by Shipper

Preight and charges RECEIVED the goods in apparent good order and
condition and, asfar as ascertained by reasonable means
of checking, as specified above unless othervvise stated.
The Carrier, in accordance with and to the extent of the
provisions contained in this Bill of Lading, and with liberty
to sub-contract, undertakes to pertorm and/or in his own
name to procure pertormance of the combined transport
and the delivery of the goođs, including all services related
thereto, from the place and time of taking the goods in
charge to the place and time of delivery and accepts
responsibility for such transport and such services.
One of the Bills of Lading must be surrendered duly
endorsed in exchange for the goods or delivery order.
IN VVITNESS whereof TWO (2) original Bills of Lading
have been signed, lf not othervvise stated above, one of
which being accomplished the other(s) to be void.
Shipper's declared value of Place and date of issue
Signed for
subject to payment of above extra charge,
..as Carrier
Note: by.
The Merchant’s attention is called to the fact that according
to Clauses 10 to 12 and Clause 24 of this Bill of Lading, the
liability of the Carrier is, in most cases, limited in respect of As agent(s) only to the Carrier
loss of or damage to the goods and delay.

Introduction to Shipping 203

A p p e n d ix 12 CombinedTransport Bill o f Lading

COMBINED TRANSPORT BILL 0 F LADING

Adopỉed by The Baltic and Intsrnational Maritim e Council in January, 1971 (as revised 1995}

C ode Name: "COMBICONBILL"

I. GEN ER A L PROVISIONS calculateđ by re íere n ce to íh e va lu e of such g oođs a t the place or e x p e n s e in c urred by th e C a rrie r. ịf such loss, d a m a g e or
1. A pplicabilíty. and tim e they are d e live red to th e M erch an t in acco rd an ce wilh e x p e n s e h as b e e n ca ú se d by:
Notvvithstanđing Ih e heading ■Combineđ T ran s p o ri', the th e coniract or shoulđ h a v e b e e n so đelivered. (a) negligent tillìng, packing or stovving o f the Container;
p rovisions set o ut an d reíerred to in this Bill of Lading shall (2) T h e valu e o f th e g o o d s shall be fixed accordíng to (b) the contents being unsuitable fo r carriage in Container; or
als o ap p ly, if th e transporl as d escribed in this Bill of Lading is th e com m odity ex ch a n g e p rice 0 f, if th ere be no such price, (c) th e unsuitability or đ eíec tiv e conđition of th e coniainer
p e río rm ed by o n e m ode of transporl only. according to Ih e c u rre n l mar1<et price or. if th ere b e no unless the Container has been supplíed by the Carríer and
2. D efìnitions. com m odity ex ch a n g e p n ce o r current m arttet price, by reíeren ce th e unsuitabilily or d eíec tiv e condilion w oulđ nol h av e been
•C a rrie r’ m e a n s the party on w h o se b eh a lí this Bill of Lađing to th e norm al value o f g o o d s o f th e sa m e kind and quality. ap p a ren t upon re as on a b le inspection a ỉ or prior lo th e time
h a s b ee n signed. (3 ) C o m p en satio n shall n o i however, ex ce eđ two Special when the Container was íilled, packeơ 0 f stoweđ.
'M e rc h a n t' includes th e Shipper. the R eceiver, the Dravving Rights p er k ilo g ram m e of gross weight of th e goods (2) T h e provisions o f su b -clau se (1 ) o f thís C la u s e also
C o n sig n o r, th e C o n sig n ee , the h olđer of ttiis Bill of Lađing and lost or d am ag ed ap p ly with resp ect to trailers, tran spo rtable tan ks. flats and
th e o w n e r of th e goođs. (4 ) H igher co m p en sation m a y be claim ed only w h e n, with pallets which h av e not been fìlled, p a c k e d or s lo w ed by the
3. C arrier’s Tariff. the consent of the C arrier. th e va lu e fof th e goods đ ec la ređ by Carrier.
T h e term s of th e C arrier's applicable Tariff at th e date the Shipper vvhich e x c e e d s th e limits laid down in thís C lau s e (3} T h e C arn e r d o es not accep t liabilíty for d a m a g e dưe to
of sh ipm en t a r e incorporated herein. C o p íes of the relevant has been stated on th e fa c e o f this Bill of Lading a t th e piace the unsuitabilìty or d eíec tiv e condítion o f re e íe r e q u ip m e n t or
p rovisions o f th e app licab le Tariff a re availab le from the C arrier inđicated. In that c a s e th e a m o u n l of the declared valu e shall be trailers supplied by th e M erch an l.
u pon requ est. In th e ca se of inconsistency betvveen Ih is Bill of subsiituted for Ih a l limit. 18. Dangeroús Goods.
L ad in g an d th e app licab le Tanff, this Bill of Lading shall prevail. 11. Special Provisions fo r Liabilíty and Com pensation (1 ) T h e M erc h an t shalt com ply with all internationally
4 . T im e B a r. (1 ) Notw ilhstanđing anything provideđ for in C lau s es 9 re cognised requ irem en ts and all rules vvhich ap p lỵ according
All liabílity w h a ts o ev er of ỉh e C arrier shall ce as e unless suit and 10 of this Bill of L ad ín g , if it can be proved vvhere the loss ỈO national law or by reason of international C on ven tio n , relating
IS b ro u g h i vvithin 9 months a tter d elivery o f th e goođs o r th e d ate or d am a g e occurređ, th e C a rríe r and the M erc h an t shall, as to to the carriag e of goods of a d an g e ro us natu re, an d shall in
w h e n th e g o o d s should h ave been delivered. Ihe liability of the Carrier, be entitled to require such liability to an y ev en t iníorm th e C a rn e r in writing o f th e e x a c í nature of
5 . L a w a n d J u ris d ic tio n . be determined by Ihe provisions contained in any International th e d an g e r b eío re g oods of a đ a n g e ro u s n atu re a re taken
D ìs p u íe s anstng unđer this Bill of Ladíng shall be determ ined convenlion or n ational law . w h ich provisỉons: into ch a rg e by th e C arrier and in d icàĩe to him, if n ee d be, the
by th e courts and in acco rd an ce w ith the law at the place vvhere (a) cannot be d e p a rle đ fro m by private contract, to the precautions to b e taken.
th e C arrier h as his princípal place of business. đetrim ent of th e claim an t, and (2 ) G oo d s o f a d an g ero us n atu re w hich th e C arrier did not
(b) would have applied íf th e M erc^ant had m a d e a separate know vvere dan g ero us, m ay, at an y lim e or p lace, b e unloaded,
II. PERPORM ANCE 0 F THE CONTRACT and direct contract with the C a rh e r in respect of the parlicular slage destroyed, or re nđ e red h arm less, w ith o u í com pensation;
6. M eỉh o d s and Routes o f Transportation. of iransporl w here th e loss or đ am a g e occurred and receiveđ as íu rther, th e M erc h an t shall b e liable for all ex p en s es , loss or
( 1 ) T h e C a rrie r is entitled to períorm th e transport an d all evídence thereoí an y particular document which must be issued if d am a g e arisíng out of th eir handing o ve r fo r carriag e or of their
s e rv ice s re lated th ere to in an y reason ab le m a n n e r and by any such International cónventíon o r national law shall apply. carriage.
re a s o n a b le m e a n s , m ethods and routes (2) lnsofar as there is no mandatory law applying lo carriage ( 3 ) lf an y g o o đs shtpped w ilh th e kn o w le d g e of th e C arrier
( 2 ) In a c co rd a n ce herevvith, for in stance, in the e v e n l of b y s e a by virtue of th e p rovisions of sub-clause 11 (1 ). the a s to th eir d a n g e ro u s n atu re shall b e c o m e a d a n g e r to an y
c a rría g e by s e a . vessels m a y sail w ith or vvíthout pilots, undergo liábility of th e C arríer in rẽsp ect o f any carriag e by sea shall be person or property, th ey m a y in lik e m a n n e r be la n de d ál
repairs, ad just equipm ent, dryđock and tow vessels in all determ ined by (he In tern a tion a l Brussels C o nvention 19 2 4 as a n y p la ce or d es tro y ed or ren d e red in n o cu o u s by th e C arrier
situations. am en d ed by the Protocol sig ne d at Brussels on Pebruary 23rđ vvithouí liability on th e part of th e C a rr ie r ex ce p t to G e n era l
7. O ptional Stowage. 19 68 - T h e H ag u eA /isb y R u ie s T h e H ag u eA /isb y R ules shall A ve rag e . if a ny.
( 1 ) G o o d s m a y be stowed by Ih e C arrier by m ean s of also đ eterm in e th e liabitity o f th e C arn e r in respect of carriag e 19. Return of Containers
co n taine rs , trailers, Iransportable lanks, flals. pallets, or similar by inland w a terw ays as if su ch carrìag e w e re ca rria g e by sea. (1} Fo r th e p urpose ỡf this C lau s e th e C o nsignor shall m ean
articles o f tran spo rt used to consolidate goods. Purtherm ore. they shall a p p ly to all gocxls, w h e th e r carried on the person w ho concludes this C ontract w ith the C arríer an d the
( 2 ) C o n ta in ers , ưailers, transportable tan ks and coveređ d eck o ru n d e r deck. C o n sig n ee shail m e an ịh e person en íitled to receive th e goods
flats, w h e th e r stovved by the C arrier or received by him in a 12. Oelay, Consequenỉial Loss, etc. froíTi th e Carrier.
stovved condition from th e M erch an t, m a y be carríed on or under lf th e C arrier is held liable in respect o f d elay, consequential (2 ) C o n tain ers. pallets o r similar a rticles o f tran spo rl supplied
d ec k vvithout n o tice to tha M erchant, loss or d am a g e o the r th a n loss of or d am a g e to th e goods, by or on b e h a lí o f Ih e C arrier shall b e returned to th e C arrier in
8. H indrances etc. Affectinfl Peilorm anca. th e liability of the C a rrie r sh all b e limrted to th e íreight for the Ih e s a m e order an d condition a s h anớ ed o ve r to th e M erch an t,
( 1 ) T h e C a rrie r shall use reason ab le e n d eavo urs tô com plete Iransporl co vered by this Bill of Ladíng, or to th e va lu e of the norm al w e a r an d tea r ex ce p te d , with interiors clean an d within
th e tran spo rt an d to deliver th e g oods a t th e p la ce designated g oods as d eíerm ine d in C la u s e 10, w hich ever is the lesser th e tim e p rescribed in th e C arrier's tariff 0 f elsevvhere
fo r đ elive ry 13. Notice of Loss o f or Damage to the Goods (3 ) (a ) T h e C o nsígnor shall be líable for an y loss of, d am a g e
( 2 ) lf at a n y tim e th e p eđ o rm a n ce of the contract as evidenced (1 ) Unless notice o f loss o f or d am a g e to th e goods. to. or d elay, includíng d em u rrag e. of such artid e s.
by thls BUI of L ađing is or vvill b e affected by an y hindrance, nsk, s p e c ify in g th e g e n e ra ! n a tu re o f s u c h lo s s o r d a m a g e , IS g ive n incurred during th e periođ b e íw e e n handing o ve r to the
d e la y , đifficuHy or d is ad va n la ge of w h a tso ever kind. and if by in writing by the M e rc h a n t to th e C arner w hen th e goods are C o nsignor and return to the C a rrie r fo r c a rn ag e
virtu e o f su b -c la u s e 6 (1 ) the C arn e r h as no duty to com plete handed o ver lo th e M e rc h an t, such handing o v e r is phm a (b ) T h e C o nsignor and the C o n s ig n e e shall b e jointly
th e p e rto rm a n ce o f the contract. the C arrier (vvhether or not the facie evid ence of th e O e liv ery by the C arrier of th e g oods as a n d s e v e ra lly lia b le fo r a n y lo s s o f. d a m a g e to . o r d e la ý ,
transport IS commencsd} may elect to: described in this Bill o f L ading. in d u d in g d em u rrag e, o f such artícles, incurred dunng
(a ) trea t th e p erio rm an c e of this C ontract a s lerm inated and (2) VVhere th6 loss or dam age IS not apparent. the same the period betvveen handing o v e r to th e C o n sig n ee and
p la ce th e g o o đs a t th e M erch an t's disposal at an y p!ace which pnm á tacie effecl shall ap p ly tf notice in vvriting is not given íe tu m to th e C arh e r
th e C a rn e r s h all d e e m safe and conveniení, 0 f within th ree (3 ) co n secu tive d a y s after th e d ay vvhen th e goods
(b ) d elive r th e goods at th e p lace d esíg n ateđ for dehvery. w e re handed óver to th e M erc h an t V. PREIGHT AND LIEN
( 3 ) lf th e g o o d s are not taken d elivery of by the M erchant 14. Deỉences and Lim its fo r the Carrìer, ServanU , «tc. 20 . P re lg h t.
w ithin a re a s o n a b le tim e after the C arríer h as called upon him (1 ) T h e d eten c es an d lim íts o f liabilìty provided for in this Bill (1 ) F reíght shall be d ee m ed e a rn ed w h e n th e g o o ds h ave
to ta k e delive ry, th e C arrier shall be a t libeny to put th e goods of Lading shall ap p ly in a n y action against th e C arrier for loss been la k e n in ch a rg e by th e C arrier an d shatl be paid in an y
in s a fe cu sto d y o n b eh a lí o f m e M erch an t at the letter s rìsk or d am a g e to the g ó o ds vvhether the action can b e tounđed in event
a n d e x p en s e. contract or in tort (2) The Merchant s attention IS drawn to the stipulations
( 4 ) In a n y e v e n t thft C arrier shall b e entitled to fuli íreight for (2) T h e C arrier shall not b e entitleđ to th e b en eíit o f the concem ing curren cy in vvhich th e íreight an d ch arg es a re to be
g o o đ s re ce ive d fo r transportation and additionai com pensation lim iOtion of líability p rovided íor in sub-clause 10 (3), if It IS paid. rate of ex ch a n g e, devaluatio n an d other co ntingencies
for ex tra co sts resulting from th e C ircum stances reíerred to proved th aỉ the loss ó r d a m a g e resulted from a p ersònal act or relative to íreig h t and ch a rg es in Ih e re te v a n i tariff conditions. If
above omission of the C arrier đ o n e with intent to ca u se such loss or no such stipulation as to devaluâtio n exists or ís ap p licab le the
d am a g e or recklessly an d w ith know ledge that d am a g e would following shall apply.
III. C A R R IER 'S LIABILITY If th e curren cy in w hich íre lg h i an d c h a rg es a re q u o te d is
probably result.
9. Basic Liabìlity. d ev alue d betvveen th e d a te of th e freíg h t a g re em en t and the
(3 ) T h e M erc h an t u n d e rla k e s thai no claim shall b e m a d e
( 1 ) T h e C a rrie r shall be ỉiable for loss of or d am a g e lo the
against a n y servant, a g e n t or o lh er persons w h o se services the d ate w h e n th e freight an d ch arg es a r e paid. th en all freight
g o o d s occurring betvveen th e tim e w hen he receives the goods and ch a rg es shall b e au to m atically a n d im n ie đ ia te ly -n creaseo
C arrier has used in o rd er to perloưn this C o n tract and if an y
into h i s ^ a r g e an d th e tim e of đelivery. in proportion to {he ex ten t o f the d ev alua tio n óf íh e said
claim should n ev erth eles s b e m a d e , to indem nify Ih e C arrier
( 2 ) T h o C a rrie r shall be responsible for th e acts and currency.
sgainst all co n s eq u en c es th ere o í.
o m ìs sio n s o f a n y person o f w h o $è services he m akes use for (3 ) Fo r Ih e p urpose of veriíying th e íre ig h t basis. th e C arrier
(4 ) H ow ever, ỉh e p rovisions of this BiH o í Lading appiy
th e p e rto rm a n ce o f the contract of carriag e eviđ enced by this re se rve s th e righl lo h av e th e co n ien ts o f c ontainers, ỉrailers 0f
w h e n e ve r d a im s relating to th e períorm ance o f this C ontract
Bill o f L ading, similar articles o f transport in spected in o rđ er to ascertain the
are m a de against a n y se rv an t. ag e n l or other person w h o se
( 3 ) T h e C arrier shal!, however, be relieved of liability ío r any w e ighl, m e as u rem e n l, value, or n ature o f th e goods.
services th e C arrier h as used in order lo pertorm this Contract,
loss o r d a m a g e lí such loss or d am a g e arose or resulỉéd from 21. Lien.
vvhether such claim s a r e ío u n d ed in contract or in lort. In
( a ) T h e vvrongíul act or neglect o f th e M erchant T h e C arrier shall h av e a líen on th e g o o ds for a n v am ount
entering into this C o n tract, th e Carrier, to th e extern of such
(b ) C o m p lia n c e with th e instructions of the person entitled d u e u n d er {his C ontract and fo r th e co sts o f reco ven n g the
provisions. does so n ot o nly on his ovvn b eh alf but a lso as a g e n t
to g iv e them , sam e. and m a y en ío rc e such lien in a n y re as o n a b le m ann er.
ór trustee for such perso n s. T h e agg reg ate liabílity of th e C arríer
(c ) T h e la ck o(. or deíectỉvG conditions of packing in th e case In d uding sa le or disposal of th e goods.
and such persons shall not e x c e e d the Hmits in C lau s es 10. 11
o f goods w hich. by their nature, are liable to vvastage or to be
and 24 , re sp ea iv ely .
d a m a g e d w h e n n ót packed or w h«n not properly packed. Vi. M ISCEI.LANEOUS PROVISIONS
(d ) H an d lin g , loađing, stovvage or unloađing of th e goods by IV, D ESCRIPTIONOP GO OD S 22. General Average.
o r on b e h a lí o f th e M erchant. 15. Carrier's Responsibility. (1 ) G e n e ra l A ve rag e shall b e adjusted a t an y port or place
( e ) In h eren t v ic e of th e goođs. T h e iníormation in Ih is Bill o f Lading shall b e prim a facie at ih é C a rr ie rs option, and to b e settle d accordíng to the
( 0 ln sufficien cy or in a de q iia cy of mart(s or num bers on the eviđ ence o f the taking in c h a rg e by the C arrier of th e goods Yor1t-Antwerp R u les 19 94 , or an y m odification th ere o í, this
g o ođs, co verin g, o r unit loads. covering all goods, vvhether carneđ on o r under đeck. T h e
as d escribed by such intorm ation unless a contrary indicstỉon.
(g ) S th k e s o r lock-outs or stoppages or restraints of labour such as 'shipp er's w e íg h t, lo ad and count'. 'S h ip p e r-p a ck ed Nevv Jaso n C la u s e a s ap p ro ved by B IM C O to be co n sid ered
from w ha te ver cause whether partial or general Container' or sim ilar expressions, have been made in the a s ìncorporated herem .
(h) Any cause or event wtiich íhe CatTier could not avoid and printed text or su p erim p o sed on the Bill of Lading. Proof to the (2 ) Such security in d uding a cash d e p o s ít as th e C a rrie r m ay
th e co n s e q u e n c e w tie reo f h e could not prevent by the exercise contrary shall not b e a d m iss ib le when the Bili o f Lading has d ee m sufficient to c o v er th e es tim ate d contribution o f fh e g oođs
o f r e a s o n a b le diligence. b ee n tfansferređ, or th e e q u iv alen t e le d ro n ic data in terchange an d an y sa lv ag e and speclal ch arg es Ih e re o n , shall, íf required,
( 4 ) W h 9 re u n đ e r s'Jb-cla’J se 9 ( 3 ' th e C a r i e r ís not unđer 'ĩie ỉs s g e hes t-e e i t'a rs n -.itttd to nnd acknx5w 'edjeci bv the b e subm itted to C a r i e r p r o r to d e lV e ry o f th e qoods.
a n y liabìiíty in re sp ec ì of so m e of th e factors causing th e loss or C onsrgnee who in g o o đ faith h as relied and acteđ thereon. 23. Both-to-Blam e Coỉlision Clause.
d a m a g e , h e sh all only be liable to the extern that those íactors 16. Shipper's Responsibility. T h e B o th -to -B lam e Collision C lau s e 3S ad o p teđ by B IM C O
fo r vvhich h e IS liabie unđer this C lau s e h ave conlributed to the T h e S h ip ^ r shall b e d e e m e d to h ave g u ara n te ed to th e shall b e consiđered incorporated herein
loss o r đ a m a g e . 24 U.S. Trade
C arrier the accuracy. a t th e t im e th e goods w e re taken in charge
( 5 ) T h e b ũ rd en of proving that the loss or d am a g e w a s due by íh e C arrier, o f th e đ escription of the goods, m arks, num ber,(1 ) tn c a s e th e contract ev id e n c ed by this Bill o f Lading
to o n e or m o re o f th e ca u se s o r events. specified in (a ), (b ) and is subject to th e C arriag e o f G o o d s by S e a A ct of th e United
quantity and vveight, a s íu rn is h ed by him, and th e Sh ip p er shall
(h ) o f s u b -c la u s e 9 (3 ) shali rest upon the ó arn e r. defend. indem nify a n d hold harm tess S tate s of A m erica, 1 9 3 6 (U .S . C O G S A ), then the provisions
C arrìer ag ain st all loss,
( 6 ) W h e n th e C arrier estabtishes thai in ịh e c ircum stances of stated in th e saíd A ct shall govern b e ío re loading an d after
d am a g e an d e x p en s es arísíng or resurting from inaccuracies in
th e c a s e , th e loss or d am a g e coulđ be attribuled to one or m ore disch arge an d throughout th e entire tim e th e goods a r e in the
or inadequacy of such p articulars. T h e right of th e C arrier to
of th e c a u s e s o r even ts. specified in (c) to ( 9 ) of sub-clause 9 C arrier’s custody.
such indem nity shall in no w a y limit hís responsibilíty an d liability
(3 ). it sh all b e p res u m eđ that It w a s so caused. T h e M erchant under thís Bill of Lading to a n y person other than th e S hipper (2 ) lf th e U -S C O G S A ap p lies , an d u n less th e n atu re
shall. h o w ev er, b e entitled to prove that th e loss o r d am a g e w as an d v a lu e o f íh e g o o ds h a v e b ee n d e c la re d by th e sh ip p e r
T h e Shipper shall re m ain liable even íf th e Bill o f Ladíng has
n o t. in fa c t. c a u s e d e ith e r w h o lly o r p a rtly b y One o r m o re o f the been transíerred by him, b e ío re th e g o o d s h a v e b e e n h a n d e d o v e r to th e C a rr ie r and
c a u s e s or even ts. 17. Shipper-packed C ontaìners, etc. ín s erted in thís Bíll o f L ad in g . th e C a rr ie r sh all in n o e v e n t be
10. A m o u n t o f Compensation (1 ) lf a C ontainer h as n ot b e e n filled, p a c k e d o r stovved by o r b e c o m e lia b le fo r a n y loss o f or d a m a g e to th e g o o đ s in
(1) W h e n th e C arrier is liable for com pensation in respect of th e C a rrie r, th e C a rn e r sh a ll n o t be hable fo r a n y loss o f or an a m o u n t e x c e e d in g U S D 5 0 0 p e r p a c k a g e or cu s to m a ry
loss o f or d a m a g e to th e goods. such com pensation shall be d a m a g e to its c o n te n ts a n d th e M erc h an t sh all co v e r a n y loss ỉre ig h t unit

204 Institute of Chartered Shipbrokers

 A p p en d ix 13 Liner Booking N ote

Shipper (if known at time of booking) BIMCO BUVNK BACK FORM

OF LINER BOOKING NOTE
Place and date

Consignee (if known at time of booking) Name of Merchant effecting the booking

Name of Carrier

Notify address at place of delivery Merchant’s representatives at loading port

Time for shipment (about)

Place of receipt by pre-carrier* It is hereby agreed that this Contract shall be pertormed
subject to the teims contained in this Booking Note and
in the Carrier's Standard Conditions of Carriage, which
Vessel Port of loading** shall prevail over any previous arrangements and which
shall in turn be superseded (except as to deadvveight and
Port of discharge Place of delivery by on-carrier' demurrage) by the terms of the Bill of Lading. Copies
of Carrier's Standard Conditions of Carriage, if any, can be
obtained upon request from the Carrier or his agents.
Marks and Nos. Description of goods Gross weight Measurement
(if available) (if available) (if available)

Preight details, charges, etc. Special lerms, if agreed

Daily demurrage rate (if agreed) Preight (State prepayable or payable at Signature (Merchant)
destination)

Number of original Bs/L required Signature (Carrier)

'Applicable only when Through Trans-

port íoreseen
**{or so near thereunto as the vessel
may safely get and lie always afloat)

Introduction to Shipping 205

A p p e n d ix 13 Liner Booking N ote

206 Institute of Chartered Shipbrokers

 A p pendix 14 SeaVVaybill

Conslgnee (not to order)

Notify address

Pre-carríage by* Place of receỉpt by pre-carrier*

Vessel Port of loading

Port of discharge Place of deíivery by on-carrier*

and Nos. Number and kind of packages: descríption of goods Gross vveight Measurement

Particulars turnished by the Merchant

Preight detâils, charges etc.
RECEIVED (or carríage the goods as speciĩied above according to Shipper’s declaration in ap*
parent good order and condỉtlon • unless otherwise staled herein - weight, measure, marks,
numbers, quality, contents and value unknown.
The goods shipped under this Liner VVaybill will be delivered to the Party named as
Consignee or Its authorísed agent, on production of proot of identity wlthout any documentary
formalíties. Carríer to excercíse due care ensuring that delivery is made to the proper party.
However, In case of Incorrect delivery, no responsibilỉty will be accepted unless due to fault
or neglect on the part of the Carrier.
This Liner VVaybill which is not s document of tỉtle to the goods is deemed to be a contract
of carríage which is subject to the exceptions, limítations, conditions and liberties
{íncluding ỉhose retating to pre-carriage and on-carriage) set out In the Carrier's Standard
Condítions of Carriage applícable to the voyage covered by thìs Liner VVaybill and
operative on Its data of issue. If the Carrier does not have Standard Conditions of Carriage,
this Liner VVaybill is subject to the exceptions, limitations, conditíons and líberties as set
out on Page 1 of ỉhe “ConlinebiM” Liner Bill of Lading operatíve on its date of issue.
The “ConlinebiM” Liner Bill of Lading and the Carrier’s Standard Conditions of Carriage
incorporate or are deemed to íncorporate the Hague Rules contained in the Brussels
Convention dated 25th August 1924 and any compulsoríly applicable national enactment of
eitíìerthe Hague RuỊes as such or as amended by the Hague-Visby Rules contained in the
Brussels Protocol dated 23rd Pebruary 1968.
A copy of the Canier’s Standard Conditions of Carríage applicable hereto may be inspected
or will be supplied on request at the offìce of the Carrier or the Carrier's Principal agents.
Every reterence in the Carríer's Standard Conditions of Carrìage or in the “ConlinebíH”
Líner Bill of Lading to the words “Biil of Ladíng” shall be read and construed as a
reference to the words “Non-Negotiable LinerVVaybíir’ and the terms and conditíons
thereoí shall be read and construed accordingly.

Daily demurrage rate (if agreed) Preight payable at Place and date of issue

Signature

* Applicable onfy when document used as a Through

Introduction to Shipping 207

A p p e n d ix 14 SeaVVaybill

208 Institute of Chartered Shipbrokers

 A p p e n d ix 15 SHIPMAN 2009

Explanatory N oỉds for SH IPM AN 2009 are availab ie fro m 6 IM C 0 a ỉ vAvw.bim co.org

R T M rO V - /
SHIPMAN 2009
STANDARD SH IP M ANAGEM ENT AGR EEM ENT

P A R T I

1. Place and date of Agreement 2. Date of commencement of Agreement(Cls. 2. 12. 21 and 25)

3 Ovvners (nam e, place o f registered office and la w o f registry) (Cl. 1) 4 M anagers (n a m e, place o f re g istere d office and la w o f regisừ y) (Cl. 1)

(i) Name: (i) Name:

(ii) Place of regisỉered office; (ii) Place of registered office:

(iii) Law of registry. (iii) Law of registry:

5. The Company (with referenc0 to the ISM/ISPS Codes) (State name and IMO 6. Technical Management (State “yes" or ‘ no' as agreed) (Cl. 4)
Unique Company Identitication number. If the Company is a third party then also
State registered office and príncipal place of business) (Cls. 1 and 9(c)(i))

(í) Name:
7. Crew Management (S tate “yes" or “no" as agreed) (Cl. 5(a))

(ii) IMO Unique Company Identitication number:

(iii) Place of registered office:

8. Commercial Management (State > 6 8 ' or “no" as agreed) (Cl. 6)

(iv) Principal place of business:

9. Chartering Services period (only to be tilled in íf ‘yỡs" stated in Box 8) 10 Crew Insurance arrangements (S ta te y e s " or "no’ as agreed)
(Cl-6(a)) (i) Crevv Insurances* (Cl, 5(b)):
(íí) Insurance for persons proceeding to sea onboard (Cl. 5(b)(í)):
‘only to apply if Crew Management (Cl. 5(a)) agreed (see Box 7)

11. Insurance arrangements (State “yes" or “no" as agreed) (Cl. 7) 12. Optional insurances (S tate optional insurance(s) as agreed, such as
piracy. kidnap and ransom, loss of hire and FD & D) (Cl. 10(a)(iv))

13. Interest (State rate of interest to apply atler due date to outstanding sums) 14 . A n n u a l m a n a g e m e n t fe e (State a n n u a l a m o u n t) (C l. 1 2 (a ))
(Cl. 9 (a )i

15. M a n a g e r's n o m in ated a cco u n t (C I.1 2 (a )) 16. Daily rate (State rate for days in excess of those agreed in budget) (Cl. 12(c))

17. Lay-up p eriođ / n u m b e r of m on th s (C l.12 (d ))

18. M inim um conừact period (State num ber o f m onths) (Cl. 21(a)) 19. Managem ent fee on termination (State number of months to apply)(CI. 22(g))

20. S everance C osts (State m axim um am ount) (Cl. 22(h)(ii)) 2 1. Díspute R esolutíon (S tate alternative Cl. 23(a). 23(b) or 23(c); ifC I. 23(c)
p la c e of a rb iừ aỉio n m u s t b e s ta te d ) (C l. 2 3 )

Introduction to Shipping 209

A p p e n d íx 15 SHIPMAN 2009

SHIPMAN 2009
Standard ship management agreement PARTI

(con b n ued)

22. Notices (S ta te ftjll styỉe contact details fòr servlng nobce and communicatìon 23 Notices (S ta te full style contacỉ detaíls for serving notíce and communicatíon
to theOwners)íCI. 24i

It is m u tu a lly agreed betw een ữie party stated in Box 3 and th e party stateđ in Box 4 th a t this A g re e m e n t c o n s is tn g o f PART 1and PART 1!
a s w e tl as A n nexes "A " (D etails o f Vessel or V essels), "B ” (D etails o f C rew ). "C ” (B uđg et), "D" (A ss o c ia te d Vessels) and ” E ’ (F e e S ch e d u le )
a tta c h e d l^ r e to , shall be períorm ed s u b je c tto th e conđítions c o n ta in e d herein. In th e eve n t o f a c o n flic to f conditions, th e provisions o f PART
1 and A n n e x e s “A", "B". "C” , "D" and "E" shall prevatl o ver those o f PA R TII to th e e xte n t o f such c o n ílict b u t no turther

Signature(s) (Owners) Signature(s) (Managers)

210 Institute of Chartered Shipbrokers

 A p p en d ix 15 SHIPMAN 2009

P A R TII
SHIPM AN 2009
Standard ship management agreement
SECTION 1 -B a sis of theAgreement

1. Dermitions 1
In this Agreement save vvhere the context othervvise requíres, the following vvords and expressions shall have 2
the meanings hereby assigned to them: 3

“Company" (with reĩerence to the ISM Code and the ISPS Code) means the organization identitied in Box 5 4
or any replaoement organization appointed by the CM/ners from time to time (see Sub-clauses 9(b)(ị) or 9(c) 5
(ii), whichever is applicable). 6

“Crew” means the personnel of the numbers, rank and nationality speciíied in Annex "B” hereto. 7

"Crew Insurances" means Insurance of liabilities in respect of crew risks which shall includebut not be limited 8
to death, permanent disability, sickness, injury, repatriation, shipvvreck unemployment indemnity and loss 9
of personál effects (see Sub-clause 5(b) (Créw Insurances) and Clause 7 (Insurance Arrangements) and 10
C la u s e 1 0 (In s u ra n c e P o lic ie s ) a n d Boxes 10 and 11). 11

“Crew Support Costs” means all expenses of a general nature which are not particularly referable to any 12
individual vessel forthe ti me belng managed by the Managers and which are incurred by the Managers for the 13
purpose of providlng an efficient and economic management Service and, vvithout prejudice to the generality 14
of the íoregoing, shall include the cost of crew standby pay, training schemes for officers and ratings, oadet 15
training schemes, sick pay, study pay, recruitment and ínterviews. 16

"Flag State” means the State whose flag the Vessel is ílying. 17

“ISM Code" means the International Management Code for the Safe Operatlon of Shíps andfor Pollution 18
Prevention and any amendment thereto or substitution therefor 19

“ISPS Code" means the International Code for the Securlty of Ships and Port Paciiities and the relevant 20
amendments to Chapter XI of SOLAS and any amendment thereto or substitutlon thereíor 21

“Managers" means the party identiíied in Box 4. 22

“Management Services” means the services speciíied in SECTION 2 - Services (Clauses 4 through 7) as 23
ỉn d ic a te d a ffirm a tiv e ly In Boxes 6 th ro u g h 8 , 1 0 a n d 11, a n d all o th e r íu n c tio n s p e río rm e d b y th e M a n a g e rs 24
under the terms of this Agreement. 25

“ O w n e rs " m e a n s th e p a rty id e n tiíie d In B o x 3. 26

“Severance Costs" means the costs which are legally required to be paíd to the Crew as a result of theearly 27
te r m in a tio n o f a n y c o n tra o ts fo r S e rvice o n th e V e s s e L 28

"SMS" means the Satety Management System (as defined by the ISM Code). 29

"STCW 95” means the International Convention on Standards of Training, Certiíioatíon and VVatchkeeping 30
for Seaíarers, 1978, as amended in 1995 and any amendment thereto or substitution thereíor. 31

“Vessel" means the vessel or vessels details of vvhich are set out in Annex "A” attached hereto. 32

2. Commencement and Appointment 33

With effect from the date stated in Box 2 for the commencement of the Management Services and continuing 34
unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers 35
hereby agree to act as the Managers of the Vessel in respect of the Management Services. 36

3. Authority of the Managers 37

Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall 38
carry out the Management Services in respect of the Vessel as agents for and on behalí of the Owners. The 39
Managers shall have authority to take such actions asthey may from time to time intheir absolute discretíon 40
conslder to be necessary to enable them to pertorm the Management Services in accordance withsound 41
ship management practice, including but not limited to complỉance with all relevant rules and regulations. 42

Introduction to Shipping 21 I
A p p e n d ix 15 SHIPMAN 2009

P A R TII
SHIPMAN 2009
Standard ship management agreement
SECTION 2 - Services

4. Technical Management 43
(only applicable if agreed according to Box 6) 44
The Managers shall provide technlcal management which inoludes, but is not limited to, the followlng 45
services: 46

(a) ensuring that the Vessel camplies with the requirements of the íaw of the Flag State; 47

(b) ensuring compliance wlth the ISM Code; 48

(c) ensuring compliance with the ISPS Code; 49

(d) providing competent personnel to supervise the maintenance and general efficiency of the Vessel; 50

(e) arranging and supervísing dry dockings, repairs, alterations and the maintenance of the Vessel to the 51
standards agreed with the Owners provided that the Managers shall be entitled to incur the necessary 52
expendlture to ensure that the Vessel will comply with all requirements and recommendations of the 53
classificatíon society, and with the law of the Flag State and of the places where the Vessel is requíred to 54
trade; 55

(f) arranging the supply of necessary stores, spares and lubricating oil; 56

(g) appointing surveyors and technical consultants as the Managers mayconsíder from time totime to be 57
necessary; 58

(h) in accordance with the Ovvners’ instructions, supervislng the sale and physical delivery of the Vessel 59
under ữie sale agreement. However servioes under this Sub-clause 4(h) shall not include negotíation of the 60
sale agreement or transíer of ownership of the Vessel; 61

(i) arranglng for the supply of provisions unless provlded by the Owners, and 62

(j) arranging for the sampling and testing of bunkers, 63

s. Crew Management and Crevvlnsurances 64

(a) Crew Management 65
(only applicable if agreed according to Box 7) 66
The Managers shall provide suitably qualiíied Crew who shall comply with the requirements of STCW 95. 67
The provision of such orew management servlces includes, but is not limỉted to, the following services: 68

(i) selecting, engaging and províding for the administratlon of the Crew, including, as applicable, payroll 69
arrangements, pensionarrangements, tax, social security contributions and other mandatory dues related 70
to theír employment payable in each Crew member’s country of domicile; 71

(ii) ensuring that the applicable requirements of the law of the Flag State in respect of rank, qualiíication 72
and certlíicatíon of the Crew and employment regulations, such as Crew’s tax and social Insurance, are 73
satisíied; 74

(iil) ensuring that all Crew have passed a medical examination with a qualiíied doctor certiíyíng that they are 75
fit for the duties for which they are engaged and are in possessíon of valid medioal oertiílcates Issued in 76
accordance with appropriate Flag State requirements or such higher Standard of medical examiriation 77
as may be agreed with the OArners. In the absence of applicable Flag State requirements the medical 78
certiticate shall be valid at the time when the respective Crew member arrives on board the Vessel and 79
shall be maíntained for the duration of the Service on board the Vessel; 80

(iv) ensuring that the Crew shall have a common vvorking language anda commandoí theEnglish language 81
o f a s u ff:c ie n t S ta n d a rd to e n a b le th e m to p e rfo rrn th e ir d u tie s s a fe ly ; 32

(v) arranging transportatíon of the Crew, Including repatrlation; 83

(vi) training of the Crew; 84

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(vii) conductíng Union negotiations; and 85

(viii) íf the Managers are the Comp>any, ensuring that the Crew, on joiníng the Vessel, are gíven proper 86
íamiliarisation with their duties in relation to the Vessers SM S and that instructions which are essential 87
to the SM S are identííied, documented and given to the Crew prior to sailing. 88

(ix) if the Managers are notthe Company: 89

(1) ensuring that the Crew, beíore jolning the Vessel, are given proper tamiliarisation with theír duties 90
in relatíon to the ISM Code; and 91

(2) instructing the Crew to obey all reasonable orders of the Company in connection with the operation 92
ò íth e S M S. 93

(x) VVhere Managers are not providing technical management services in accordance with Clause 4 94
(Technícal Management); 95

(1) ensuring that no person connected to the provision and the períormance of the crew management 96
services shall proceed to sea on board the Vessel vvithout the prior consent of the Ovvners (such consent 97
not to be unreasonably vvithheld); and 98

(2) ensuring that in the event that the Ovvners' drug and alcohol policy requires measures to be taken 99
príor to the Crew joining the Vessel, implementing such measures; 100

(b) Crew Insurances 101

tonlv aPDlicable if Sub-clause 5(a) apolies a n d if agreed according to B o x 10) 102
The Managers shall throughout the period of this Agreement provide the following services: 103

(i) arranging Crew Insurances in accordance with the best practíce of prudent managers of vessels of a 104
slmílar type to the Vessel, with sound and reputable insurancs companies, underwriters or associatìons. 105
Insurances for any other persons proceeding to sea onboard the Vessel may be separately agreed by 106
the Owners and the Manágers (see B ox 10); 107

(ii) ensurlng that the Owners are aware of the terms, conditions, exceptions and límits of liability of the 108
insurances in Sub-clause 5(b)(i); 109

(ili) ensuring that all premiums or calls in respect of the insurances in Sub-clause 5(b)(i) are paid by their 110
duedate; 111

(iv) if obtaínable at no additional cost, ensuring that insurances in Sub-clause 5(b)(i) name the Owners as 112
ajointassured withfull coverand, unless otherwise agreed, on terms such that Owners shall be under 113
no liability in respect of premiums or calls arising in connection with such insurances. 114

(v) providing vvritten evidence, to the reasonable satisfaction of the OAíners, of the Managers’ oompliance with 115
their obligations under Sub-clauses 5(b)(ỉi), and 5(b)(iii) withín a reasonable time of the oommencement 116
of this Agreement, and of each renevval date and, if specifically requested, of each payment date of the 117
insurances in Sub-clause 5(b)(i). 118

6. Cotnmercial Management 119

(only applicable if agreed according to B o x 8) 120
The Managersshall providethefollowingservicesfortheVessel inaccordancewiththeOwners'instructions, 121
which shall include but not be limited to: 122

(a) seeking and negotỉating employment for the Vessel and the conclusion (including the execution thereoí) 123
of charter parties or other contracts relating to the employment of the Vessel. If such a contract exceeds the 124
period stated in B o x 9, consent thereto in wríting shall first be obtained from the Owners; 125

(b) arranging for the provision of bunker fuels of the quality specitied by the Owners as required for the 126
véssel's trade; 127

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(c) voyage estimating and accountỉng and oalculation of hire, írelghts, demurrage and/ordespatch monies 128
due from or due to the charterers of the Vessel; assisting in the collection of any sums due to the Owners 129
related to the commeroial operatlon of the Vessel in accordance wlth Clause 11 (Income Collected and 130
Expenses Paid on Behalt of Ovvners); 131

lfany of the services under Sub-clauses 6(a). 6(b) and 6(c) are lo be excluded from the Management Fee, remuneration 132
for these serv/ces must be stated in Annex E (Fee Schedule). See Sub-clause 12(e). 133

(d) issuing voyage instructions; 134

(e) appointing agents; 135

(f) appointing stevedores; and 136

(g) arrangíng surveys assoclated with the oommercial operation of the Vessel. 137

7. Insurance Arrangements 138

(only applicable if agreed according to B o x 11) 139
The Managers shall arrange insuranoes in accordance with Clause 10 (Insurance Polioies), on such terms as 140
the Ovvners shall have instructed or agreed, in partlcular regarding conditions, insured values, deductibles, 141
ừanchises and limits of líability. 142

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SECTION 3 - Obligations

8. Managers’ Obligations 143

(a) The Managers undertake to use their best endeavours to provide the Management Services as agents 144
for and on behalf of the Ovvners in accordance with sound ship management practice and to protect and 145
promote the interests of the Owners in all matters relating to the provision of servlces hereunder. 146

Provided however, that in the pertormance of their management responsibilities under this Agreement, the 147
Managers shalt beentitledto have regard to their overall responsibllity in relation to all vessels as may from 148
time to time be entrusted to their management and in particular, but vvlthout prejudice to the generality of 149
the toregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such 150
manner as in the prevailing circumstancesthe Managers in theirabsolutediscretion considerto betairand 151
reasonable 152

(b) VVhere the Managers are providing technical management services in accordance with Clause 4 (Technical 153
Management), they shall procure that the requirements of the Flag State are satísíied and they shall agree 154
to be appointed as the Company, assuming the responsibility for the operation of the Vessel and taking over 155
the duties and responsìbilities imposed by the ISM Code and the iS P S Code, if applicable. 156

9. Ovvners’ Obligations 157

(a) The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this 158
Agreement. In the event of payment after the due date of any outstanding sums the Manager shall be entitled 159
to charge interest at the rate stated in B ox 13.
160
(b) WheretheManagersareprovidingtechnicalmanagementservicesinaccordancewithClause4(Technical 161
Management), the Owners shall:
162
(i) report (or where the Owners are not the registered ovvners of the Vessel procure that the registered 163
owners report) to the Flag State administration the details of the Managers as the Company as required 164
to comply with the ISM and IS P S Codes; 165

(ii) procure that any officers and ratings supplied by them or on their behalf comply with the requlrements 166
0 fS T C W 9 5 ;a n d 167

(iíi) instruct such officers and ratings to obey all reasonable ordersoí the Managers (in their capacity asthe 168
Company) in connection with the operation of the Managers' saíety management system. 169

(c) VVhere the Managers are not providlng technical management services in accordance with Clause 4 170
(Technlcal Management), the Ovners shall; 171

(i) procure that the requirements of the Flag State are satisíied and notity the Managers upon execution of 172
this Agreement of the name and contact details of the organization that will be the Company by completíng 173
BoxS^^ 174

(li) lf the Company changes at any time during this Agreement, notify the Managers in a timely manner of 175
the name and contact details of the new organization; 176

(íii) procure that the details of the Company, including any change thereoí, are reported to the Flag State 177
adminístration as required to comply with the ISM and IS P S Codes. The Ovvners shall advise the Managers 178
in a timely manner when the Flag State administratíon has approved the Company; and 179

(iv) unless othervvise agreed, arrange for the supply of provisions at their own expense. 180

(d) VVhere the Managers are províding crew management services ín accordance with Sub-clause 5(a) the 181
Òwnersshall: 182

(i) intorm the Managers prior to ordering the Vessel to any excluded or additional premium area under 183
any of the Ovvners’ Insurances by reason of war risks and/or piracy or like perils and pay whatever 184
additional costs may properly be incurred by the Managers as a consequence of such orders including, 185
if necessary, the costs of replacing any member of the Crew. Any delays resulting from negotiation 186
with or replacement of any member of the Crew as a result of the Vessel being ordered to such an area 187

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shall be for the Owners’ account Should the Vessel be within an area which becomes an excluded or 188
additional premlum area the above provisions relating to cost and delay shall apply; 189

(ii) agree with the Managers prior to any change of flag of the Vessel and pay vvhatever additional costs 190
may properly be incurred by the Managers as a consequence of such change. If agreement cannot be 191
reached then either party may terminate this Agreement in accordance with Sub-clause 22{e); and 192

(iii) provide, at no cost to the Managers, in accordance wíth the requirements of the law of the Flag State, 193
or hígher Standard, as mutually agreed, adequate Crew accommodation and living standards. 194

(e) VVhere the Managers are not the Company, the Owners shall ensure that Crew are properly íamiíiarised 195
with their duties in accordance with the Vessers SM S and that instructions which are essential to the SM S 196
are ídentiíied, documented and given to the Crew prior to sailing. 197

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SECTION 4 - Insurance, Budgets, Income, Expenses and Fees

10. Insurance Policies 198

The Owners shall prooure, vvhether by instructing the Managers under Clause 7 (Insurance Arrangements) 199
or otherwise, that throughout the period of this Agreement: 200

(a) at the Owners' expense, the Vessel is insured for not less than its sound market value or entered for its 201
fuíl gross tonnage, as the case may be for: 202

(I) hull and machinery marine risks (including but not limited to crew negligence) and excess liabilitles, 203

(ii) protectlon and Indemnity risks (including but not limited to pollution risks, dìversion expenses and, 204
except to the extent insured separately by the Managers in accordance with Sub-clause 5(b)(i), Crew 205
Insurances; 206

NO TE: l f the M anagers are n o t providing crew m anagem ent services under Sub-clause 5(a) (Crew 207
Management) or have agreed not to provide Crew Insurances separateịy in accordance wlth Sub-clause 208
5(b)(i). th e n su ch in su ra n ce sm u stb e in clu d e d in th e p ro te c tio n a n d in d e m n ityn sk sc o v e río rth e Vessel(see 209
Sub-clause 10(a)(n) atx>ve)^ 210

(iii) w a r risks (including but not lim ited to blockíng a n d trapping, proteotion a n d indemnity, terrorism a nd c re w 211
risks); and 212

(iv) such optional Insurances as may be agreed (such as piracy, kidnap and ransom, loss of hire and FD & 213
D) (see B ox 12) 214

Sub-clauses 10(a)(i) through 10(a)(iv) all ín accordance with the best practice of prudent owners of vessels 215
of a similartype to the Vessel, withsound and reputable Insurance companles, underwriters or associations 216
("the Ovvneré Insurances”); 217

(b) all premiums and calls on the Ovvners' Insurances are paid by their due date; 218

(c) the Ovvners’ Insurances name the Managers and, subject to underwriters' agreement, any third party 219
designated by the Managers as a joint assured, with full cover, It ís understood that in some cases, such as 220
protection and indemnity, the normal terms for such oover may impose on the Managers and any such third 221
party a llabillty ín respect of premiums or calls arising in connection with the Ovvners’ Insurances. 222

lf obtainable at no additlonai cost, hovvever, the Owners shall procure such ínsurances on terms such that 223
neíther the Managers nor any such thlrd party shall be under any liability in respect of premiums or calls arising 224
In connection with the Owners’ Insurances. In any event, on termination of thís Agreement in accordance 225
with Clause 21 (Duratlon of the Agreement) and Clause 22 (Termination), the Ovners shall procure that the 226
Managers and any third party designated by the Managers as joint assured shall cease to be joint assured 227
and, if reasonably achievable, that they shall be released from any and all liability for premiums and calls 228
that may arise in relation to the period of this Agreement; and 229

(d) written evidence IS provided, to the reasonable satisíaction of the Managers, of the Owners'compliance 230
with their obligations under this Clause 10 vvithin a reasonable time of the commencement of the Agreement, 231
and of each renevval date and, if speciíically requested, of each payment date of the Ovvners’ Insurances. 232

11. Incom e Collected and Expenses Paid on Behalf of Owners 233

(a) Except as provided in Sub-clause 11(c) all monies collected by the Managers under the terms of this 234
Agreement (other than monies payable by the Ovvners to the Managers) and any interest thereon shall be 235
held to the credit of the Owners in a separate bank account. 236

(b) All expenses Incurred by the Managers under the terms of this Agreement on behalí of the Owners 237
(including expenses as provided in Clause 12(c)) may bedebltedagainsttheC)wnersintheaccountreferredto 238
under Sub-clause 11 (a) but shall In any event remain payable by the Owners to the Managers on demand. 239

(c) All monies collected by the Managers under Clause 6 (Commercial Management) shall be paid into a 240
bank acc»unt In the name of the Owners or as may be otherwise advised by the Owners in vvriting. 241

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12. Management Fee and Expenses 242
(a) TheOwnersshall pay tothe Managersanannual m anagementíeeasstatedin Box14forthelrservlces 243
as Managers underthisAgreement, which shall be payable in equal monthly instalments in advanoe, theíirst 244
instalment (pro rata if appropriate) being payable on the commencement of this Agreement (see Clause 2 245
(Commencement and Appointment) and Box 2) and subsequent instalments being payable at the beginning 246
of every calendar month. The management fee shall be payable to the Managers' nominated account stated 247
in Box 15. 248

(b) The management fee shall be subject to an annual review and the proposed fee shall be presented in 249
the annual budget in accordance with Sub-clause 13(a). 250

(c) The Managersshall, at no extra cost to the Ovvners, providetheirownofficeaccommodation, officestaff, 251
facillties and stationery. VVithout limiting the generality of this Clause 12 (Management Fee and Expenses) the 252
Ovvners shall reimburse the Managers for postage and oommunication expenses, travelling expenses, and 253
other out of pocket expenses properly incurred by the Managers in pursuance of the Management Services. 254
Any days used by the Managers' personnel travelling to or from or attending on the Vessel or otherwlse used 255
In connection with the Management Services in excess of those agreed in the budget shall be charged at 256
the daily rate stated in Box 16. 257

(d) lf the Owners deoide to layup the Vessel and such layup íasts for more than the number of months 258
stated in B ox 17, an appropriate reduction of the Management Fee for the period exceedlng such period 259
untll One month beíore the Vessel is again put into Service shall be mutually agreed between the parties. If 260
the Managers are providing crew management servlces in accordance with Sub-clause 5(a), consequential 261
costs of reduction and relnstatement of the Crew shall be for the OA/ners' account. If agreement cannot be 262
reached then either party may terminate this Agreement in accordance wíth Sub-clause 22(e), 263

(6) Saveasothervvlse provided inthisAgreement, alldiscountsandcommissionsobtainedbythe Managers 264

in the course of the períormance of the Management Services shall be credited to the Ovvners. 265

13. Budgets and Management of Funds 266

(a) The Managers’ initial budget is set out in Annex “C ” hereto. Subsequent bu dgets shall be for twelve 267
month perlods and shall be prepared by the Managers and presented to the Ovners not less than three 268
months before the end of the budget yeár, 269

(b) The Owners shall State to the Managers in a tímely manner, but in any event within one month of 270
presentation, whether or not they agree to each proposed annual buđget. The parties shall negotiate ìn good 271
falth and if they fail to agree on the annual budget, including the management fee, either party may terminate 272
this Agreement in accordance with Sub-clause 22(e). 273

(c) Following the agreement of the budget, the Managers shall prepare and present to the Ovvners their 274
estimate of the vvorking Capital requirement for the Vessel and shall each month request the Owners ín vvriting 275
to pay theíunds requiredto run the Vesseltortheensuingmonth, Includingthe paymentoí any occasional or 276
extraordinary item of expenditure, such as emergency repair costs, additíonal Insurance premíums, bunkers 277
or provisions. Such íunds shall be received by the Managers within ten running days after the reoeipt by the 278
Owners of the Managers' vvrltten request and shall be held to the credit of the Owners in a separate bank 279
account. 280

(d) The Managers shall at all times maintain and keep true and correct accounts ín respect of the Management 281
Services ín accordance with the relevant International Pinancial Reporting Standards or such other Standard 282
as the parties may agree, including reoords of all costs and expenditure incurred, and produce a comparison 283
bet\A-een budgeted and actual íncome and expenditure of the Vessel in such form and at such intervals as 284
shall be mutually agreed. 285

The Managers shalỉ make such accounts avallable for inspection and audíting by the Owners and/or thelr 286
representatives in the Managers' offlces or by electronic means, provided reasonable notice ís given by the 287
Ovvners, 288

(e) Notwithstanding anything contained herein, the Managers shall in no circumstances be required to use 289
or commit their own funds to finanoe the provision of the Management Services. 290

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SECTION 5 - Legal, General and Ouration of Agreement

14. Tradìng Restrictions 291

lf the Managers are providing crew management services in accordance with Sub-clause 5(a) (Crew 292
Management), the O n e r s and the Managers will, priorto the commencement of thlsAgreement, agree on any 293
trading restrictions to the Vessel that may result from the terms and conditions of the Crew's employment. 294

15. Replacement 295

lf the Managers are providing crew management services in accordance with Sub-clause 5(a) (Crew 296
Management), the Owners may require the replacement, at thelr own expense, at the next reasonable 297
opportunity, of any member of the Crew found on reasonable grounds to be unsuitable for Service. If the 298
Managers have tailed to fulfil their obligations in providing suitable qualiíied Crew within the meaning of Sub- 299
clausẽ5(a) (Crew Management), then such repiacement shall be at the Managers' expense. 300

16. Managers’ Right to Sub-Contract 301

The Managers shall not subcontract any of their obligations hereunder vvithout the prior written consent of 302
the Ovvners which shall not be unreasonably withheld. In the event of such a sub-contract the Managers 303
shall remain fully liable for the due pertormance of their obllgations under this Agreement. 304

17. Responsibiirties 305

(a) Force Maịeure - Neither party shall be liable for any loss, damage or delay due to any of the following 306
force majeure events and/or conditions to the extent that the party invoking force majeure is prevented or 307
hindered from períorming any or all of their obllgations under this Agreement, provided they have made all 308
reasonable etĩorts to avoid, minimise or prevent the effect of such events and/or conditions: 309

(i) actsofGod; 310

(ii) any Government requisition, control, intervention, requírement or interíerence; 311

(íii) any circumstances arising out of war, threatened act of war or warlike operations, acts of terrorism, 312
sabotage or piracy, or the consequences thereoí; 313

(iv) riots, civíl commotion, blookades or embargoes; 314

(v) epidemics; 315

(vi) earthquakes, landslides, íloods or other extraordinary vveather conditions; 316

(vli) strlkes, lockouts or other industrial action, unless limited to the employees (whlch shall not include the 317
Crew) of the party seeking to invoke force majeure; 318

(viii) flre, accident, explosion except where caused by negligence of the party seeking to invoke force majeure; 319
and 320

(ix) any other similar cause beyond the reasonable control of either party, 321

(b) Uability to Owners 322

(i) VVìthout prejudice to Sub-clause 17(a), the Managers shall be under no liability whatsoever to the Owners 323
for any loss, damage, delay or expense of vvhatsoever nature, vvhether direct or indirect, (including but 324
not limited to loss of proíit arising out of or in connection with detention of or delay to the Vessel) and 325
howsoever arising in the course of peiíormance of the Management Services U N LE S S same is proved 326
to have resulted solely from the negligence, gross negligence or wilful deíault of the Managers or their 327
employees or agents, or sub-contractors employed by them in connection with the Vessel, in which case 328
(save where loss, damage, delay or expense has resulted from the Managers’ personal act or omission 329
committed with the intent to cause same or recklessly and with knovvledge that such loss, damage, 330
delay or expense vvould probably result) the Managers' liabílity for each incident or series of incidents 331
giving rise to a claim or claims shall never exceed a total of ten (10) times the annual management fee 332
payable hereunder. 333

(ii) Acts or omissions o f the Crew - Notvvithstanding anything that may appear to the contrary in this 334
Agreement, the Managers shall not be liable for any acts or omlssions of the Crew, even if such acts 335

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or omissions are negligent, grossly negligent or wilful, except only to the extent that they are shown to 336
have resulted from a íallure by the Managers to discharge their obligations under Clause 5(a) (Crew 337
Management), in which case their liability shall be limited in accordance with the terms of this Clause 338
17 (Responsibiiities). 339

(c) Indemnity - Except to the extent and solely for the amount therein set out that the Managers would be 340
llable under Sub-clause 17(b), the Owners hereby undertake to keep the Managers and their employees, 341
agents and sub-contractors indemniíied and to hold them harmless against all actions, proceedings, claims, 342
demanđs or liabilities vvhatsoever or howsoever arising which may be brought against them or incurred or 343
suffered by them arislng out of or ín connection with the períormance of this Agreement, and against and in 344
respect of all costs, loss, damages and expenses (including legal costs and expenses on a full indemnity 345
basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the pertormance 346
of this Agreement 347

(d) “Himalaya" - It is hereby expressly agreed that no employee or agent of the Managers (including every 348
sub-contractor from time to time employed by the Managers) shall in any circumstances whatsoever be 349
under any llability vvhatsoever to the Ovvners for any loss, damage or delay of whatsoever kind arlsing or 350
resulting đirectly or Indirectly from any act, neglect or default on his part while acting in the course of or in 351
connection with his employment and, without prejudice to the generality of the toregoing provisions in this 352
Clause 17 (Responsibilities), every exemption, limitation, condition and liberty herein contained and every 353
right, exemption from liability, defence and immunity of vvhatsoever nature applicable to the Managers or to 354
which the Managers are entitled hereunder shall also be available and shall extend to protect every such 355
employee or agent of the Managers acting as aíoresaid and for the purpose of all the foregoíng provisions 356
of this Clause 17 (Responsibilities) the Managers are or shall be deemed to be acting as agent or trustee 357
on behalí of and for the beneílt of all persons who are or might be their servants or agenls from time to tlme 358
(including sub-contractors as aíoresaid) and all such persons shall to this extent be or be deemed to be 359
parties to this Agreement. 360

18. General Administration 361

(a) The Managers shall keep the Ovvners and, if appropriate, the Company iníormed in a tímely manner of 362
any incident of which the Managers become aware whlch gíves or may give rise to delay to the Vessel or 363
claims or disputes involving third parties 364

(b) The Managers shall handle and settle all claims and disputes arising out of the Management Services 365
hereunder, unless the Owners instruot the Managers otherwise. The Managers shall keep the Owners 366
approprlately ínformed in a timely manner throughout the handling of such claims and disputes. 367

(c) The Owners may request the Managers to bring or deíend other actlons, sults or proceedings related 368
to the Management Services, on terms to be agreed 369

(d) The Managers shall have power to obtain appropnate legal ortechnical or other outslde expert advice in 370
relation to the handllng and settlement of claims in relation to Sub-clauses 18(a) and 18(b) and disputes and 371
any other matters affecting the interests of the Owners in respect of the Vessel, unless the Owners instruct 372
the Managers othervvise 373

(e) On gíving reasonable notice, the Ovvners may request, and the Managers shall in a timely manner make 374
available, all documentatlon, lnformation and records in respect of the matters covered by thls Agreement 375
either related to mandatory rules or regulatlons or other obligations applying to the Ovvners in respect of 376
the Vessel (including but not limlted to STC W 95, the ISM Code and IS P S Code) to the extent permitted by 377
relevant legislation 378

On giving reasonable notice, the Managers may request, and the Owners shall ín a timely manner make 379
available, all dooumentation, iníormation and records reasonably requlred by the Managers to enable them 380
to perform the Management Services. 381

(f) The Ovvners shall arrange for the provision of any necessary guarantee bond or other security. 382

(g) Any costs incurred by the Managers in carrying out their obllgations according to thís Clause 18 (General 383
Admínistration) shall be reimbursed by the Ovners. 384

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19. Inspection of Vessel 385
The CM/ners may at any time after giving reasonable notice to the Managers inspect the Vessel for any reason 386
they consider necessary. 387

20. Com pliance with Laws and Regulations 388

The parties will not do or permlt to be done anything which might cause any breach or inửingement of the 389
laws and regulations of the Flag State, or of the places where the Vessel trades. 390

21. Duration of theAgreem ent 391

(a) This Agreement shall come into etĩect at the date stated in B o x 2 and shall continue until terminated by 392
eíther party Ì3y giving notice to the other; in vvhich event this Agreement shall terminate upon the expiration 393
of the later of the number of months stated in B o x 18 or a period of two (2) months from the date on which 394
such notice is received, unless terminated earlier in accordance with Clause 22 (Termination). 395

(b) Where the Vessel is not at a mutually convenient port or place on the expiry of such period, this Agreement 396
shall terminate on the subsequent arrival of the Vessel at the next mutually convenient port or place. 397

22. Termination 398

(a) O wners’ o r M anagers’ default. 399
lf either party fails to meet their obligations under this Agreement, the other party may give notice to the 400
party in default requiring them to remedy it. In the event that the party ín deíault fails to remedy it within a 401
reasonable time to the reasonable satistactlon of the other party, that party shall be entítled to terminate this 402
Agreement with immediate etĩect by giving notice to the party in deíault. 403

(b) Notvvithstanding Sub-clause 22(a): 404

(i) The Managers shall be entitled to terminate the Agreement with immedlate effect by giving notice to the 405
CM/ners if any monies payable by the Ovvners and/or the owners of any associated vessel, details of 406
which are listed in Annex “D", shall not have been received in the Managers’ nominated account within 407
ten days of receipt by the Owners of the Managers’ written request, or if the Vessel is repossessed by 408
the Mortgagee(s) 409

(ii) lf the Ovvners proceed with the employment of or continue to employ the Vessel in the carriage of 410
contraband, blockade runníng, or ín an unlawful trade, or on a voyage which in the reasonable opinion 411
of the Managers is unduly hazardous or improper, the Managers may give notice of the deíault to the 412
Ovners, requiring them to remedy It as soon a s practically posslble. In the event that the Ovvners fail to 413
remedy it vvithin a reasonable time to the satisíaction of the Managers, the Managers shall be entitled 414
to terminate the Agreement with immediate etTect by notice, 415

(iii) lf either party fails to meet theír respective obligations under Sub-clause 5(b) (Crew Insurances) and 416
Clause 10 (Insurance Policies), the other party may give notlce to the party in deíault requiring them to 417
remedy it within ten (10) days, íailing which the other party may terminate this Agreement with immediate 418
effect by giving notlce to the party in detault. 419

(c) Extraordinary Termination 420

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or, if the Vessel 421
becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisítioned 422
or has been declared missing or, if bareboat chartered, unless othervvise agreed, when the bareboat charter 423
comes to an end. 424

(d) For the purpose of Sub-clause 22(c) hereoí: 425

(i) the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shallbe 426
the date on which the Vessel’s owners cease to be the regístered ovvners of the Vessel; 427

(ii) the Vessel shall be deemed to be lost either when it has become an actual total loss or agreement has 428
been reached with the Vessel’s underwriters in respect of its constructive total loss or if such agreement 429
wíth the Vessel’s underwriters is not reached it ís adjudged by a competent tribunal that a constructive 430
loss of the Vessel has occurred; and 431

(iii) the date upon which the Vessel ís to be treated as declared misslng shall be ten (10) days after the Vessel 432

Introduction to Shipping 221

A p p e n d ix 15 SHIPMAN 2009

PART II
SHIPM AN 2009
Standard ship management agreement
was last reported or when the Vessel is recorded as mlssing by the Vessel's underwriters, whlchever 433
occurs first, Amisslng vessel shall be deemed lost in accordance with the provisions of Sub-clause 22(d) 434
(ii). 435

(e) In the event the parties fail to agree the annual budget in accordance wlth Sub-clause 13(b), or to agree 436
a change of flag in accordance with Sub-clause 9{d)(ii), or to agree to a reduction in the Management Fee in 437
acx;ordance with Sub-clause 12(d), either party may terminate this Agreement by giving the other party not 438
less than one month’s notice, the result of which will be the expiry of the Agreement at the end of the current 439
budget period or on expiry of the notice perỉod, vvhichever is the later 440

(f) This Agreement shall terminate forthwith in the event of an order beíng made or resolution passed 441
for the vvinding up, dissolution, líquldation or bankruptcy of eittier party (otherwise than for the purpose of 442
reconstruction or amalgamation) or if a receiver or admlnlstrator ís appointed, or lf it suspends payment, 443
ceases to carry on business or makes any speolal arrangement or composition with its creditors 444

(g) In the event of the termination of this Agreement for any reason other than deíault by the Managers the 445
management fee payable to the Managers according to the provisions of Clause 12 (Management Fee and 446
Expenses), shall continue to be payable for a íurther period of the number of months stated in Box 19 as 447
from the effectlve date of termination. If Box 19 is left blank then ninety (90) days shall apply 448

(h) In addition, vvhere the Managers provide Crew for the Vessel in accordance with Clause 5(a) (Crew 449
Management); 450

(i) the Owners shall continue to pay Crew Support Costs during the said íurther period of the number of 451
months stated in Box 19; and 452

(ii) the Owners shall pay an equítable proportion of any Severance Costs which may be Incurred, not 453
exceeding the amount stated in B ox 20 The Managers shall use their reasonalDle endeavours to rrinimise 454
such Severance Costs 455

(i) On the termination, for whatever reason, of this Agreement, the Managers shall release to the Owners, 456
if so requested, the originals where possible, or othervvise certífled copies, of all accounts and all documents 457
specifically relatíng to the Vessel and Its operation 458

(j) The termination of this Agreement shall be without prejudice to all rights accrued due between the parties 459
prior to the date of termination 460

23. BIMCO Oispute Resolution Clause 461

(a) This Agreement shall be governed by and construed in accordance wíth English law and any dispute 462
arising out of or in connection with thls Agreement shall be reterred to arbitration in London in aocordance wlth 463
the Arbitration Act 1996 or any statutory modiíioation or re-enactment thereoí save to the extent necessary 464
to glve effect to the provislons of this Clause. 465

The arbitration shall be conducted in acc»rdance with the London Maritime Arbitrators Association (LMAA) 466
Terms current at the time when the arbitration proceedings are commenced 467

The reíerence shall be to three arbitrators A party wíshing to refer a dispute to arbitration shall apDoínt its 468
arbitrator and send notice of such appoíntment in writing to the other party requiring the other party to appoint 469
its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole 470
arbitrator unless the other party appoints its own arbitrator and gíves notice that it has done so within the 471
14 days specítied, lf the other party does not appoint its own arbitrator and give notice that it has done so 472
wíthin the 14 days speciíied, the party reíerríng a dispute to arbítration may, vvithout the requirement of any 473
íurther prlor notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party 474
accordingly The award of a sole arbitrator shall be bindlng on both parties as if he had been appointed by 475
agreement 476

Nothing herein shall prevent the parties aqreeing in writing to vary these provislons to provide for the 477
appointmentoíasolearbitrator 478

In cases vvhere nelther the clalm nor any counterclaim exceeds the sum of USD50,000 (or such other sum 479
as the parties may agree) the arbitration shall be conducted in accordatxe with the LMAA Small Claims 430
Procedure current at the time when the arbitration proceedings are commenced 481

222 Institute of Chartered Shipbrokers

 A p p en d ix 15 SHIPMAN 2009

PA R T II
S H IP M A N 2 009
Standard ship management agreement
(b) This Agreement shall be governed by and construed in accordance wíth Title 9 of the United States Code 482
and the MantimeLawof the United States and anydispute arisingoutoforinconnectionwiththisAgreement 483
shall be reíerred to three persons at New York, one to be appoínted by each of the parties hereto, and the 484
third by the two so chosen, theír decision or that of any two of them shatl be final, and for the purposes of 485
eníorcing any avvard, judgment may be entered on an award by any court of competent jurisdictíon. The 486
proceedings shall be conducted in acoordance with the rules of the Society of Maritime Arbitrators, Inc. 487

In cases where neither the claim nor any counterclaim exceeds the sum of USD50,0Ũ0 (or such other sum 488
as the parties may agree) the arbítration shall be conducted in accordance with the Shortened Arbitration 489
Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitratíon proceedings 490
are commenced. 491

(c) Thís Agreement shall be governed by and construed in accordance with the laws of the place mutually 492
agreed by the parties and any dispute arising out of or in connection with this Agreement shall be reíerred 493
to arbitration at a mutually agreed place, subject to the procedures applicable there. 494

(d) Notwìthstanding Sub-clauses 23(a), 23(b) or 23(c) above, the parties may agree at any time to refer to 495
mediation any difference and/or dispute arising out of or in connection with this Agreement. 496

(i) In the case of a dispute in respect of whích arbitration has been commenced under Sub-clauses 23(a), 497
23(b) or 23(c) above, the following shall apply: 498

(ii) Either party may at any time and from time to time elect to refer the dispute or part of the dispute to 499
mediation by Service on the other party of a written notice (the "Mediation Notice”) calling on the other 500
party to agree to mediation. 501

(iii) The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice contirm that 502
they agree to mediation, in which case the parties shall thereatter agree a mediator wlthin a turther 14 503
calendar days, íailing which on the application of either party a mediator will be appointed promptly by 504
the Arbitration Tribunal ("the Tribunal") or such person as the Tribunal may designate for that purpose. 505
The mediation shall be conducted in such place and in accordance with such procedure and on such 506
terms as the parties may agree or, in the event of disagreement, as may be set by the mediator 507

(iv) lf the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal 508
and may be taken into account by the Tribunal when allocating the costs of the arbítratíon as between 509
the parties 510

(V) The medlation shall not affect the right of either party to seek such relieí or take such steps as it considers 511
necessary to protect its interest. 512

(vi) Either party may advlse the Tribunal that they have agreed to mediation. The arbitration procedure shall 513
continue during the conduct of the mediation but the Tribunal may take the mediation timetable into 514
account when setting the timetable for steps in the arbitration. 515

(vii) Unless otherwise agreed or speciíied in the mediation terms, each party shall bear its own costs incurred 516
in the mediation and the partles shall share equally the medíator’s costs and expenses. 517

(viii) The mediation process shall be without prejudice and coníidential and no intormation or documents 518
disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under 519
the law and procedure governing the arbitration, 520

(Note: The parties should be aware that the m ediation prcxĩess may not necessarily interrupt time limits.) 521

(e) lf Box 21 in Part I is not appropriately filled in, Sub-clause 23(a) of thís Clause shall apply. 522

Note Sub-clauses 23(a), 23(b) and23(c) arealternatives: indicate alternative agreed in B o x 21. Sub-clause 523
23(d) shall apply in all cases. 524

24. Notices 525

(a) All notices given by either party or their agents to the other party or their agents in accordance with the 526
provlsions of this Agreement shall be in writing and shall, unless speciíically provided in this Agreement to 527

Introduction to Shipping 223

A p p e n d ix 15 SHIPMAN 2009

P A R T II
S H IP M A N 2009
Standard ship management agreement
the contrary, be sent to the address for that other party as set out in Boxes 22 and 23 or as appropriate or 528
to such other address as the other party may deslgnate in writing 529

A notice may be sent ty registered or recorded mail, íacsímile, electronically or delivered by hand inaccordance 530
wíth this Sub-clause 24(a). 531

(b) Any notice given underthis Agreement shall take effect on receipt ty the other party and shallbe deemed 532
to have been received: 533

(i) if posted, on the seventh (7"’) day after postíng; 534

(ii) if sent by íacsimile or electronically, on the day of transmission, and 535

(íii) if deiivered by hand, on the day of delivery, 536

And in each case proof of posting, handing in or transmission shall be proof thatnoticehas been given, 537
unless proven to the contrary. 538

25. Entire Agreement 539

Th is Agreement constltutes the entire agreement between the parties and no promise, undertaking, 540
representation, warranty or statement by either party prior to the date stated in B ox 2 shall affect this 541
Agreement. Any modiíication of this Agreement shall not be of any effect unless in writing signed by or on 542
behalí of the parties, 543

26. Third Party Rights 544

Except to the extent provided in Sub-clauses 17(c) (Indemnity) and 17(d) (Himalaya),no thirdparties may 545
eníorce any term of this Agreement, 546

27. Partial Validity 547

lf any provision of thls Agreement is or becomes or is held by any arbitrator or other competent body to be 548
illegal, invalid or uneníorceable ín any respect under any law or jurisdiction, the provision shall be deemed 549
to be amended to the extent necessary to avold such lllegality, invalidity or unentorceability, or, ịf such 550
amendment is not possible, the provision shall be deemed to be deleted from this Agreement to the extent 551
of such illegality, invalidíty or uneníorceabllity, and the remaining provisions shall continue in full force and 552
effect and shall not in any way be affected or impaired thereby 553

28. Interpretation 554

In thls Agreement: 555

(a) Singular/Plural 556

The singular inciudes the plural and vice versa as the context admits or requires, 557

(b) Headings 558

The index and headings to the clauses and appendioes to this Agreement are for convenience only andshall 559
not affect íts construction or interpretation. 560

(c) Day 561

“Day” rĩieans a calendar day unless expressiy stated to the contrary, 562

224 Institute of Chartered Shipbrokers

 A p p en d ix 15 SHIPMAN 2009

ANNEX “A” (DETAILS OF VESSEL OR VESSELS)

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: SHIPMAN 2009

Date of Agreement;

N am e of Vessel(s);

Particulars of Vessel(s):

Introduction to Shipping 225

A p pendix 15 SHIPMAN 2009

ANNEX “B” (DETAILS OF CREW)

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: SHIPMAN 2009

Date of Agreement:

Details of Crew:

Numbers Rank Nationality

226 Institute of Chartered Shipbrokers

 A p p en d ix 15 SHIPMAN 2009

ANNEX “C” (BUDGET)

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: SHIPMAN 2009

Date of Agreement:

M anagers' initial budget with effect from the com m encem ent date of this A greem ent (see Box 2):

Introduction to Shipping 227

A p p e n d ix 15 SHIPMAN 2009

ANNEX “D” (ASSOCIATED VESSELS)

TO THE BIMÒO STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: SHIPMAN 2009

N O T E ; P A R TIE S S H O U L D B E AVVARE T H A T B Y C O M P L E T IN G T H IS A N N E X “D ” T H E Y W IL L BE
S U B J E C T TO T H E P R O V IS IO N S O F S U B -C L A U S E 2 2 (b )(i) O F T H IS A G R E E M E N T .

D ate of Agreement:

Details of Associated Vessels:

228 Institute of Chartered Shipbrokers

 A p p en d ix 15 SHIPMAN 2009

ANNEX “E” (FEE SCHEDULE)

TO THE BIMCO STANDARD SHIP MANAGEMENT AGREEMENT
CODE NAME: SHIPMAN 2009

Introduction to Shipping 229

A p p e n d ix 15 SHIPMAN 2009

230 Institute of Chartered Shipbrokers

 A p pendix 16 PONASBA Standard LinerAgency Agreem ent

J l,g P ederation o f N ational A ssociatio ns o f Ship B rokers and A g ents H>NA SftA

STANDARD LINER AND GENERAL AGENCY AG REEM ENT

Revised and adopted 2001

Approved by BIMCO 2001

It is hereby agreed betvveen:
...................................... of.................................................................(hereinaữer referred to as the Principal)
and
............................................o f................................................................................(h ere in a tter referred to as the A gent)
on th e .................................................... day o f ...................................................................... 2 0 .......................................
that;
1.00 T he P rincipal hereby appoints the A g en t as its L iner A gent for all its ow n ed and /or ch artered v essels
including any space or slot charter ag reem en t serving the trade b e tw e e n ................a n d .................
1.01 T his A g reem ent shall com e into etTect o n ......................... and shall co ntinu e u n til..................................

Thereaữer it shall continue until terminated by either party giving to the other notice in Nvriting, in which
event the A greem ent shall term inate upon the expiratio n o f a period o f .....m onths from the date upon
which such notice was given.
1.02 T he territory in vvhich the A gent shall p ertb rm its d uties uiider the A g reem en t shall b e ....................
hereinatìer reterred to as the “Territory”.
1.03 T his A greem ent covers the activ ities d escribed in section 3 ...........................................
1.04 T he A g en t undertakes nol to accept the rep resen tation o f o ther sh ip pin g co m p an ies n or to en g ag e in
NVOCC or such freight forwarding activities in the Teưitory, which are in direct competition to any o f
the Principars transportation activities, vvithout prior written consent, which shall not unreasonably be
withheld.
1.05 T he P rincipal undertakes not to appoint any o th er p arty in the A g e n t’s T erritory for the se rv ices d cíĩned
in this Agreemenl.
1.06 T he estab lish ed custom o í t h e trade and/or port shall app ly and form part o f th is A greem ent.

1.07 In coun tries vvhere the position o ítl ic agcnt is in any w ay legally protected o r regulated, the A g en t shall
have the beneiìl o f such proteclion or regulation.
1.08 All aspects o f the P rincipaP s b usiness are to be treated confìdentially and all tìles and records p ertain in g
to this business are the property of'the Principal.

2.0 Duties o f the Agent

2.01 To represent the P rincipal in the T eư itory, u sing his b est end eav ou rs to coiĩiply at all tim es w ith any
reasonable speciíic instructions vvhich the Principal may gi ve, including the use o f Principars dociimen-
tation, terms and conditions.
2 .02 In consultatio n w ith the P rincipal to reco m m en d a n d /o r appoint on the P rin c ip a rs behalt’ and acco u n t,
Sub-Agents.
2.03 In co nsu ltation w ith the Principal to recom m end a n d /o r to ap p o in t on the P rin c ip a l’s b e h a lf an d accou nt,
S tevedores, W atchm en, T allym en, T erm inal O perators, H auliers and all k in ds o f suppliers.

2 .04 T he A gent w ill not be responsible for the n eg lig en t acts or d eíau lts o f the S u b-A gent o r S ub -C o n trac-
tor unless the Agent fails to exercise due care in the appointm ent and supervision o f such Sub-Agent
or Sub- Contractor. Notwithstanding the foregoing the A gent shall be responsible for the acts o f his
subsidiary co m panies appointed w ithin the co n tex t o f this C lause.

2.05 T he A g en t w ill alvvays strictly observe the sh ip p in g law s and reg ulation s o f the co un try and w ill indem -
nify the Principal tb r fines, penalties, ex p en ses or restrictio ns that m ay arise due to the failure o f the
Agent to comply herevvith.

Introduction to Shipping 23 I
A p p e n d ix 16 PONASBA Standard LinerAgency Agreement

A ctlv ities o f A gcnt (D eleie thosc w hich do not apply)

3.1 M a rk e tin g and Sales

3.11 To provide m arkeling and sales activilies in the Territory, in accordance wiih general guidclines laid dow n by the
Principal, to canvass and book cargo. to publicise ihc ser\'ices and to m ainlain contact with Shippers. C onsignecs,
Fons'arding Agents, Port and olher A uthorities and T rade Organisations.

3.12 To providc statistics and iníbrm ation and to repo rt on carg o bookings and use o f space allotm ents. To announce sail-
ing and/or arrivals. and to quote ữ eig h t rates and ann o u n ce tìreight tariíTs and am cndm ents.

3.13 To arrangc for pubiic relations w ork (includ in g ad v ertisin g , press rcleases, sailing schcdules and gcneral prom olional
m aterial) in accordance with thtí budgct agreed w ith thc Principal and ibr his account.

3.14 To attend to conference, consortia and /o r allian ce m atlers on b e h a lí'o f the Principal and tb r the P rin cip ars account

3.15 To issue on behairoT thc Principal B ills o f L anding and M anitests, dclivcry orders, certitìcatcs and such othcr
docum ents.

3.2 Po rt Agency

3.21 'ìo arrange for berthing oTvessels, loading and discharging o f the cargo. in accordance wiih the local custom and
conđitions.

3.22 To arrange and co-ordinate all aciivities o f th c Tcrm inal O peraiors, Sievedores, Tallym en and all o ther Coniractors, ‘ n
the interest o fo b la in in g the best posslblc operation an d đcspaich o f th e Principal’s vessel.

3.23 I'o arrange for calling tbnvard, rcceplion and loading o f o u tu a rd cargo and dischargc and rcleasc o fin w a rd cargo and
lo attend to the transhipm cnl o f through cargo.

3.24 To arrange for bunkering, repairs, husbandry, crcw changes, passengers, sh ip 's stores, spare parts, technicai and nauli-
cal assistance and m edical assistance.

3.25 To carry out ihe Principal’s requircm ents co n cem in g claim s handling, p & I m altcrs, G eneral Ấ veragc and/or Insur­
ance, and ihe appoinlm cnl o f Surveyors.

3.26 To attend lo all necessary docum entation and to attend to consular requirem ents.

3.27 To arrangc tbr and altcnd lo ihc clearancc o f thc vesseí an d lo arrangc tb r all olher services appertaining to the
v essers m ovem enis ihrough thc port.

3.28 To report lo ihc Principal ihe v cssers position and to prepare a statem ent o rtầ c ts ofth<; call and/or a porl log

3.29 To keep the Principal regularly and tim ely infortned on Port and w orking conditions likely to atĩecl ihe despatch o f
the P rín cip ars vessels.

3.3 C o n ta in e r a n d R o/R o TraíYìc

W here “equipm ent’' is reteư ed lo in ihe íb llo w in g seclion it shall com prise Container, lìat racks, irailers o r sim ilar
cargo carrying devices, ow ned, leased o r o th e ru is e controlled by ihe Principal.

3.31 To arrange tbr the booking o f equiptnenl on ihe vessel.

3.32 To aư angc for thc sluíĩing and unslutlìng ot' LCL carg o at the porl and lo arrangc tb r thc provision o f inland LCL
terminals.

3.33 lo providc and adininisier a proper system , o r to co m p ly \viih ihc p rin c ip ars system fbr thc conỉrol and rcgistralion
o f equipm cnt. 'lo organise equipm cnl sto ck \vilhin thc Territory and m ake provision for storage, positioning and
rcpositioning o f thc equipm enl.

3.34 io com ply with C uslom s requirem ents and arrange tb r equipnienl inlerchange docum cnts in respcct o flh c m ovc-
ments for w hich ihe Agent is resỊH)nsible and lo conlroi the supply and usc o f locks, scals and labels.

3.35 ĩo make equipm ent avaiỉable and lo a ư a n g e m iand haulage.

3.36 To u ndenake the leasing o f equipm ent inlo and re-delivcr>' out oí thc system .

3.37 To operalc an adcquate cquipm ent đam ag e control system in com pliance with the P rin cip ars instructions. To arrange
for equipm ent repairs and m aíntenance, vvhen and \sh e re necessar>' and to report on the condition o f equipnient under
th e A g e n t’s control.

232 Institute o f Chartered Shipbrokers

 A p pendix 16 PONASBA Standard LinerAgency Agreement

G eneral Agency

3.41 To supervise, aclivities and co-ordinate all markeling an d sales activities o f Po n , Inland A gents and/or Sub-
agents in the Territory, in accordance with general g u id elin es laid dow n by the Principal and to use every
etĩo rt to obtain business trom prospective clients and to co n so lid ale the flow o f slatistics and inform ation.

3.42 To supervise and co-ordinate all activities o f Port, Inland A gents an d /o r Sub-agents as sel forth in the
agreem enl, in order to cnsure the proper períbrm ance o f al! custom ary requirem ents for the besl possible
operation o f th e Prìncipal's vessel in the G .A .’s T eư ito ry

3.43 In consultation with the Principal to recom m end an d /o r ap p o in t on the P rìn cip al’s beh aif and account Port,
Inland A genls, and/or Sub-Agents if required.

3.44 To provide P on, Inlanđ A gents and/or Sub-agents Nvith space allo catio n s in accordance with the Principal's
requirem enls.

3.45 To aư ange for an etììcient roialion o f vessels Nvithin the Territory, in co m pliance with the P rin cip ars instruc-
tions and to arrange for the m ost econom ical despatch in ihe ports o f its area \vithin the scope o f the sailing
schedule.

3.46 To liaise w ilh Porl A genls and/or Sub-agents if and w here required, in the Territory in arranging íb r such
matters as bunkering, repairs, crew changes, ship’s stores, sp are parts, tech n ical, naulical, m edical assistance
and consular requirem ents

3.47 To inslruct and supervise Port, Inland A genls and/or S u b -A g en ls reg ard in g the Principals requirem enls
concem ing claim s handling. p & I m alters and/or insurance, an d the app o in tm cn t o f Surveyors. All expenses
involved with claim s handiing other than routinc claim s are tb r P rin cip al’s account.

3.5 Accountìng and Finance

3.5.1 To provide for appropriate records o f thc PrincipaPs financial position to he m aintained in Ihe A g en t’s books,
w hich shall be available tbr inspection and to prepare periodic tìnancial slatem ents.

3.52 To check all vouchers received tbr services rendered an d to prcpare a pro p er disbursem cnl account in respect
o f cach voyage or accounling pcriod.

3.53 To advise the Principal o f all am endm ents 10 port tarirts an d o th er ch arges as they becom e known.

3.54 To calculalc ữcight and othcr chargcs according to rariíTs supplicd by ihe Principal and exercise every care
and diligence in applying all tcrm s and condilions o f such la riíĩs o r o lh e r freighi agreem ents. I f the Principal
organises or em ploys an organisation for checking freight calculalions and docum entation the costs for such
checking lo be entirely for the Principal’s account.

3.55 To collect freighi and relaied accounls and remil lo ihe Principal all frcights and other m onies belonging to
the Principal al such periodic intervals as the Principal m ay require. All ban k charges to be for the P rincipai's
account. The Agenl shall advise the Principal ot the cu slo m ary cred it term s and aưangem ents. l f ihc A gent is
rcquircd lo granl crtd il lo cuslom ers duc lo com m ercial rcasons, thc risk in rcspccl o f oulslanding collcclions
is fbr the P rincipars accounl unless ihc Agcnt has gran ted cred it Nvithout the knoNvledge and prior consent o f
the Principal.

3.56 The A gcnt shal! have authority lo rclain money trom the rreighl collccled lo cover all past and current dis-
bursem ents, subject to providing regular cash position statem en ts to the Principal.

3.57 The Agent in carrying oul his dutics under this A g reem en t shall n o l bc rcsponsibic lo ihc Principal tb r loss or
dam age caused by any Bankcr, Broker or olher pcrso n , inslructcd by thc A gcnl in good íầith unless ihe same
happens by or Ihrough the vvillul neglect or d etầull o f the A gent. T he burden o íp ro v in g the wilful neglect ot'
the A gent shall be on the Principal.

Prin cip ars Dutỉes

4.01 To provide ali docum entation, necessary lo tulíìỉ the A g en t's task log eth er w ilh any stationery speciíìcally
requircd by the Principal.

4.02 To give full and timely iníbrm ation regarding :he vesseP s schedules, ports o f call and line policy insotầr as it
aíTects the port and sales agency activilies.

4.03 To provide the A gents im m ediately upon requesl w ith all necessary lunds lo cover advance disbursem ents
unless ihe Agent shall have sutììcient íunds tVom the frcights collected.

4.04 The Principal shall al all tim es indem nity the A gent ag ain st all claim s, charges, losses, dam ages and expenses
vvhich the Agent m ay incur in connection with the fulíìlm enl o f his d u ties under ihis A greem ent. Such indem-
nity shall exlend to all acts, m atlers and things done, suíTered o r incurred by the A genl during Ihe duraúon
o f Ihis A greem ent, notw ithslanding any term ination thereoí', provided alw ays, that ihis indem nily shall not
extend lo malters arising by reason o f the wilful m isco n d u ct o r n eg lig en ce o f the Agent.

Introduction to Shipping 233

A p pendix 16 PONASBA Standard LinerAgencyAgreem ent

4.05 W here the Agent provides bonds, guaraniees and any other ỉbrm s o f security to C uslom s or othcr statulory authorities
then the Principal shall inđem nity and reim burse the Agenl im m ediately such claim s arc made. providcd thcy do noi
arise by reason o f ihc \vilful m isconduct o r ihe nculiuence o fth c Agent.

4.06 l f m utually agreed the Principal shall take ovcr the conduct o f any dispuic \vhich m ay arise bclw ecn ihc Agenl and
any ihird party as a result o f the perlbm iance o f the A g en t’s duties.

5.0 Rem uneration

5 .0 1 The Principal agrees lo pay ihe agenl and the Agenl acccpls, as consideralion íbr the services rendered, ihe com-
inissions and fees sel tb n h on the schediile allachcd to this Agreeinent A ny íees speciíìed in m onetary units in the
allachcd schcdulc shall be review ed every 12 m onths and if necessary adjusied in accorđance with such recognised
cosl o f living indcx as is publishcd in ihe countrv o f the Agent.

5.02 Should the Principal require the A geni to undertake fu!l Processing and settlem cnt o f claim s, ihen the A genl is entitled
to a separaie rem uneration as agreed vviih ihe Principal and com m cnsuraie wiih the work involved.

5.03 The rem uneration spccitìed in ihe schcđule attachtíd is in respect o rth e ordinary and anticipalcd dutics o flh c Agcnt
\vithin Ihe scope o f ihis A grecnient. Should the A gent be required lo pertbrm duties bcyond ihe scope o f ihis Agree-
ment then the lerm s on w hich the A gent m ay agree to períbrm such duties vvill be subjecl to exprcss agrcem cnt
betw een the panies. \Vithout prejudice lo the generality o f thc forcgoing such duties may include e.g. parlicipaling in
conlerence activities on b e h a lf o fth e Principal, booking t'are-paying passengers, sending oul general average notices
and m aking collections under average bonds insotầr as these duties arc not pcríbrm ed by thc average adjusler.

5.04 If the T aritĩcu rren cy varics in valuc against ihc iocal currency by more than 10% aílcr consideration o f any currcncy
adjustm ent tacior existing in the trade the basis íbr calculalion o f rem uneration shall be adjusted accordingiy.

5.05 Any exlra expcnscs occasioned by speciíìc additional rcquirem ents o f the Principai in the use o f Computer equipmcnt
and system s for the pcrform ancc o f Ihe A gent’s dulies to the Principal shall be borne by the Principal.

5.06 The Principal is responsible for all addilional expenscs incuưcd by thc A gcnl in connecling its com puters to any
national or local port com m unity syslcm .

6.0 Duration

6.01 This agrccm eni shall rem ain in tbrce as spcciíìcd in clause 1.01 o f this Agreem ent. Any noticc ot’lcrm ination shall bc
sent by rcgistered or recorded mail.

ÍÌ.02 lf tho A grccm enl tbr any rcason olhcr than ncgligcnce or wilful m isconđuct oí the A genl should by cancelled at an
carlier date ihan tm ihc expiry o ỉ thc notice given under clause 1.01 hereoT, ihe Principal shall com pensatc thc Agcnt.
The com pensation payable by the Principal to ihe agent shall be delerm ined in accordancc wilh clausc 6.04 bclow,

6.03 lf for any reason thc Principal w ithđraw s or suspends ihe Service, ihe Agent m ay w ithdraw ữ o m this agrecm cnl
íbrthvvith, \vilhout prejudice to its claim íbr com pensation.

6.04 T he basis orco m p cn satio n shall be ihc m onthly average ot the com m ission and t'ces eam ed during the prcvious 12
m onths or if less ihan 12 m onths have passed Ihen a reasonablc estim alc o f Ihc sam c. m ulliplied by ihc n u iĩiberol'
m onlhs íroin the dale oí'cancellaiion unũl (he contraci wou!d have bcen icm iinalcd in accordance wilh clausc 1.01
above. P urthem iore thc gross redundancy paym enls. which the A gent and/or Sub-A gent(s) is com pelled to niake lo
em ployees made rcdundanl by reason o f ihe w ilhdraw al or suspension o f Ihe P rin cip ars Service, or icrm inalum ol this
Aiireemtínl, shall also be laken inlo accounl.

6.05 The A genl shall have a general lien on am ounts payable lo thc Principal in respecl o fa n y undisputed sum s duc and
ow ing to ihe A geni including but not lim ilcd to com inissions, disburscnicnis and duTies.

7.0 .lu risd ictio n

''.O l a) Tliis A greernent shall be governed by an d c o n slru ed in accordance wiilì ihc la\vs o f lh c counlry in wlìich ihc
A gent has its princlple place o f buRÌness and any dispute arising oul o f or in connection wilh ihis A greeinent shall be
reterređ to arbitralion in Ihat country subjcct to thc proccdurcs applicable thcrc.

b) This A greem ent shalì be govem ed by and conslrucd in accordance with ihe lavvs of‘..........................................................
and any dispute arising oul o f or in conneclion with this Agrecm cni shall be refcrred to arbitralion a t ............... ............. .
subjcct lo the proccdurcs applicablc ihcre.

c) A ny đisputc arising out o f this A greem ent shall bc rcíerrcd to urbiưalion a l..........................................................................
subject to thc law and procedurcs applicablc there.

(suhcỉuuses f a j [h] ổi [c] are uplions. I /Ị b ] or [c] are n o tỷiỉỉed in ỉhen (a) sh a lỉ appỉy.)

234 Institute of Chartered Shipbrokers

 A p p en d ix 16 PONASBA Standard LinerAgencyAgreem ent

R E M U N E R A T IO N S C H E D U L E B E L O N G IN G T O STA N D A R D L IN E R AND G E N E R A L A G E N C Y A G R E E M E N T

Belvveen....................................................................a n d ............................................................. datc...............................

(As P rincipal) (A s Agent)

The Agem is entitled lo the following remuneration based on all total íreight eam ings (including any surcharges,(eg BAF, CAF)
handling charges (eg TH C ) and ữ eig h t additionals including inland transport w hich may be agrccd) o fth e P rin cip ars liner
Service lo and from the T eư itory to be paid in A gent’s local cuưency. The total rem uneration p er call shall not in any case be
low er than the local fee applicable
1 A. W here the A gent proviđes all the services enum erated in this A greem ent the C om m ission shall be;

Sen-ices oulNvard.......................% [ M in .......... per conl o r tonne/cbm ] } MIN

invvard........................% [ M in ...........pcr conl or tonne/cbm ] } LUM P SUM

}
2. .........................% for cargo when only booking is involved. [ M in ...per conl ] } PER
ỉ
3. ..........................% for cargo when only handling is involved. [ M in ...p er cont ] } C A L L .......................

(“only handling” in the rem uneration schedule is so dcíìned that the duties o f an A gent are to cal!
ĩoPAard and othen^ ise arrange íbr the cargo to be loaded on board, vvhere thc speciíìc booking has been
m ade elsevvhere and acknovvledged as such by thc shipper as nom inatcd for the Principaỉ’s Service.

4. In respecl o f movements o f cargo outside Ihe Agent’s Territory.% o f the gross tolal freight is payable in
cases vvhere only colleclion o f ữ eighl is involved.

5. An additional fec for coniaincrs and/or units cntering or leaving tíie inventory control system o flh c Agcnt a fce
of........................pcr unil.

II A. ............................... % for cargo loaded on board in bulk. ( M i n ................ per tonne/cbm j

2. ......................................% íbr cargo discharged in bulk. [ M in ...... per lonnc/cbm ]

III Wherc the Agent providcs only the scrviccs as non-port ageni the remuneration shall be:

When actually booked/originaling from Ihis area:

1. S ervices outvvard...................... % [ M in............ pcr cont o r tonnc/cbm )

in w a rd .........................% [ M in ...........per cont o r lonne/cbm Ị

2. An addilional fee for coniainers and/or units entering or leaving ihc invcniory conlrol system o f the Agenl a fee ot'
....................... per unit.

IV W hcrc ihc A gcni provides only the services as non-port agent the rem uneralion shall bc:

!. ............................. % for cargo loaded on board in bulk. [ M in ....... per tonne / cbm Ị

2. ...............................% for cargo discharged in bulk. [ M in ...... per tonne / cbm 1

5. Clearance and sh ip 's husbandry fce shall bc as agrccd.

6. A Commission ot'................ % shall be paid on alỉ ancillary chargcs colleclcd by the Agent on behaií’o f Ihc Principal such
as D epot Charges, C ontainer D em urragc, Conlaincr D am agc ctc.

7. Com m unications: The Principal will either pay aclua! com m unicalion cxpcnscs on a cost plus basis o r pay a lumpsum
m onthly on an average cosl plus basis, to be review ablc.

8. Travclling expenses: When the Agent is requested by the Principal lo undertakcjoum cys o fa n y signiíìcant distance and/or
duration. all travel expenses including accommodation and olhcr expcnses wiil bc for the Principal’s accounl.

9. Documcnlary and A dminislrative Charges: Such charges to be levied as appropriate by ihc Agent to cargo interests and
lo rem ain w ith the A gent even ifre late d to the trade o f the principal.

10. ỉn case o f Transhipm cnt C argo, a transhipm ent fee of..................... per cont / tonne /cbm is chargcd by thc Agent.

PR iN C íPA L AGENT

Introduction to Shipping 235

A p p e n d ix 16 PONASBA Standard LinerAgencyAgreement

236 Institute of Chartered Shipbrokers

 A p p e n d íx 17 W orld'sTime Zones

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2^

9
LosAngalM
4«in
^
NawYorfc
7«m
London
U N oon
Cakutta
5pm
SydiMy
lOpm

Introduction to Shipping 237

A p pendix 17 W orld'sTim e Zones

238 Institute o f Chartered Shipbrokers

 A p p e n d ix 18 Beauíort Scale W ind Porce Conversions

Force Type Sea Conditions Knots Km/Hr m/sec mph

0 Calm Sea like a mirror Less than 1 Less than 1 Less than 1 Less than 1
Ripples with appearance of
1 Very light 1 -3 1 -5 1 -2 1 -3
scales, no foam crests
VVavelets, small but pro-
Light
2 nounced. Crests with glassy 4 -6 6- 11 2- 4-7
breeze
appearance, but do nõt break.
Large vvavelets, crests begin
Gentle
3 to break. Glassy looking foam, 7-10 12-19 3-5 8-12
breeze
occasional white horses.
Moderate Small vvaves becoming longer,
4 11 - 16 20-29 6-8 13-18
breeze írequent white horses.
Moderate vvaves of pronounced
Fresh
5 long form. Many white horses, 1 7- 21 30-39 9- 11 19-24
breeze
some spray.
strong Some large vvaves, extensive
6 22-27 40-50 12-14 2 5- 31
breeze vvhite foam crests, some spray.
Sea heaped up, vvhite foam
7 Near gale from breaking vvaves blovving in 28-33 51 -61 14-17 32-38
streaks with the wind.
Moderately high and long
waves. Crests break into spin
8 Gale 34-40 62-74 17- 21 39-46
drift, blovving foam in well
marked streaks.
High vvaves, dense foam
strong streaks in wind, wave crests
9 41 -4 7 75-87 21 - 24 47-54
gale topple, tumble and roll over.
Spray reduces visibility.
Very high waves with long over-
hanging crests. Dense blow-
10 storm ing foam, sea suríace appears 48-55 88- 101 24-28 55-63
white. Heavy tumbling of sea,
shock-like, poor visibility.
Exceptionally high vvaves,
sometimes concealing small
and medium sized ships. Sea
Violent
11 completely covered with long 56 - 63 102-117 28-3 64-73
storm
white patches of foam. Edges
of wave crests blovvn into froth.
Poor visibility.
Air filled with foam and spray,
12 Hurricane sea white with driving spray, >64 > 119 > 33 >74
poor visibility.

Introduction to Shipping 239

A p p e n d ix 18 Beauíort Scale VVind Porce Conversions

240 Institute of Chartered Shipbrokers

 A p p en d ìx 19 BIMCO Ice Clause

BIMCO General Ice Clause for Voyage Charter Parties and Delay for
Charterers' Purposes Clause
General Ice Clause for Voyage Charter Parties
The Vessel shall not be obliged to force ice but, subject to the Ovvners' approval and having due
regard to its size, construction and class, may follow ice-breakers when reasonably required.
(a) Port of Loading
(i) lf at any time after setting out on the approach voyage the Vessel's passage is impeded
by ice, or if on arrival the loading port is inaccessible by reason of ice, the Master or Ovvners
shall notiíỵ the Charterers thereot and request them to nominate a safe and accessible
alternative port.
If the Charterers fail vvithin 48 running hours, Sundays and holidays included, to make such
nomination or agree to reckon laytime as if the port named in the contract were accessible or
declare that they cancel the Charter Party, the Owners shall have the option of cancelling the
Charter Party. In the event of cancellation by either party, the Charterers shall compensate the
Ovvners for all proven loss of earnings under this Charter Party.
(ii) lf at any loading port the Master considers that there is a danger of the Vessel being
frozen in, and provided that the Master or Ovvners immediately notiíy the Charterers thereot, the
Vessel may leave with cargo loaded on board and proceed to the nearest safe and ice free place
and there await the Charterers' nomination of a safe and accessible alternative port vvithin 24
running hours, Sundays and holidays excluded, of the Master's or Ovvners' notiíìcation. If the
Charterers fail to nominate such alternative port, the vessel may proceed to any port(s), whether
or not on the customary route for the chartered voyage, to complete with cargo for the Owners'
account.*
(b) Port of Discharge
(i) lf the voyage to the discharging port is impeded by ice, or if on arrival the discharging
port is inaccessible by reason of ice, the Master or Ovvners shall notiíy the Charterers thereoí. In
such case, the Charterers shall have the option of keeping the Vessel vvaiting until the port is
accessible against paying compensation in an amount equivalent to the rate of demurrage or of
ordering the Vessel to a safe and accessible alternative port,
lf the Charterers fail to make such declaration vvithin 48 running hours, Sundays and holidays
included, of the Master or Ovvners having given notice to the Charterers, the Master may
proceed vvithout turther notice to the nearest safe and accessible port and there discharge the
cargo.
(ii) lf at any discharging port the Master considers that there is a danger of the Vessel being
frozen in, and provided that the Master or Ovvners immediately notity the Charterers thereoí, the
Vessel may leave with cargo remaining on board and proceed to the nearest safe and ice free
place and there avvait the Charterers' nomination of a safe and accessible alternative port vvithin
24 running hours, Sundays and holidays excluded, of the Master's or Owners' notiíìcation. If the
Charterers fail to nominate such alternative port, the vessel may proceed to the nearest safe and
accessible port and there discharge the remaining cargo.
(iii) On delivery of the cargo other than at the port(s) named in the contract, all conditions of
the Bill of Lading shall apply and the Vessel shall receive the same íreight as if discharge had
been at the original port(s) of destination, except that if the distance of the substituted port(s)
exceeds 100 nautical miles, the íreight on the cargo delivered at the substituted port(s) shall be
increased proportionately.
* N ote: In trades w here the term s a nd conditions o íth e charter p a rty are n o t in c o rp o ra te d

into the bill(s) o íla d in g , such bill(s) m u st contain an express sta te m e nt p e rm ittin g the ve s s e l to
com plete w ith cargo a t alternative port(s), vvhether o r n o t on the cu stom ary route fo r the
ch artere d voyage.

Delay for Charterers' Purposes Clause

lf the Vessel is prevented from leaving the port after completion of loading/discharging for more
than two (2) hours vvaiting for cargo papers or for any other reason attributable to cargo being
loaded or discharged including but not limited to control and/or clearance by customs or other
authorities and/or any other charterers' purposes, the Charterers shall pay the Ovvners
compensation in an amount equivalent to the rate of demurrage stipulated in the charter.

Introduction to Shipping 241

A p p en d ix 19 BIMCO Ice Clause

242 Institute o f Chartered Shipbrokers

 A p p e n d ìx 20 St Lavvrence Seavvay

N-

Jacques Cartier
Bridge

The st, Lawrence Seaway

1. St. Lambert Lock. 2, Cote Ste. Catherine Lock. 3. and 4. Beauharnois Locks.
6. Snell Locks. 6. Eisenhower Lock, 7. Iroquois Lock.
8. VVelland Canal

Introduction to Shipping 243

A p pendix 20 St Lawrence Seaway

244 Institute of Chartered Shipbrokers

 A p p e n d ix 2 l Kiel Canal

Introduction to Shipping 245

A p p e n d ix 2 l Kiel Canal

246 Institute of Chartered Shipbrokers

 A p p en d ix 22 Suez Canal

p T

» Lake Timsáh

Great Bitter
La ke
Little Bitter
Lake

SUEZ.
PORTTEWFIK
PORT IBRÀHlM

SU EZ CANAL

Introduction to Shipping 247

A p pendíx 22 Suez Canal

248 Institute of Chartered Shipbrokers

 A p p en d ix 23 Panama Canal

Introduction to Shipping 249

A p pendix 23 Panama Canal

250 Institute of Chartered Shipbrokers

 A p p en d ix 24 Shipping Report

End in sight for Oz mineral prices?

AUSTRALIA'S malor commodity
terecaster has dlsmissed suggestlons
that Chlna's surging economíc growth
will continue to underpin high prices
for Iron ore and coal.The Australian
Bureau of Agrlculture and Resource
Economics (Abare), In Its latest
commodity outlook, does predict that
the Australian commodity export
earnings wlll reach a record A$116Bn
($90.2Bn) for the
2005-6 Ánancial year. But It also
predlcts
that prices wHI soon start falling.The
report finds that Increases In value
o f mlnerals and energy exports, to a
record
$66Bn, are largely caused by hlgher
volumes and príces for metallurglcal
coal and thermal coal and Iron ore.
The total value of mlnerals and
energy exports will increase during
Ihis year by 23%, it predicts, but
príces for tÝiost mlneráls and energy
wHI fall over the next six months.
The reason is assumed weaker
growth in
global industrlal activlty, reduced dem and for raw materials reAects low er grovvth m arkets,” the report says. It disraisses suggestíons
Chlnese demand for commodltles and in the dem and for minerals and energy-intensive by som e market conunentators that com modity
increases in world supply. m anufactured Products in C hina’s k ey export prices are in a ‘super-cycle’, aigumg ứiat C hina’s
“Part o f this forecast slowdown in C hina’s

Drv Pixtures
CAROO V E 88E L FROM TO T 0N N E 8 OATE RATE CHART. TERMS

Coat Cape Kasso$.04 Richerds Bay Rotterđam 150000-10% Jul 5/20 10.00 CargHI FIO:ScLd/25000tShinc

Coal 0c8an Co«mo«,00 Rtehards Bay Rotterđam 150000-10% Jun 24/25 10.00 SwteM«ln PlC;F10:SílđữS00aS»ic

Coal Ingenlous, 99 Rkchardt Bty Rotttrdam 150000-10% Jul 15/30 10.76 CargHI FIO:Scld/2SOOOtShmc

Coal S(»amar«. (Cosco) Rlchardi Bay Tsrragone 150000-10%Ea 2006/2007 11.50 Carboex R0;Scld/240ŨŨtSh8x:7-9Caígo«B

Hvy Qratn M8S80lory.93 u s Ouir Egypt 65000-5% Jgn 25/27 27.00 ACTI R 0;10000ư 600a

VVheet&Sorghums Cyr«iía F^an. 81 u s Gulf Mombsa & D w €s S *am 3960 14:51 5930 Jul 1/10 210.36 WoridVi8ỉo

Iron Ore Eternal Brlght,81 Brazll Chlna 130000-10% Jul 20/30 17.60 Cometals FIO:ScLd/25000t

Iron Or« Kerki8.62 Tubsrao Qingdso 170000-10% Jul 10/20 19.00 Trsnsfield RC:FlO;ScL<l/25000t

Iron Ore steamer Nouadhlbou Ghem 70000-10% Jul 10/20 8.25 Sldmar FI0;4Day«

tron Ore steamer, (NYK) Cape Lambert Ymuiden 150000-10% Jul 10/17 11.25 Coru* FI0;6Day8
Scrap Pareast Sunny, 89 ECUS Marmagoa 35000-5% Jul 1/5 54.50 HugoNeu F l0 ;ix 0 0 ư 3 0 0 0 t

Timecharter CHART. TER M 8

CONSUM PTION V E 88E L FROM TO T0N N E 8 DATE RATE

14kt/30t Eđfu,97 DelSkavv Redel Portbury 71752dwt Jul 5/10 22500 Day Flame TripOutvlaVeortpil#

14W/35t Samỉohn Ubetty. 96 Del u s Guff Reúel Egyplisn Med 74761 đwt Jul 1/5 24000 Oay Carglll TfipOut-»S4SOOOOBonus

14.2kt/28.1t Konk8rí3eorgio8,97 Del Surabaya RedeUapanvìaindo 4e670dwt Jul 7/15 21500 Day GlobelBulk Tripout

13.8kt/3l.8t WadiAIArl8h.g4 Dei Kosichang Redel J8pan 64214dwt Jul 1/3 11000 Day Norden PtHedlandRd

14.5W/35.5t lranKerman»hah.Ol Del Hone Kong R«d®ITalwan 7S249dwt Jut 1/9 13000 Day Daebo IndonesiaRd

13,7W 49t Hebel Angel, 93 Del Rlzhao Redel Chlna 165133đwt Jul 5/10 23000 Day BHP-BIIHt VVAuaRd

14.5Kt/58t A ^ha Era, 00 DolB«ilun Redsl Chlna 170387dwt Jul 5/10 27500 Day BHP-Billit VVAusRd

14 kt/3 1.st Captaln Diamantls.00 Oe(Qljon R edel Fo 9 74757dwt Jul 1/3 22500 Day 0 ’Amtoo PrtoBolh/arRd

14.3kW 2t ArmiaKra]owa.91 Del So Korea Redé Stn98pora^J8 pan 73505dwt Jul 2/3 13500 Day PanOcean 3020000GmBI:NoPacRtí;DC

14.5KVSSt Sa Fortiu5, 01 Del Japan Redel Fos 17250ddwt Jul 15/20 16000 Dsy SKShipp TripOutvk8Au«&SQAfriC8

14kt/31.5t Christtna kOO Del Cap6 Passero Redel PEvtoECSoAnt 72493đwt Jun 24/26 25000 Day Oreyfu8 Trlpout

14M/52t BulkAustralla.OS DeCapePssaero Redel FEviaBfazH 170578dwt Jul 5/7 45000 Day PanOcaan Tripouí

13 SkV28t CHpperGem,90 0elJo rfL 88far RBdBl FB*ECSDAm 65619dwt Jun 21/22 25000 Day Ch-eytus 2e97000GrnBI;Trlpout

14kt/31.5t HanjinNew(^lean8.94 DelPtKelang R eM MeđvlaRichvdsBsy 70337dvirt Jun 23/24 12500 Oay Daeyang Tripout

14kư40t stefanla,81 DelTaíwan RscM SkaWPassero 61636<ỉw t Jun 29/30 9000 Day Bunge 2e40000GrnBt;TripOut

Introduction to Shipping 251

A p p e n d ix 24 Shipping Report

economic growth alone js not suffìcient demand outlook for the rest of 2005 in iron ore output is attributed to the
to sustain high prices. Abare points and into 2006 suggests that many commissỉoning of new production
out thai it is often overlooked that prices have already peaked,”the report capacity at RioTinto and BHP Billiton
China's growth is driven by demand says. Abare íorecasts that the volúme operaíons in VVestern Australia.
from the us for its cheap of Australian mine production will rise China's insatiable demanđ for
manuíactured goods. Although difficult by nearly eight per cent in 2005-6. A minerals has underpinneđ a 140%
to quantiíy, 3 signiíicant proportion o f forecasl six per cent jump ỉn the price íncrease in the 54 months to
China's consumption of minerals and output of energy minerals is sup ported May 2005. Most recent increases In
energy commodities is exported in the by production rises of oil and natural the price índex came from significant
fo rm o f m anutactu ređ Products. gás. rises in coal and iron ore prices. The
Also, a reduction in export grovvth Crude oil production will rise 17% report also predicts that the value of
for China will impede growth in because of higher output from iron ore exports will increase by 60%
manutacturing output and ínfra Santos's new 100,000 barrels-a-day to
structure development, flowing through project in Western Australia's $13Bn in 2005-6, after rising 53% in
to ređuced demand for minerals and Carnarvon Basin. 2004-5. Coking coal exports will rise
energy commodities. Higher output from the North West by 57% to $
Chỉna's economic growth đepends Shelf’s fourth LNG ừain and the start- 18.2Bn and thermal coal by 16% to
more on exports than on growth in up in 2006 of the new Darwín LNG $7.5Bn. More output from new LNG
developeđ countries, vvith exports plant wíll underpin a 17% increase in productỉon tacilit íes and hígher príces
accounting for about natural gas productìon. A10% increase will cause a 40% rise in the value of
30% of China's gross domestc product ỉn Australia's productỉon of minerals and Australia’s LNG exports
in 2003. "The current cycle may metals ỉs expected lo come mainly lo $4.5Bn. Abare predicts that
already qualify as a 'super-cycle; but from higher output of gold, iron ore prices for some commodỉties witl
the supply and and alumína. An antlcipated 10% cut farm export earnings by 2.5%,
increase to $27.2Bn.

W et Pixtures
CARG O VE SSE L FROM TO TONNES DATE RATE CHART. TER M S
Oil Dírty Angelca Schule. 05 wcus Far east 80000 Jul 1 1200000 CNR PtC;Lump Sum
Oil Dirty HellespTrader.96 st Lucia Wilhelmshaven 130000 Jui 2 W75 POVMariTtì
Oil Oiíty SK STyne.96 Tnniơad us Gu» 70000 Jul1 VV161.25 ExxorMc^Ì Part cargo
OM Dirty BeaiM th Maersk. 99 Hound Point us Gurf 280000 Jul 6 W 67 Koch Part cargo
Oil Dirty Bravery, 94 TaBtnn USAtlanticUSGulf 80000 Jul 6 W165 VH9I Part cargo
0« Dlrty Seatriumph/Rsc8r02 Novorossiysk UK/C of»nerí Međ 135000 Jul 8 W150 LukoH Part cargo
oa Dirly Mmerva Eieonora, 04 Black Sea Mediterranean 60000 Jun29 W 130 Alpine Part cargo
Oit Dirty CapeAncona.d6 Libys VVilhelmshaven 80000 Jun29 W 145 Oreytus p«rt cargo
OM Dirty E rv *e n ,0 4 Arzew Phllactolphia 130000 Jui 14 W110 Sun
Ođ Dirty Títan Glory. 00 Arzew us Gult 265000 Jul 20 W 65 Valero
Oil Dlrty Aírlcan Ruby,94 w Aírica us Atlantic 130000 Jul 13 W132 Sun
oa Dirty Bourgogne,96 WAffiC* Indonesia 260000 Jul 20 W6S v/ital
Oil Dirly Af1ene,03 MEGulf us Gulf 130000 Jul 20 w »00 Chevron
oy Dirty Loui'w8tQatar.90 R M Ĩa n u ra Cfiítt«gong 80000 JulO W 89 BSC
O i Dirty Tltan N«p(une.88 MEGulf Japan op Singapore 257500 Jul 16 W52opW 55 ExxoiM obÌ
Oil Diily Front Lilk>,91 Bushtre Far East 130000 Jul 11 W9S Arcađia
Đkty Hebei Amblion. 90 Kharg Island Chlna 260030 Jul 13 W 50 Zh«fìfong
OH Dirty Po88idonM.95 Dumsi Taíwan 80000 Jul 4 465000 CPC Lutnp Sum
Od cte sn HansSchoH.04 us Gulf ec M ex co 30000 Jun 26 270000 PMl Lump Sum
OK Clecn AlanTBitaraTB .......... USGulf UK/Contir>«nt 38000 Jun 29 W 150 BP
oy CtoBn Lion. 8S Canbbeans Continent 38000 Jun 29 W150 CNR
OM Ciean Rosetts.03 UK/Continent us Atlantic 37000 Jul 5 W265 CSSA Part cargo
01 Clesn Smoolh Hound, S9 AntRottAm8t»rđam Mediterranean 70000 Jun 2S W125 Shen
Oi Ctean S*« «x p to f*f,76 Black Sea Medtterranean 30000 Jul 1 W290 Petraco P8ft cargo
OD cte »n ElkaHercu(es.02 Mediterranean us Allantic 37000 Jul 5 W270 SlìoK
01 ctearì Mornmíi Gtory Vii.99 M £Gulf J«par> 55000 Jul 12 W 179 SKShipp Psrt C fỊO
Oil Ctean Oynamc Fjq3res& 93 sm sipor® Japan 30000 Jul 14 W 190 CNR Part cargo
OdCiean D«Qin9453,02 NingBo Ulsan 30000 Jul 7 300000 SKShlpp PtC:Iump Sum

252 Institute of Chartered Shipbrokers

 A p p en d íx 25 Hague-Visby Rules

The Hague Rules as Amended by the

Brussels Protocol 1968
Commonly reíerred to as

The Hague-Visby Rules

Article I
In these Rules the following vvords are employed, with the meanings set out below:
(a) ‘Carrier’ includes the owner or the charterer who enters into a contract of carriage with a
shipper.
(b) ‘Contract of carriage’ applies only to contracts of carrlage covered by a bill of lading or any
similar document of title, in so far as such document relates to the carriage of goods by sea,
including any bill of lading or any similar document as aíoresaid issued under or pursuant
to a charter party from the moment at vvhich such bill of lading or similar document of title
regulates the relations betvveen a carrier and a holder of the same.
(c) ‘Goods’ includes goods, vvares, merchandise, and articles of every kind vvhatsoever except
live animals and cargo vvhich by the contract of carriage is stated as being carried on deck
and is so carried.
(d) ‘Ship’ means any vessel used for the carriage of goods by sea.
(e) ‘Carriage of goods’ covers the period from the time when the goods are loaded on to the
time they are discharged from the ship.

Article II
Subject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in
relation to the loading, handling, stovvage, carriage, custody, care and discharge of such goods, shall
be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter
set forth.

Article III
1. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence
to:
(a) Make the ship seavvorthy;
(b) Properly man, equip and supply the ship:
(c) Make the holds, retrigerating and cool chambers, and all other parts of the ship in vvhich
goods are carried, fit and safe for their reception, carriage and preservation.

2. Subject to the provisions of Article IV, the carrier shall properly and careíully load, handle, stow,
carry, keep, care for, and discharge the goods carried.

3. After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on
demand of the shipper, issue to the shipper a bill of lading shovving among other things:
(a) The leading marks necessary for identiíication of the goods as the same are turnished
in vvriting by the shipper beíore the loading of such goods starts, provided such marks
are stamped or othervvise shovvn clearly upon the goods if uncovered, or on the cases or
coverings in vvhich such goods are contained, in such a manner as should ordinarily remain
legible until the end of the voyage.

Introduction to Shipping 253

 A p p e n d ix 25 Hague-Visby Rules

(b) Either the number of packages or pieces, or the quantity, or vveight, as the case may be, as
furnished in vvriting by the shipper.
(c) The apparent order and condition of the goods.

Provided that no carrier, master or agent of the carrier shall be bound to State or show in the bill
of lading any marks, number, quantity or weight which he has reasonable ground for suspecting
not accurately to represent the goods actually received, or vvhich he has had no reasonable
means of checking.

4. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein
described in accordance with paragraph 3 (a), (b ) and (c). Hovvever, proof to the contrary shall not
be admissible when the bill of lading has been transíerred to a third party acting in good faith.

5. The shipped shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment
of the marks, number, quantity and vveight, as íurnished by him, and the shipper shall indemniíy
the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such
particulars. The right of the carrier to such indemnity shall on no way limit his responsibility and
liability under the contract of carriage to any person other than the shipper.

6. Unless notice of loss or damage and the general nature of such ioss or damage be given in
vvriting to the carrier or his agent at the port of discharge betore or at the time of the removal of
the goods into the custody of the person entitled to delivery thereof under the contract of carriage,
or, if the loss or damage be not apparent, within three days, such removal shall be prima facie
evidence of the delivery by the carrier of the goods as described in the bill of lading.

The notice in vvriting need not be given if the State of the goods has, at the time of their receipt,
been the subject of joint survey or inspection.

Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all
liability vvhatsoever in respect of the goods, unless suit is brought vvithin one year of their delivery
or of the date when they should have been delivered. This period, may hovvever, be extended if
the parties so agree after the cause of actlon has arisen.

In the case of any actual or apprehended loss or damage the carrier and the receiver shall give
all reasonable íacilities to each other for inspecting and tallying the goods.

6bis. An action for indemnlty against a third person may be brought even after the expiration of the
year provided for in the preceding paragraph if brought within the time allovved by the law of
the Court seized of the case. Hovvever, the time allovved shall be not less than three months,
commencing from the day when the person bringing such action for indemnity has settled the
claim or has been served with process in the action against himselí.

7. After the goods are loaded the bill of lading to be issued by the carrier, master, or agent of the
carrier, to the shipper shall, if the shipper so demands be a ‘shipped’ bill of lading provided that if
the shipper shall have previously taken up any document of title to such goods, he shall surrender
the sam e as against the issue of the ‘shipped’ bill of lading, but at the option of the carrier such
documení of title may be noted at the port of shipment by the carrier, master, or agent with the
name or names of the ship or ships upon vvhich the goods have been shipped and the date or
dates of shipment, and when so noted, if it shovvs the particulars mentioned in paragraph 3 of
Article III, shall for the purpose of this article be deemed to constitute a ‘shipped’ bill of lading.

8. Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from
liability for loss or damage to, or in connection with goods arising from negligence, fault, or íailure
in the duties and obligations provided in this article or lessening such liability othervvise than as
provided in these Rules, shall be null and void and of no effect. A beneíit of Insurance in tavour
of the carrier or similar clause shall be deemed to be a clause relieving the carrier from liability.

254 Institute o f Chartered Shipbrokers

 A p p en d ix 25 Hague-Visby Rules

^rticle IV
I. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from
unseavvorthiness unless caused by want of due diligence on the part of the carrier to make the
ship seavvorthy, and to secure that the ship is properly manned, equipped and supplied, and
to make the holds, retrigerating and cool chambers and all other parts of the ships in which
goods are carried fit and safe for their reception, carriage and preservation in accordance
with the provisions of paragraph 1 of Article III. VVhenever loss or damage has resulted from
unseavvorthiness the burden of proving the exerclse of due diligence shall be on the carrier or
other person claiming exemption under this article.

l. Neither the carrier nor she ship shall be responsible for loss or damage arising or resulting
from:
(a) Act, neglect, or deíault of the master, mariner pilot, or the servants of the carrier in the
navigation or in the management of the ship.
(b) Fire, unless caused by the actual fault or privity of the carrier.
(c) Perils, dangers and accidents of the sea or other navigable vvaters.
(d) Act of God.
(e) Act of war.
(f) Act of public enemies.
(g) Arrest or restraint of prlnces, rulers or people, or seizure under legal process.
(h) Quarantine restrictions.
(i) Act or omission of the shipper or ovvner of the goods, his agent or representative.
(j) Strikes or lockouts or stoppage or restraint of labour from vvhatever cause, vvhether partial
or general.
(k) Riots and civil commotions.
(I) Saving of attempting to save life or property at sea.
(m) VVastage in bulk of vveight or any other loss or dam age arising from inherent detect, quality
or vice of the goods.
(n) lnsufficiency of packing.
(o) lnsufficiency of inadequacy of marks.
(p) Latent deíects not discoverable by due diligence.
(q) Any other cause arising vvithout the actual fault or privity of the carrier, or vvithout the fault
or neglect of the agents or servants of the carrier, but the burden of proof shall be on the
person claiming the benetit of this exception to show that neither the actual fault or privity
of the carrier nor the fault of neglect of the agents or servants of the carrier contributed to
the loss or damage.

3. The shipped shall not be responsible for loss or dam age sustained by the carrier or the ship
arising or resulting from any cause vvithout the act, fault or neglect of the shipper, his agents or
his servants.

ị. Any deviation in saving or attempting to save life or property at sea or any reasonable deviation
shall not be deemed to be an iníringement or breach of these Rules or of the contract of carriage,
and the carrier shall not be liable for any loss or dam age resulting thereírom.

5. (a) Unless the nature and value of such goods have been declared by the shipper betore
shipment and inserted in the bill of lading, neither the carriage nor the ship shall in any
event be or become liable for any loss or dam age to or in connection with the goods in an
amount exceeding the equivalent of 666.67 units of account per package or unit or 2 units
of account per kilo of gross vveight of the goods lost or damaged, vvhichever is the higher.

Introduction to Shipping 255

 A p p e n d ix 25 Hague-Visby Rules

(b) The total amount recoverable shall be calculated by reíerence to the value of such goods
at the place and time at vvhich the goods are discharged from the ship in accordance with
the contract or should have been so discharged.
The value of the goods shall be fixed accordingly to the commodity exchange price, or, if
there be no such price, according to the current market price, or, if there be no commodity
price or current market price, by reíerence to the normal value of goods of the same kind
and quality.
(c) VVhere a C o n ta in e r, pallet or similar article of transport is used to consolidate goods, the
number of packages or units enumerated in the bill of lading as packed in such article
of transport shall be deemed the number of packages or units for the purpose of this
paragraph as far as these packages or units are concerned. Except as aíoresaid such
article of transport shall be considered the package or unit.
(d) The unit of account mentioned in this Article is the special dravving right as deíined by
the International Monetary Fund. The amounts mentioned in h_visby/art/art/04_5a sub-
paragraph (a) of this paragraph shall be converted into national curréncy on the basis of
the value of that currency on a date to be determined by the law of the Court sized of the
case.
(e) Neither the carrier nor the ship shall be entitled to the beneíit of the limitation of liability
provided for in this paragraph if it is proved that the damage resulted from an act or omission
of the carrier done with intent to cause damage, or recklessly and with knovvledge that
dam age would probably result.
(f) The declaration mentioned in sub-paragraph (a) of this paragraph, if embodied in the
bill of lading, shall be prima facie evidence, but shall not be binding or conclusive on the
carrier.
(g) By agreement betvveen the carrier, master or agent of the carrier and the shipper other
maximum amounts than those mentioned in sub-paragraph (a) of this paragraph may
be fixed, provided that no maximum amount so fixed shall be less than the appropriate
maximum mentioned in that sub-paragraph.
(h) Neither the carrier nor the ship shall be responsible in any event for loss or damage to, or
in connection with, goods if the nature or value thereoí has been knowingly mis-stated by
the shipper in the bill of lading.

6. Goods of an inílammable, explosive or dangerous nature to the shipment whereof the

carrier, master or agent of the carrier has not consented with knovvledge of their nature
and character, may at any time before discharge be landed at any place, or destroyed or
rendered innocuous by the carrier vvithout compensation and the shipper of such goods shall
be liable for all dam ages and expenses directly of indirectly arising out of or resulting from
such shipment. If any such goods shipped with such knovvledge and consent shall become
a danger to the ship or cargo, they may in like m anner be landed at any place, or destroyed
or rendered innocuous by the carrier without the liability on the part of the carrier except to
general average, if any.

Article IV bis
1. The defences and limits of liability provided for in these Rules shall apply in any action against
the carrier in respect of loss or damage to goods covered by a contract of carriage vvhether the
action be tounded in contract or in tort.

2. If such an action is brought against a servant or agent of the carrier (such servant or agent
not being an independent contractor), such servant or agent shall be entitled to avail himself
of the detences and limits of liability vvhich the carrier is entitled to invoke under these
Rules.

3. The aggregate of the amounts recoverable from the carrier, and such servants and agents, shall
in no case excel the limit provided for in these Rules.

256 Institute of Chartered Shipbrokers

 A p p en d ix 25 Hague-Visby Rules

4. Nevertheless, a servant or agent of the carrier shall not be entitled to avail himself of the provisions
of this article, if it is proved that the damage resulted from an act or omission of the servant or
agent done with intent to cause damage or recklessly and with knovvledge that dam age vvould
probably result.

Article V
A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or
to increase any of his responsibilities and obligations under these Rules, provided such surrender or
increase shall be embodied in the bill of lading issued to the shipper. The provisions of these Rules
shall not be applicable to charter parties, but if bills of lading are issued in the case of a ship under
a charter party they shall comply with the terms of these Rules. Nothing in these Rules shall be held
to prevent the insertion in a bill of lading of any lawful provision regarding general average.

Article VI
Notvvithstanding the provisions of the preceding articles, a carrier, master or agent of the carrier
and a shipper shall in regard to any particular goods be at liberty to enter into any agreem ent in
any terms as to the responsibility and liability of the carrier for such goods, and as to the rights and
immunities of the carrier in respect of such goods, or his obligation as to seavvorthiness, so far as this
stipulation is not contrary to public policy, or the care or diligence of his servants or agents in regard
to the loading, handling, stowage, carriage, custody, care and discharge of the gods carried by sea,
provided that in this case no bill of lading has been or shall be issued and that the terms agreed shall
be embodied in a receipt which shall be a non-negotiable document and shall marked as such.

An agreem ent so entered into shall have full legal effect.

Provided that this article shall not apply to ordinary commercial shipments made in the ordinary
course of trade, but only to other shipments vvhere the character or condition of the property to be
carried or the circumstances, terms and conditions under vvhich the carriage is to be períormed are
such as reasonably to justify a special agreement.

Article VII
Nothing herein contained shall prevent a carrier or a shipper from entering into any agreement,
stipulation, condition, reservation or exemption as to the responsibility and reliability of the carrier
or the ship for the loss or damage to, or in connection with, the custody and care and handling of
goods prior to the loading on, and subsequent to the discharge from, the ship on which the goods
are carried by sea.

Article VIII
The provisions of these Rules shall not affect the rights and obligations of the carrier under any
statute for the time being in force relating to the limitation of the liability of ovvners of sea-going
vessels.

Artìcle IX
These Rules shall not affect the provisions of any international Convention or national law governing
liability for nuclear damage.

Article X
The provisions of these Rules shall apply to every bill of lading relating to the carriage of goods
betvveen ports in two different States if;
(a) the bill of lading is issued in a contracting State, or
(b) the carriage is from a port in a contracting State, or
(c) the contract contained in or evidenced by the bill of lading provides that these Rules or
legislation of any State giving effect to them are to govern the contract;

Introduction to Shipping 257

 A p p e n d ix 25 Hague-Visby Rules

vvhatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other
interested person.

(The last two paragraphs of this Article are not reproduced. They require contracting States to apply
the Rules to bills of lading mentioned in the Article and authorise them to apply the Rules to other
bills of lading).

(Article 11 to 16 of the International Convention for the uniíication of certain rules of law relating to
bills of lading signed at Brussels on August 25, 1974 are not reproduced. They deal with the coming
into force of the Convention, procedure for ratiíication, accession and denunciation and the rlght to
call for a fresh conference to consider amendments to the Rules contained In the Convention).

258 Institute o f Chartered Shipbrokers

 A p p en d ix 26 Clause Paramount

The International Convention for the Uniíication of Certain Rules of Law relating to Bills of Lading
signed at Brussels on 25 August 1925 (“the Hague Rules”) as amended by the Protocol signed at
Brussels on 23 Pebruary 1968 (“the Hague-Visby Rules”) and as enacted in the country of shipment
shall apply to this contract. When the Hague-Visby are not enacted in the country of shipment,
the corresponding legislation of the country of destination shall apply, irrespective of whether such
legislation may only regulate outbound shipments.

W hen there is no enactment of the Hague-Visby Rules in either the country of shipment or in the
country of destination, the Hague-Visby Rules shall apply to this contract save vvhere the Hague
Rules as enacted in the country of shipment or if no such enactment is in place, the Hague Rules as
enacted in the country of destination apply compulsorlly to this Contract.

The Protocol signed in Brussels on 21 Decem ber 1979 (“the S D R Protocol 1979”) shall apply vvhere
the Hague-Visby Rules apply, vvhether mandatorily or by the Contract.

The Carrier shall in no case be responsible for loss or damage to cargo arising prior to loading, after
discharging, or vvhile the cargo is in the charge of another carrier, or with respect to deck cargo and
live animals.

Introduction to Shipping 259

A p pendix 26 Clause Paramount

260 Institute of Chartered Shipbrokers

 A p p en d ix 27 Nevv Jason Clause

In the event of accident, danger, dam age or disaster beíore or after commencement of the voyage,
resulting from any cause vvhatsoever, vvhether due to negiigence or not, for vvhich, or for the
consequences of which, the carrier is not responsible. By statute, contract or othervvise, the goods,
shippers, consignees or ovvners of the goods shall contribute with the carrier in general average to
the payment of any sacrifice, losses or expenses of a general average nature that may be made or
incurred, and shall pay salvage and special charges incurred in respect of the goods.

If a salving ship is owned or operated by the carriers, the salvage shall be paid for as fully as if such
salving ship or ships belonged to strangers. Such deposit as the carrier or his agents may deem
sufficient to cover the estimated contribution of the goods, and any salvage and special charges
thereon shall, if required, be made by the goods, shippers, consignees or ovvners of the goods to the
carrier betore delivery.

Introduction to Shipping 261

A p p en d ix 27 New Jason Clause

262 Institute o f Chartered Shipbrokers

 A p p e n d ix 28 Both to Blame Collision Clause

lf the ship comes into collision with another ship as a result of the negligence of the other ship and
any act, neglect or deíault of the master mariner, pilot or the servants of the carrier in the navigation
or in the m anagement of the ship, the owners of the goods carried hereunder will indemniíy the
carrier against all loss or liability to the other non-carrying ship or her ovvners in so far as such
loss or liability represents loss of, or damage to, or any claim vvhatsoever of the ovvners of the said
goods, paid or payable by the other non-carrying ship or her ovvners as part of their claim against
the carrying ship or carrier.

The foregoing provisions shall also apply where the ovvners, operators or those in charge of any ship
or ships or objects other than, or in addition to, the colliding ships or objects are the fault in respect
to a collision or contract. Appendix 10:6.

Introduction to Shipping 263

A p p en d ix 28 Both to Blame Collision Clause

264 Institute of Chartered Shipbrokers

 A p p en d íx 29 VVar Risks Clause

BIMCO Standard War Risks Clause for Voyage Chartering, 1993 Code Name: “Voyvvar 1993”
For the purpose of this Clause, the vvords: (4) lfatan ysta ge o fth e vo yag e attertheloading o íthecargocom m ences it
appears that, in the reasonable iudgement of the Master and/or the
(a) “Ovvner” shall include the shipovvners, bareboat charterers,
Ovvners, the Vessel, her cargo, crew or other persons on board the
disponent owners, managers or other operators who are charged with
Vessel may be. or are likely to be, exposed to War R isks on any part
the management of the Vessel, and the Master; and
of the route (including any canal or waterway) which is normally and
(b) “War Risks" shall include any war (whether actual or threatened), customaríly used in a voyage of the nature contracted for, and there
act of war, civil war, hostilities, revolution, rebellion, civil commotion, is another longer route to the discharging port, the Owners shall give
vvarlike operations, the laying of mines (vvhether actual or reported), notice to the Charterers that this route will be taken. In this event
acts of piracy, acts of terrorists, acts of hostility or malicious damage, the Ovvners shal Ibe entitled, if the total extra distance exceeds
blockades (whether imposed against all vessels or imposed 100 miles to additional íreight which shall be the sam e percentage of
selectively against ve ssels of certain flags or ovvnership, or against the treight contracted for as the percentage which the extra distance
certain cargoes or crews or otherwise hovvsoever), by any person, represents to the distance of the normal and custom ary route.
body, terrorist or political group, or the Government of any State
(5) The Vessel shall have liberty:
whatsoever, vvhich, in the reasonable judgement of the Master and/
or the Ovvners, may be dangerous or are likely to be or to become (a) to comply with all orders, direotions, recommendations or advice
dangerous to the Vessei, her cargo, crew or other persons on board as to departure, arrival, routes, sailing in convoy, ports of call,
the Vessel. stoppages, destinations, discharge of cargo, delivery or in any way
whatsoever which are given by the Government of the Nation under
If at any time beíore the Vessel com m ences loading, it appears
that, in the reasonable judgement of the Master and/or the Ovvners, vvhose flag the Vessel sails, or other Government to whose laws the
Ovvners are subject, or any other Government which so requires, or
pertormance of the Contract of Carriage, or any part of it, may
any body or group acting with the power to compel compliance with
expose, or is likely to expose, the Vessel, her cargo, crew or other
persons on board the Vessel to War Risks, the Ovvners may give their orders or directions;
notice to the Charterers cancelling this Contract of Carriage, or (b) to comply with the orders, directions or recommendations of any
may refuse to form such part of it as may expose, or may be likely war risks underwriters who have the authority to give the same under
to expose, the Vessel, her cargo, crew or other persons on board the terms of the war risks insuranoe;
the V e ssel to War R isks; provided always that if this Contracl of
(c) to comply with the terms of any resolution of the Security Council
C arria ge provides that loading or discharging is to take place vvithin
of the United Nations, and directives of the European Community.
a range of ports, and atthe portor ports nominated by the Charterers
the effective orders of any other Supranational body vvhich has the
the Vessel, her cargo,, crew, or other persons onboard the Vessel
right to issue and give the same, and wíth national laws aimed at
m ay be exposed, or may be likely to be exposed, to War Risks,
eníorcing the sam e to which the Ovvners are subject, and to obey
the Ovvners shall first require the Charterers to nominate any other
the orders and directions of those who are charged with their
safe port which lies within the range for loading or discharging, and
enforcement;
may only cancel this Contract of Carriage if the Charterers shall not
have nominated such safe port or ports within 48 hours of receipt of (d) to discharge at any other port any cargo or partthereoí vvhich may
notice of such requirement. render the Vessel liable to coníiscation as a contraband carrier;
The Ovvners shall not be required to continue to load cargo for any (e) to call at any other port lo change the crew or any part thereof or
voyage, or to sign Bills of Lading for any port or place, or to proceed other persons on board the Vessel when there is reason to believe
or continue on any voyage, or on any parl thereoí, or to proceed that they may be subject to internment, imprisonment or other
through any canal or waterway, or to proceed lo or remain at any sanctions;
port or place vvhatsoever, vvhere it appears, either atter the loading of
(f) where cargo has been loaded or has been discharged by the
the cargo commences, or any stage of the voyage thereatter beíore
Ovvners under any provisions of this Clause, to load other cargo for the
the discharge of the cargo is completed, that, in the reasonable
Owners' own behalf and carry it to any other port or ports vvhatsoever,
iudgement of the Master and/or the Owners, the Vessel, her cargo
vvhether backvvards or forwards or in a contrary direction to the ordinary
(or any part thereoí), crew or other persons on board the Vessel (or
or customary route.
any one or all of them) may be, or are likely to be, exposed to War
Risks. If it should so appear, the Ovvners may by notice request the (6) lf in compliance with any of the provisions of sub-clauses (2) to (5) of
Charters to nominate a safe port for the discharge of the cargo or any this C lause anything is done or not done, suoh shall not be deemed
part thereof, and if within 48 hours of the receipt of such notice, Ihe to be a deviation, but shall be considered a s due fulfilment of the
Charterers shall not have nominated such a port, the Owners may Contract of Carriage.
discharge the cargo at any safe port of their choice (including the
port of loading) in complete fulfillment of the Contract of Carriage.
The Ovvners shall be entitled to recover from the Charterers the extra
expenses of such discharge and, if the discharge takes place at any
port other than the loading port, to receive the full íreight as though
the cargo had been carried to the discharging port and if the extra
distance exceeds 100 miles, to additional íreight which shall be the
sam e percentage of the íreight contracted for as the percentage
which Ihe extra distance represents to the distance of the normal
and customary route, the Owners having a lien on the cargo for such
expenses and freight.

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United Nations Convention on the Carriage of

Goods bySea (1978)
Hamburg Rules
PREAMBLE
THE STATES PARTIES TO TH IS CO NVENTIO N,

HAVING RECOGNIIED the desirability of determining by agreement certain rules relating to the
carriage of goods by sea,

HAVING DECIDED to conclude a convention for this purpose and have thereto agreed as follows;

PART I. GENERAL PROVISIONS

A rtic le 1. D e tin itio n s

In this Convention:
1. “Carrier” means any person by whom or in vvhose name a contract of carriage of goods by sea
has been concluded with a shipper.

2. “Actual carrier” means any person to whom the pertormance of the carriage of the goods, or of
part of the carriage, has been entrusted by the carrier, and includes any other person to whom
such pertormance has been entrusted.

3. “Shipper” means any person by whom or in vvhose name or on vvhose behalf a contract of
carriage of goods by sea has been concluded with a carrier, or any person by whom or in whose
name or on vvhose behalt the goods are actually delivered to the carrier in relation to the contract
of carriage by sea.

4. “Consignee" means the person entitled to take delivery of the goods.

5. “Goods” includes live animals; where the goods are Consolidated in a Container, pallet or similar
article of transport or vvhere they are packed, goods includes such article of transport or packaging
if supplied by the shipper.

6. “Contract of carriage by sea” means any contract vvhereby the carrier undertakes against
payment of íreight to carry goods by sea from one port to another; hovvever, a contract vvhich
involves carriage by sea and also carriage by some other means is deemed to be a contract of
carriage by sea for the purposes of this Convention only in so far as it relates to the carriage
by sea.

7. “Bill of lading” means a document vvhich evidences a contract of carriage by sea and the
taking over or loading of the goods by the carrier, and by vvhich 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.

8. “VVriting” includes, inter alia, telegram and telex.

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Article 2. Scope o f application

1. The provisions of this Convention are applicable to all contracts of carriage by sea betvveen two
different States, if:
(a) the port of loading as provided for in the contract of carriage by sea is located in a Contracting
State, or

(b) the port of discharge as provided for in the contract of carriage by sea is located in a
Contracting State, or

(c) one of the optional ports of discharge provided for in the contract of carriage by sea is the
actual port of discharge and such port is located in a Contracting State, or

(d) the bill of lading or other document evidencing the contract of carriage by sea is issued in
a Contracting State, or

(e) the bill of lading or other document evidencing the contract of carriage by sea provides that
the provisions of this Convention or the legislation of any State giving effect to them are to
govérn the contract.

2. The provisions of this Convention are applicable without regard to the nationality of the ship, the
carrier, the actual carrier, the shipper, the consignee or any other interested person.

3. The provisions of this Convention are not applicable to charter-parties. Hovvever, vvhere a bill of
lading is issued pursuant to a charter-party, the provisions of the Convention apply to such a bill
of lading if it governs the relation betvveen the carrier and the holder of the bill of lading, not being
the charíerer

4. If a contract provides for tuture carriage of goods in a series of shipments during an agreed
period, the provisions of this Convention apply to each shipment. Hovvever, where a shipment is
made under a charter-party, the provisions of paragraph 3 of this article apply.

Article 3. Interpretation o f the Convention

In the interpretation and application of the provisions of this Convention regard shall be had to its
international character and to the need to promote uniíormity.

PART II. LIABILITY 0F THE CARRIER

Article 4. Period o f responsibility
1. The responsibility of the carrìer for the goods under this Convention covers the period during
vvhich the carrier is in charge of the goods at the port of loading, during the carriage and at the
port of discharge.

2. For the purpose of paragraph 1 of this article, the carrier is deemed to be in charge of the goods
(a) from the time he has taken over the goods from;
(i) the shipper, or a person acting on his behalí; or
(ii) an authority or other third party to whom, pursuant to law or regulations applicable at the
port of loading, the goods must be handed over for shipment;
(b) until the time he has delivered the goods:
(i) by handing over the goods to the consignee; or
(ii) in cases vvhere the consignee does not receive the goods íronri the carrier, by placing
them at the disposal of the consignee in accordance with the contract or with the law or
with the usage of the particular trade, applicable at the port of discharge; or
(iii) by handing over the goods to an authority or other third party to whom, pursuant to law
or regulations applicable at the port of discharge, the goods must be handed over.

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In paragraphs 1 and 2 of this article, reterence to the carrier or to the consignee means, in
addition to the carrier or the consignee, the servants or agents, respectively of the carrier or the
consignee.

Article 5. Basis otliability

The carrier is liable for loss resulting from loss of or damage to the goods, as well as from
delay in delivery, if the occurrence which caused the loss, damage or delay took place vvhile the
goods were in his charge as detined in article 4, unless the carrier proves that he, his servants
or agents took ali measures that could reasonably be required to avold the occurrence and its
consequences.

Delay in delivery occurs when the goods have not been delivered at the port of discharge provided
for in the contract of carriage by sea vvithin the time expressly agreed upon or, in the absence
of such agreement, vvithin the time vvhich it vvould be reasonable to require of a diligent carrier,
having regard to the circumstances of the case.

The person entitled to make a claim for the loss of goods may treat the goods as lost if they have
not been delivered as required by article 4 vvithin 60 consecutive days following the explry of the
time for delivery according to paragraph 2 of this article.

(a) The carrier is liable

(i) for loss of or damage to the goods or delay in delivery caused by fire, if the claimant
proves that the fire arose from fault or neglect on the part of the carrier, his servants or
agents;
(ii) for such loss, damage or delay in delivery which is proved by the claimant to have
resulted from the fault or neglect of the carrier, his servants or agents in taking all
measures that could reasonably be required to put out the fire and avoid or mitigate its
consequences.

(b) In case of fire on board the ship affecting the goods, if the claimant or the carrier so
desires, a survey in accordance with shipping practices must be held into the cause and
circumstances of the fire, and a copy of the surveyors report shall be made available on
demand to the carrier and the claimant.

With respect to live animals, the carrier is not liable for loss, damage or delay in delivery resulting
from any special risks inherent in that kind of carriage. If the carrier proves that he has complied
with any special instructions given to him by the shipper respecting the animals and that, in the
circumstances of the case, the loss, damage or delay in delivery could be attributed to such
risks, it is presumed that the loss, damage or delay in delivery was so caused, unless there is
proof that all or a part of the loss, damage or delay in delivery resulted from fault or neglect on
the part of the carrier, his servants or agents.

The carrier is not liable, except in general average, where loss, damage or delay in delivery
resulted from measures to save life or from reasonable measures to save property at sea.

Where fault or neglect on the part of the carrier, his servants or agents combines with another
cause to produce loss, damage or delay in delivery, the carrier is liable only to the extent that the
loss, damage or delay in delivery is attributable to such fault or neglect, provided that the carrier
proves the amount of the loss, damage or delay in delivery not attributable thereto.

Article 6. Limits otliability

(a) The liability of the carrier for loss resulting from loss of or damage to goods according to
the provisions of article 5 is limited to an amount equivalent to 835 units of account per
package or other shipping unit or 2.5 units of account per kilogram of gross weight of the
goods lost or damaged, vvhichever is the higher.
(b) The liability of the carrier for delay in delivery according to the provisions of article 5 is

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limited to an amount equivalent to two and a half times the íreight payable for the goods
delayed, but not exceeding the total freight payable under the contract of carriage of goods
by sea.

ịc) In no case shall the aggregate liability of the carrier, under both subparagraphs (a) and (b)
of this paragraph, exceed the limitation vvhich would be established under subparagraph
(a) of this paragraph for total loss of the goods with respect to vvhich such liability was
incurred.

2. For the purpose of calculating vvhich amount is the higher in accordance with paragraph 1 (a) of
this article, the following rules apply:
(a) VVhere a Container, pallet or similar article of transport is used to consolidate goods, the
package or other shipping units enumerated in the bill of lading, if issued, or othervvise in
any other document evidencing the contract of carriage by sea, as packed in such article of
transport are deemed packages or shipping units. Except as atoresaid the goods in such
article of transport are deemed one shipping unit.

(b) In cases where the article of transport itselt has been lost or damaged, that article of
transport, if not ovvned or othervvise supplied by the carrier, is considered one separate
shipping unit.

3. Unit of account means the unit of account mentioned in article 26.

4. By agreement betvveen the carrier and the shipper, limits of liability exceeding those provided for
in paragraph 1 may be fixed.

Aiiicle ĩ. Application to non-contractual claims

1. The deíences and limits of liability provided for in this Convention apply in any action against the
carrier in respect of loss of or damage to the goods covered by the contract of carriage by sea,
as well as of delay in delivery vvhether the action is íounded in contract, in tort or othervvise.

2. If such an action is brought against a servant or agent of the carrier, such servant or agent, if
he proves that he acted vvithin the scope of his employment, is entitled to avail himselt of the
deíences and limits of liability vvhich the carrier is entitled to invoke under this Convention.

3. Except as provided in article 8, the aggregate of the amounts recoverable from the carrier and
from any persons reterred to in paragraph 2 of this article shall not exceed the limits of liability
provided for in this Convention.

Article 8. Loss o ỉ right to limit responsibility

1. The carrier is not entitled to the beneíit of the limitatlon of liability provided for in article 6 if it is
proved that the loss, damage or delay in delivery resulted from an act or omission of the carrier
done with the intent to cause such loss, damage or delay, or recklessly and with knovvledge that
such loss, damage or delay would probablỵ result.

2. Notvvithstanding the provisions of paragraph 2 of article 7, a servant or agent of the carrier is not
entitled to the benefit of the limitation of liability provided for in article 6 if it is proved that the loss,
damage or delay in delivery resulted from an act or omission of such servant or agent, done with
the intent to cause such loss, damage or delay, or recklessly and with knovvledge that such loss,
damage or delay would probably result.

Article 9. Deck cargo

1. The carrier is entitled to carry the goods on deck only if such carriage is in accordance with an
agreement with the shipper or with the usage of the particular trade or is required by statutory
rules or regulations.

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lf the carrier and the shipper have agreed that the goods shall or may be carried on deck, the
carrier must insert in the bill of lading or other document evidencing the contract of carriage by
sea a statement to that effect. In the absence of such a statement the carrier has the burden of
proving that an agreement for carriage on deck has been entered into; hovvever, the carrier is
not entitled to invoke such an agreement against a third party, including a consignee, who has
acquired the bill of lading in good faith.

Where the goods have been carried on deck contrary to the provisions of paragraph 1 of this
article or vvhere the carrier may not under paragraph 2 of this article invoke an agreement for
carriage on deck, the carrier, notvvithstanding the provisions of paragraph 1 of article 5, is liable for
loss of or damage to the goods, as well as for delay in delivery, resulting solely from the carriage
on deck, and the extent of his liability is to be determined in accordance with the provisions of
article 6 or article 8 of this Convention, as the case may be.

Carriage of goods on deck contrary to express agreement for carriage under deck is deemed to
be an act or omission of the carrier within the meaning of article 8.

Article 10. Liability o f the carrier and actual carríer

VVhere the períormance of the carriage or part thereoí has been entrusted to an actual carrier,
vvhether or not in pursuance of a liberty under the contract of carriage by sea to do so, the
carrier nevertheless remains responsible for the entire carriage according to the provisions of
this Convention. The carrier is responsible, in relation to the carriage pertormed by the actual
carrier, for the acts and omissions of the actual carrier and of his servants and agents acting
vvithin the scope of their employment.

All the provisions of this Convention governing the responsibility of the carrier also apply to the
responsibility of the actual carrieríorthe carriage pertormed by him. The provisions of paragraphs
2 and 3 of article 7 and of paragraph 2 of article 8 apply if an action is brought against a servant
or agent of the actual carrier.

Any special agreement under vvhich the carrier assumes obligations not imposed by this Convention
or vvaives rights conterred by this Convention affects the actual carrier only if agreed to by him
expressly and in vvriting. VVhether or not the actual carrier has so agreed, the carrier nevertheless
remains bound by the obligations or vvaivers resulting from such special agreement.

VVhere and to the extent that both the carrier and the actual carrier are liable, their liability is joint
and several.

The aggregate of the amounts recoverable from the carrier, the actual carrier and their servants
and agents shall not exceed the limits of liability provided for in this Convention.

Nothing in this article shall prejudice any right of recourse as betvveen the carrier and the actual
carrier.

Article 11. Through carriage

Notvvithstanding the provisions of paragraph 1 of article 10, where a contract of carriage by
sea provides explicitly that a speciíied part of the carriage covered by the said contract is to
be períormed by a named person other than the carrier, the contract may also provide that the
carrier is not liable for loss, damage or delay in delivery caused by an occurrence vvhich takes
place vvhile the goods are in the charge of the actual carrier during such part of the carriage.
Nevertheless, any stipulation limiting or excluding such liability is vvithout effect if no judicial
proceedings can be instituted against the actual carrier in a court competent under paragraph
1 or 2 of article 21. The burden of proving that any loss, damage or delay in delivery has been
caused by such an occurrence rests upon the carrier.

The actual carrier is responsible in accordance with the provisions of paragraph 2 of article 10 for
loss, damage or delay in delivery caused by an occurrence which takes place while the goods
are in his charge.

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PART III. LIABILITY 0 F THE SHIPPERS

Article 12. General ru le

The shipper is not liable for loss sustained by the carrier or the actual carrier, or for damage sustained
by the ship, unless such loss or damage was caused by the fault or neglect of the shipper, his servants
or agents. Nor is any servant or agent of the shipper liable for such loss or damage unless the loss or
damage was caused by fault or neglect on his part.

Article 13. Special rules on dangerous goods

1. The shipper must mark or label in a suitable manner dangerous goods as dangerous.

2. VVhere the shipper hands over dangerous goods to the carrier or an actual carrier, as the case
may be, the shipper must inform him of the dangerous character of the goods and, if necessary,
of the precautions to be taken. If the shipper fails to do so and such carrier or actual carrier does
not otherwise have knovvledge of their dangerous character:
(a) the shipper is liable to the carrier and any actual carrier for the loss resulting from the
shipment of such goods, and
(b) the goods may at any time be unloaded, destroyed or rendered innocuous, as the
circumstances may require, vvithout payment of compensation.

3. The provisions of paragraph 2 of this article may not be invoked by any person if during the
carriage he has taken the goods in his charge with knovvledge of their dangerous character.

4. If, in cases where the provisions of paragraph 2, subparagraph (b), of this article do not apply
or may not be invoked, dangerous goods become an actual danger to life or property, they
may be unloaded, destroyed or rendered innocuous, as the circumstances may require, vvithout
payment of compensation except vvhere there is an obligation to contribute in general average
or vvhere the carrier is liable in accordance with the provisions of article 5.

PART IV. TRANSPORT DOCUMENTS

Article 14. Issue o f bill of lading

1. When the carrier or the actual carrier takes the goods in his charge, the carrier must, on demand
of the shipper, issue to the shipper a bill of tading.

2. The biil of lading may be signed by a person having authority from the carrier. A bill of lading
signed by the master of the ship carrying the goods is deemed to have been signed on behalí of
the carrier.

3. The signature on the bill of lading may be in handvvriting, printed in íacsimile, períorated, stamped,
in symbols, or made by any other mechanical or electronic means, if not inconsistent with the law
of the country where the bill of lading is issued.

Article 15. Contents o f bill o f lading

1. The bilỉ of lading must include, interalia, the following particulars:

(a) the general nature of the goods, the leading marks necessary for identiílcation of the
goods, an express statement, if applicable, as to the dangerous character of the goods,
the number of packages or pieces, and the vveight of the goodsor their quantity otherwise
expressed, all such particulars as íurnished by the shipper;
(b) the apparent condition of the goods;
(c) the name and principal place of business of the carrier;
(d) the name of the shipper;

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(e) the consignee if named by the shipper;

(f) the port of loading under the contract of carriage by sea and the date on which the goods
were taken over by the carrier at the port of loading:
(g) the port of discharge under the contract of carriage by sea;
(h) the number of originals of the bill of lading, if more than one;
(i) the place of issuance of the bill of lading;
(j) the signature of the carrier or a person acting on his behalf;
(k) the treight to the extent payable by the consignee or other indication that íreight is payable
by him;
(I) the statement reterred to in paragraph 3 of article 23;
(m) the statement, if applicable, that the goods shall or may be carried on deck;
(n) the date or the period of delivery of the goods at the port of discharge if expressly agreed
upon between the parties; and
(o) any increased limit or limits of liability vvhere agreed in accordance with paragraph 4 of
article 6.

After the goods have been loaded on board, if the shipper so demands, the carrier must issue to
the shipper a “shipped” bill of lading vvhich, in addition to the particulars required under paragraph
1 of this article, must State that the goods are on board a named ship or ships, and the date
or dates of loading. If the carrier has previously issued to the shipper a bill of lading or other
document of title with respect to any of such goods, on request of the carrier the shipper must
surrender such document in exchange for a “shipped” bill of lading. The carrier may amend any
previously issued document in order to meet the shippers demand for a “shipped” bill of lading if,
as amended, such document includes all the iníormation required to be contained in a “shipped”
bill of lading.

The absence in the bill of lading of one or more particulars reíerred to in this article does not
affect the legal character of the document as a bill of lading provided that it nevertheless meets
the requirements set out in paragraph 7 of article 1.

Article 16. Bills of lading: reservations and evidentiary effect

lf the bill of lading contains particulars concerning the general nature, leading marks, number
of packages of pieces, vveight or quantity of the goods vvhich the carrier or other person issuing
the bill of lading on his behalt knovvs or has reasonable grounds to suspect do not accurately
represent the goods actually taken over or, vvhere a “shipped” bill of lading is issued, loaded, or if
he had no reasonable means of checking such particulars, the carrier or such other person must
insert in the bill of lading a reservation specifying these inaccuracies, grounds of suspicion or the
absence of reasonable means of checking.

If the carrier or other person issuing the bill of lading on his behalí fails to note on the bill of lading
the apparent condition of the goods, he is deemed to have noted on the bill of lading that the
goods were in apparent good condition.

Except for particulars in respect of vvhich and to the extent to which a reservation permitted
under paragraph 1 of this article has been entered:
(a) the bill of lading is prima facie evidence of the taking over or, where a “shipped” bill of lading
is issued, loading, by the carrier of the goods as described in the bill of lading; and

(b) proof to the contrary by the earner is not admissible if the bill of lading has been transíerred
to a third party, including a consignee, who in good faith has acted in reliance on the
description of the goods therein.

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4. A bill of lading which does not, as provided in paragraph 1, subparagraph (k), of article 15, set
forth the íreight or othervvise indicate that íreight is payable by the consignee or does not set
forth demurrage incurred at the port of loading payable by the consignee, is prima facie evidence
that no íreight or such demurrage is payable by him. Hovvever, proof to the contrary by the
carrier is not admissible when the bill of lading has been transíerred to a third party, including a
consignee, who in good faith has acted in reliance on the absence in the bill of lading of any such
indication.

Article 17. Guarantees by the shipper

1. The shipper is deemed to have guaranteed to the carrier the accuracy of particulars relating to
the general nature of the goods, their marks, number, vveight and quantity as furnished by him
for insertion in the bill of lading. The shipper must indemnify the carrier against the loss resulting
from inaccuracies in such particulars. The shipper remains liable even if the bill of lading has
been transterred by him. The right of the carrier to such indemnity in no way limits his liability
under the contract of carriage by sea to any person other than the shipper.

2. Any letter of guarantee or agreement by vvhich the shipper undertakes to indemnify the carrler
against loss resulting from the issuance of the bill of lading by the carrier, or by a person acting
on his behalf, vvithout entering a reservation relating to particulars furnished by the shipper for
insertion in the bill of lading, or to the apparent condition of the goods, is void and of no effect as
against any third party, including a consignee, to whom the bill of lading has been transíerred.

3. Such a letter of guarantee or agreement is valid as against the shipper unless the carrier or the
person acting on his behalf, by omitting the reservation referred to in paragraph 2 of this article,
intends to deíraud a third party, including a consignee, who acts in reliance on the description of
the goods in the bill of lading. In the latter case, if the reservation omitted relates to particulars
turnished by the shipper for insertion in the bill of lading, the carrier has no right of indemnity from
the shipper pursuant to paragraph 1 of this article.

4. In the case of intended fraud reíerred to in paragraph 3 of this article, the carrier is liable, vvithout
the benefit of the limitation of liability provided for in this Convention, for the loss incurred by a
third party, including a consignee, because he has acted in reliance on the description of the
goods in the bill of lading.

Article 18. Documents otherthan bills oílading

Where a carrier issues a document other than a bill of lading to evidence the receipt of the goods to
be carried, such a document is prima facie evidence of the conclusion of the contract of carriage by
sea and the taking over by the carrier of the goods as therein described.

PART V. CLAIMS AND ACTIONS

Article 19. Notice ofloss, damage ordelay

1. Unless notice of loss or damage, specitying the general nature of such loss or damage, is given
in vvriting by the consignee to the carrier not later than the vvorking day after the day when the
goods were handed over to the consignee, such handing over is prima facie evidence of the
delivery by the carrier of the goods as described in the document of transport or, ịf no such
document has been issued, in good condition.

2. VVhere the loss or damage is not apparent, the provisions of paragraph 1 of this article apply
correspondingly if notice in writing is not given vvithin 15 consecutive days after the day when the
goods were handed over to the consignee.

3. If the State of the goods at the time they were handed over to the consignee has been the
subject of a joint survey or Inspection by the parties, notice in vvriting need not be given of loss
or damage ascertained during such survey or inspection.

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In the case of any actual or apprehended loss or damage, the carrier and the consignee must
give all reasonable íacilities to each other for inspecting and tallying the goods.

No compensation shall be payable for loss resulting from delay in delivery unless a notice has
been given in vvriting to the carrier within 60 consecutive days after the day when the goods were
handed over to the consignee.

If the goods have been delivered by an actual carrier, any notice given under this article to him
shall have the same effect as if it had been given to the carrier; and any notice given to the carrier
shall have effect as if given to such actual carrier.

Unless notice of loss or damage, speciíying the general nature of the loss or damage, is given
in vvriting by the carrier or actual carrier to the shipper not later than 90 consecutive days after
the occurrence of such loss or damage or after the delivery of the goods in accordance with
paragraph 2 of article 4, vvhichever is later, the íailure to give such notice is príma facie evidence
that the carrier or the actual carrier has sustained no loss or damage due to the fault or neglect
of the shipper, his servants or agents.

For the purpose of this article, notice given to a person acting on the carriers or the actual
carriers behalí, including the master or the officer in charge of the ship, or to a person acting on
the shippers behalí is deemed to have been given to the carrier, to the actual carrier or to the
shipper, respectively.

Article 20. Limitation oíactions

Any action relating to carriage of goods under this Convention is time-barred if judicial or arbitral
proceedings have not been instituted within a period of two years.

The limitation period commences on the day on which the carrier has delivered the goods or part
thereof or, in cases vvhere no goods have been delivered, on the last day on which the goods
should have been delivered.

The day on which the limitation period commences is not included in the period.

The person against whom a claim is made may at any time during the running of the limitation
period extend that period by a declaration in vvriting to the claimant. This period may be turther
extended by another declaration or declarations.

An action for indemnity by a person held liable may be instituted even after the expiration of the
limitation period provided for in the preceding paragraphs if instituted vvithin the time allovved by
the law of the State vvhere proceedings are instituted. Hovvever, the time allowed shall not be less
than 90 days commencing from the day when the person instituting such action for indemnity
has settled the claim or has been served with process in the action against himself.

Article 21. durisdiction

In judicial proceedings relating to carriage of goods under this Convention the plaintiff, at his
option, may institute an action in a court vvhich according to the law of the State vvhere the court
is situated, is competent and within the jurisdiction of which is situated one of the following
places:
(a) the principal place of business or, in the absence thereof, the habitual residence of the
deíendant; or
(b) the place vvhere the contract was made, provided that the deíendant has there a place of
business, branch or agency through vvhich the contract was made; or
(c) the port of loading or the port of discharge; or
(d) any additional place designated for that purpose in the contract of carriage by sea.

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2. (a) Notvvithstanding the preceding provisions of this article, an action may be instituted in the
courts of any port or place in a Contracting State at vvhich the carrying vessel or any other
vessel of the same ovvnership may have been arrested in accordance with applicable rules
of the law of that State and of international law. Hovvever, in such a case, at the petition of
the deíendant, the claimant must remove the action, at his choice, to one of the jurisdictions
reíerred to in paragraph 1 of this artícle forthe determination of the claim, but betore such
removal the deíendant must íurnish security sufficient to ensure payment of any judgement
that may subsequently be avvarded to the claimant in the action.
(b) All questions relating to the sufficiency or othervvise of the security shall be determined by
the court of the port or place of the arrest.

3. No judicial proceedings relating to carriage of goods under this Convention may be instituted in
a place not specitied in paragraph 1 or 2 of this article. The provisions of this paragraph do not
constitute an obstacle to the jurisdiction of the Contracting States for provisional or protective
measures.

4. (a) VVhere an action has been instituted in a court competent under paragraphs 1 or 2 of this
article or vvhere judgement has been delivered by such a court, no new action may be
started betvveen the same parties on the same grounds unless the judgement of the court
beíore which the first action was instituted is not enforceable in the countĩ7 in which the
new proceedings are instituted;
(b) Porthe purpose of thisarticle, the institution of measures with a viewto obtaining entorcement
of a judgement is not to be considered as the starting of a new action;
(c) For the purpose of this article, the removal of an action to a different court within the same
country, or to a court in another country, in accordance with paragraph 2 (a) of this article,
is not to be considered as the starting of a new action.

5. Notvvithstanding the provisions of the preceding paragraphs, an agreement made by the parties,
after a claim under the contract of carriage by sea has arisen, vvhich designates the place
where the claimant may institute an actions, is effective.

Article 22. Arbitration

1. Subject to the provisions of this article, parties may provide by agreement evidenced in vvriting
that any dispute that may arise relating to carriage of goods under this Convention shall be
referred to arbitration.

2. VVhere a charter-party contains a provision that disputes arising thereunder shall be reterred
to arbitration and a bill of lading issued pursuant to the charter-party does not contain special
annotation providing that such provision shall be binding upon the holder of the bill of lading, the
carrier may not invoke such provision as against a holder having acquired the bill of lading in
good faith.

3. The arbitration proceedings shall, at the option of the claimant, be instituted at one of the following
p!aces:
(a) a place in a State vvithin vvhose territory is situated:

(i) the principal place of business of the deíendant or, in the absence thereoí, the habitual
residence of the deíendant; or

(ii) the place vvhere the contract was made, provided that the detendant has there a
place of business, branch or agency through which the contract was made; or

(iii) the port of loading or the port of discharge; or

(b) any place designated for that purpose in the arbitration clause or agreement.

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The arbitrator or arbitration tribunal shall apply the rules of this Convention.

The provisions of paragraphs 2 and 4 of this article are deemed to be part of every arbitration
clause or agreement, and any term of such clause or agreement vvhich is inconsistent therevvith
is null and void.

Nothing in this article affects the validity of an agreement relating to arbitration made by the
parties after the claim under the contract of carriage by sea has arisen.

PART VI. SUPPLEMENTARY PROVISIONS

Article 23. Contractual stipulations

Any stipulation in a contract of carriage by sea, in a bill of lading, or in any other document
evidencing the contract of carriage by sea is null and void to the extent that it derogates, directly
or indirectly, from the provisions of this Convention. The nullity of such a stipulation does not
affect the validity of the other provisions of the contract or document of which it forms a part. A
clause assigning beneíit of Insurance of goods in favour of the carrier, or any similar clause, is
null and void.

Notvvithstanding the provisions of paragraph 1 of this article, a carrier may increase his
responsibilities and obligations under this Convention.

Where a bill of lading or any other document evidencing the contract of carriage by sea is issued,
it must contain a statement that the carriage is subject to the provisions of this Convention vvhich
nullity any stipulation derogating thereírom to the detriment of the shipper or the consignee.

VVhere the claimant in respect of the goods has incurred loss as a result of a stipulation vvhich
is null and void by virtue of the present article, or as a result of the omission of the statement
reíerred to in paragraph 3 of this article, the carrier must pay compensation to the extent required
in order to give the claimant compensation in accordance with the provisions of this Convention
for any loss of or damage to the goods as well as for delay in delivery. The carrier must, in
addition, pay compensation for costs incurred by the claimant for the purpose of exercising his
right, provided that costs incurred in the action vvhere the íoregoing provision is invoked are to
be determined in accordance with the law of the State where proceedings are instituted.

Article 24. General average

Nothing in this Convention shall prevent the application of provisions in the contract of carriage
by sea or national law regarding the adjustment of general average.

With the exception of article 20, the provisions of this Convention relating to the liability of the
carrier for loss of or damage to the goods also determine vvhether the consignee may reíuse
contribution in general average and the liability of the carher to indemnity the consignee in
respect of any such contribution made or any salvage paid.

Article 25. other conventions

This Convention does not modiíy the rights or duties of the carrier, the actual carrier and their
servants and agents provided for in international conventions or national law relating to the
limitation of liability of ovvners of seagoing ships.

The provisions of articles 21 and 22 of this Convention do not prevent the application of the
mandatory provisions of any other multilateral convention already in force at the date of this
Convention relating to matters dealt with in the said articles, provided that the dispute arises
exclusively betvveen parties having their principal place of business in States members of such
other convention. Hovvever, this paragraph does not affect the application of paragraph 4 of
article 22 of this Convention.

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3. No liability shall arise under the provisions of this Convention for damage caused by a nuciear
incident if the operator of a nuclear installation is liable for such damage:
(a) under either the Paris Convention of 29 July 1960 on Third Party Liability in the Field of
Nuclear Energy as amended by the Additional Protocol of 28 January 1964, o rth e Vienna
Convention of 21 May 1963 on Civil Liability for Nuclear Damage, or
(b) by virtue of national law governing the liabllity for such damage, provided that such law
is in all respects as íavourable to persons who may suffer damage as is either the Paris
Convention or the Vienna Convention.

4. No liability shall arise under the provisions of this Convention for any loss of or damage to or delay
in delivery of luggage for which the carrier is responsible under any international convention or
national law relating to the carriage of passengers and their luggage by sea.

5. Nothing contained in this Convention prevents a Contracting State from applying any other
international convention vvhich is already in force at the date of this Convention and vvhich
applies mandatorily to contracts of carriage of goods primarily by a mode of transport other than
transport by sea. This provision also applies to any subsequent revision or amendment of such
international convention.

Article 26. Unit of account

1. The unit of account referred to in article 6 of this Convention is the special dravving right as defined
by the International Monetary Fund. The amounts mentioned in article 6 are to be converted into
the national currency of a State according to the value of such currency at the date of judgement
or the date agreed upon by the parties. The value of a national currency, In terms of the special
dravving right, of a Contracting State which is a member of the International Monetary Fund is to
be calculated in accordance with the method of valuation applied by the International Monetary
Fund in effect at the date in question for its operations and transactions. The value of a national
currency, in terms of the special dravving right, of a Contracting State which is not a member of
the International Monetary Fund is to be calculated in a manner determined by that State.

2. Nevertheless, those States which are not members of the International Monetary Fund and
whose law does not permit the application of the provisions of paragraph 1 of this article may, at
the time of signature, or at the time of ratitication, acceptance, approval or accession or at any
time thereaữer, declare that the limits of liability provided for in this Convention to be applied in
their territories shall be fixed as 12,500 monetary units per package or other shipping unit or 37.5
monetary units per kilogram of gross vveight of the goods.

3. The monetary unit reterred to in paragraph 2 of this article corresponds to sixty-five and a half
milligrams of gold of millesimal íineness nine hundred. The conversion of the amounts reíerred
to in paragraph 2 into the national currency is to be made according to the law of the State
concerned.

4. The calculation mentioned in the last sentence of paragraph 1 and the conversion mentioned in
paragraph 3 of this article is to be made in such a manner as to express in the national currency
of the Contracting State as far as possible the same real value for the amounts in article 6 as
is expressed there in units of account. Contracting States must communicate to the depositary
the manner of calculation pursuant to paragraph 1 of this article, or the result of the conversion
mentioned in paragraph 3 of this article, as the case may be, at the tlme of signature or when
depositing their instruments of ratiíication, acceptance, approval or accession, or when availing
themselves of the option provided for in paragraph 2 of this article and vvhenever there is a
change in the manner of such calculation or in the result of such conversion.

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PART VII. FINAL CLAUSES

Article 27. Depositary

The Secretary-General of the United Nations is hereby designated as the depositary of this Convention.

Article 28. Signature, Ratitication, Acceptance, Approval, Accession

1. This Convention is open for signature by all States until 30 April 1979 at the Headquarters of the
United Nations, New York.
2. This Convention is subject to ratiíication, acceptance or approval by the signatory States.
3. After 30 April 1979, this Convention will be open for accession by all States vvhich are not
signatory States.
4. Instruments of ratiíication, acceptance, approval and accession are to be deposited with the
Secretary-General of the United Nations.

Article 29. Reservations

No reservations may be made to this Convention.

Article 30. Entry into íorce

1. This Convention enters into force on the first day of the month following the expiration of one
year from the date of deposit of the tvventieth instrument of ratiíication, acceptance, approval or
accession.

2. For each State which becomes a Contracting State to this Convention after the date of the deposit
of the tvventieth instrument of ratiíication, acceptance, approval or accession, this Convention
enters into force on the first day of the month following the expiration of one year after the deposit
of the appropriate instrument on behalt of that State.

3. Each Contracting State shall apply the provisions of this Convention to contracts of carriage by sea
concluded on or atter the date of the entry into force of this Convention in respect of that State.

Article 31. Denunciation o f other conventions

1. Upon becoming a Contracting State to this Convention, any State Party to the International
Convention for the Uniíication of certain Rules relating to Bills of Lading signed at Brussels on 25
August 1924 (1924 Convention) must notity the Government of Belgium as the depositary of the
1924 Convention of its denunciation of the said Convention with a declaration that the denunciation
is to take effect as from the date when this Convention enters into force in respect of that State.

2. UpontheentryintoforceofthisConventionunderparagraph 1 of article 30, the depositary of this

Convention must notity the Government of Belgium as the depositary of the 1924 Convention of
the date of such entry into force, and of the names of the Contractlng States in respect of vvhich
the Convention has entered into force.

3. The provisions of paragraphs 1 and 2 of this article apply correspondingly in respect of States
Parties to the Protocol signed on 23 Pebruary 1968 to amend the International Convention for the
Uniíication of certain Ruìés relating to Bills of Lading signed at Brussels on 25 August 1924.

4. Notvvithstanding article 2 of this Convention, for the purposes of paragraph 1 of this article, a
Contracting State may, if it deems it desirable, defer the denunciation of the 1924 Convention
and of the 1924 Convention as modiíied by the 1968 Protocol for a maximum period of five years
from the entry into force of this Convention. It will then notity the Government of Belgium of its
intention. During this transitory period, it must apply to the Contracting States this Convention to
the exclusion of any other one.

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Article 32: Revision and amendment

1. At the request of not less than one third of the Contracting States to this Convention, the depositary
shall convene a conỉerence of the Contracting States for revising or amending it.

2. Any instrument of ratiíication, acceptance, approva! or accession deposited after the entry into
force of an amendment to this Convention is deemed to apply to the Convention as amended.

Article 33. Revision o ỉth e limitation amounts and unit otaccount ormonetary unit

1. Notvvithstanding the provisions of article 32, a conterence only for the purpose of altering the
amount specified in article 6 and paragraph 2 of article 26, or of substituting either or both of
the units deíined in paragraphs 1 and 3 of article 26 by other units is to be convened by the
depositary in accordance with paragraph 2 of this article. An alteration of the amounts shall be
made only because of a significant change in their real value.

2. A revision conterence is to be convened by the depositary when not less than one fourth of the
Contracting States so request.

3. Any decision by the coníerence must be taken by a two-thirds majority of the participating States.
The amendment is communicated by the depositary to all the Contracting States for acceptance
and to all the States signatories of the Convention for information.

4. Any amendment adopted enters into force on the first day of the month following one year
after its acceptance by two thirds of the Contracting States. Acceptance is to be effected by the
deposit of a formal instrument to that effect with the depositary.

5. After entry into force of an amendment a Contracting State vvhich has accepted the amendment
is entitled to apply the Convention as amended in its relations with Contracting States vvhich
have not vvithin six months after the adoption of the amendment notiíied the depositary that they
are not bound by the amendment.

6. Any instrument of ratiĩication, acceptance, approval or accession deposited after the entry into
force of an amendment to this Convention is deemed to apply to the Convention as amended.

Article 34. Denunciation

1. A Contracting State may denounce this Convention at any time by means of a notiíication in
vvriting addressed to the depositary.

2. The denunciation takes effect on the first day of the month following the expiration of one year
after the notiíication is received by the depositary. Where a longer period is specitied in the
notiíication, the denunciation takes effect upon the expiration of such longer period after the
notiíication is received by the depositary.

Done at Hamburg, this thirty-first day of March, one thousand nine hundred and seventy-eight, in a
single original, of which the Arabic, Chinese, English, Prench, Russian and Spanish texts are equally
authentic.

In vvitness whereof the undersigned plenipotentiaries, being duly authorized by their respective
Governments, have signed the present Convention.

Common understanding adopted by the United Nations Conference on the Carriage

of Goods by Sea.

It is the common understanding that the liability of the carrier under this Convention is based on the
principle of presumed fault or neglect. This means that, as a rule, the burden of proof rests on the
carrier but, with respect to certain cases, the provisions of the Convention modiíy this rule.

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Rotterdam Rules

I _ -
General Assembly
. _ _ Distr.: General
2 Pebruary 2009

S ixty-th ird session

A g en d a item 74

Resolutỉon adopted by the General Assembly

{on the report o f the Sixth C om m ittee (A/63/438)]

63/122. U nited N ations C on ven tion on C on tracts for

th e Intern ation al C arriage o f G ood s W h olly or
Partly by Sea

The General Assembly,

Recalling its resolution 2205 (XXI) o f 17 December 1966, by which it established

the United Nations Commission on International Trade Law with a mandate to íurther
the Progressive harmonization and uniíĩcation o f the law o f intemational trade and in
that respect to bear in mind the interests of all peoples, in particular those o f developing
countries, in the extensive development o f intemational trade,

Concerned that the current legal regime goveming the intemational caưiage
of goods by sea lacks uniformity and fails to adequately take into account modem
transport practices, including containerization, door-to-door transport contracts and
the use o f electronic transport documents,

Noting that the development o f intemational trade on the basis o f equality and
mutual beneĩit is an important element in promoting friendly relations among States,

Convinced that the adoption o f uniform rules to modemize and harmonize the
rules that govem the intemational carriage o f goods involving a sea leg would enhance
legal certainty, improve eữiciency and commercial predictability in the intemational
carriage o f goods and reduce legal obstacles to the flow o f intemational trade among
all States,

Believing that the adoption o f uniform rules to govem intemational contracts of

carriage wholly or partly by sea will promote legal certainty, improve the eíTiciency of
intemational caưiage o f goods and facilitate new access opportunities for previously
remote parties and markets, thus playing a íundamental role in promoting trade and
economic development, both domestically and intemationally.

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Noting that shippers and caưiers do not have the benefit o f a binding and balanced
universal regime to support the operation o f contracts of caưiage involving various
modes o f transport,

Recalling that, at its thirty-íourth and thirty-fifth sessions, in 2001 and 2002,
the Commission decided to prepare an intemational legislative instrument goveming
door-to-door transport operations that involve a sea leg,'

Recogniĩing that all States and interested intemational organizations were

invited to participate in the preparation of the draft Convention on Contracts for the
International Caưiage o f Goods Wholly or Partly by Sea and in the forty-first session
o f the Commission, either as members or as observers, with a íìill opportunity to speak
and make proposals,

Noting with satis/action that the text o f the draft Convention was circulated
for comment to all States Members o f the United Nations and intergovemmental
organizations invited to attend the meetings of the Commission as observers, and that
the comments received were before the Commission at its forty-first session,^

Taking note with satis/action o f the decision of the Commission at its

forty first session to submit the draft Convention to the General Assembly for its
consideration,^

Taking note of the draít Convention approved by the Commission,'*

Expressing its appreciation to the Government of the Netherlands for its oíĩer to
host a signing ceremony for the Convention in Rotterdam,

1. Commends the United Nations Commission on International Trade Law for

preparing the draft Convention on Contracts for the International Caưiage o f Goods
Wholly or Partly by Sea;

2. Adopts the United Nations Convention on Contracts for the International

Caưiage o f Goods Wholly or Partly by Sea, contained in the annex to the present
resolution;

3. Authorizes a ceremony for the opening for signature to be held on

23 September 2009 in Rotterdam, the Netherlands, and recommends that the rules
embodied in the Convention be knovvn as the “Rotterdam Rules”;

4. Caỉls upon all Govemments to consider becoming party to the

Convention.

67th plenary meeting

II December 2008

‘ Officiaỉ Records o f the G eneral Assembty, Fifty-sixth Session, Supplement No. 17 and corrigendum
(A/56/17 and C oư.3), paras. 319-345; and ibid., Fifty-seventh Session, Supplem ent No. 17 (A757/17), paras.
210-224,
= A /CN .9/658 and Add. 1-1 4 and Add. 14/Corr. 1.
’ Official Records o f the General Assembly, Sixty-third Session, Supplement No. 17 and corrigendum
(A/63/17 and C orr.l), para, 298.
■
’ Ibid., annex 1.

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Annex
United Nations Convention on Contracts for the International Carriage of
Goods Wholly or Partly by Sea

The States Parties to this Convention,

Reaffirming their belief that intemational trade on the basis of equality and
mutual benefit is an important element in promoting friendly relations among States,

Convinced that the Progressive harmonization and unification o f intemational

trade law, in reducing or removing legal obstacles to the flow o f intemational trade,
significantly contributes to universal economic cooperation among all States on a
basis o f equality, equity and common interest, and to the well-being of all peoples,

Recognizing the significant contribution o f the International Convention for the

Unification o f Certain Rules o f Law relating to Bills o f Lading, signed in Brussels
on 25 August 1924, and its Protocols, and o f the United Nations Convention on the
Caưiage o f Goods by Sea, signed in Hamburg on 31 March 1978, to the harmonization
o f the law goveming the carriage o f goods by sea,

Mind/ul o f the technological and commercial developments that have taken place
since the adoption o f those conventions and o f the need to consolidate and modemize
them,

Noting that shippers and carriers do not have the benefit o f a binding universal
regime to support the operation of contracts of maritime carriage involving other
modes o f transport,

Believing that the adoption o f uniíorm rules to govem intemational contracts o f

carriage wholly or partly by sea will promote legal certainty, improve the efficiency of
intemational caưiage o f goods and facilitate new access opportunities for previously
remote parties and markets, thus playing a íundamental role in promoting trade and
economic development, both domestically and intemationally,

Have agreed as follows:

Chapter 1
General provỉsions

Article 1
Defmitions

For the purposes o f this Convention:

1. “Contract o f carriage” means a contract in which a caưier, against the payment

o f freight, undertakes to carry goods from one place to another. The contract shall
provide for caưiage by sea and may provide for carriage by other modes o f transport
in addition to the sea caưiage.

2. “Volume contract” means a contract o f caưiage that provides for the carriage o f
a specified quantity o f goods in a series o f shipments during an agreed period of time.
The speciĩication o f the quantity may include a minimum, a maximum or a certain
range.

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3. “Liner transportation” means a transportation Service that is oíĩered to the public

through publication or similar means and includes transportation by ships operating
on a regular schedule between specified ports in accordance with publicly available
timetables o f sailing dates.

4. “Non-liner transportation” means any transportation that is not liner

transportation.

5. “C aưier” means a person that enters into a contract o f carriage with a shipper.

6. (a) “ Performing party” means a person other than the carrier that performs or
undertakes to períoim any of the caư ier’s obligations under a contract of carriage with
respect to the receipt, loading, handling, stowage, carriage, care, unloading or delivery
of the goods, to the extent that such person acts, either directly or indirectly, at the
carrier’s request or under the caư ier’s supervision or control.
(b) “Performing party” does not include any person that is retained, directly or
indirectly, by a shipper, by a documentary shipper, by the controlling party or by the
consignee instead o f by the carrier.

7. “Maritime performing party” means a performing party to the extent that it

performs or undertakes to perform any o f the carrier’s obligations during the period
betvveen the arrival of the goods at the port of loading of a ship and their departure
from the port o f discharge of a ship. An inland carrier is a maritime performing party
only if it perfonns or undertakes to perform its services exclusively within a port
area.

8. “Shipper” means a person that enters into a contract o f carriage with a carrier.

9. “Documentary shipper” means a person, other than the shipper, that accepts to be
named as “shipper” in the transport document or electronic transport record.

10. “Holder” means:

(a) A person that is in possession of a negotiabie transport document; and (i) if
the document is an order document, is identified in it as the shipper or the consignee,
or is the person to which the document is duly endorsed; or (ii) if the document is a
blank endorsed order document or bearer document, is the bearer thereoí; or
(h) The person to which a negotiable electronic transport record has been issued
or transteưed in accordance \vith the procedures referred to in article 9, paragraph 1,

11. “Consignee” means a person entitled to delivery o f the goods under a contract of
carriage or a transport document or electronic transport record.

12. “Right 0! control" o f the goods means the right under the contract ot carriage to
give the carrier instructions in respect o f the goods in accordance with chapter 10.

13. “Controlling party” means the person that pursuant to article 51 is entitled to
exercise the right of control.

14. “Transport document” means a document issued under a contract o f carriage by

the carrier that;
(a) Evidences the caư ier’s or a performing party’s receipt o f goods under a
contract o f carriage; and
(b) Evidences or contains a contract o f carriage.

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15. “Negotiable transport document” means a transport document that indicates, by

vvording such as “to order” or “negotiable” or other appropriate wording recognized
as having the same eíTect by the law applicable to the document, that the goods have
been consigned to the order o f the shipper, to the order o f the consignee, or to bearer,
and is not explicitly stated as being “non-negotiable” or “not negotiable” .

16. “Non-negotiable transport document” means a transport document that is not a

negotiable transport document.

17. “Electronic communication” means information generated, sent, received or

stored by electronic, optical, digital or similar means with the result that the infonnation
communicated is accessible so as to be usable for subsequent reference.

18. “Electronic transport record” means information in one or more messages issued
by electronic communication under a contract of carriage by a caưier, including
information logically associated with the electronic transport record by attachments
or othenvise linked to the electronic transport record contemporaneously with or
subsequent to its issue by the caưier, so as to become part o f the electronic transport
record, that:
(ứ) Evidences the carrier’s or a perĩorming party’s receipt o f goods under a
contract of caưiage; and
(6) Evidences or contains a contract o f carriage.

19. “Negotiable electronic transport record” means an electronic transport record:

(a) That indicates, by vvording such as “to order”, or “negotiable”, or other
appropriate \vording recognized as having the same effect by the law applicable to
the record, that the goods have been consigned to the order o f the shipper or to the
order o f the consignee, and is not explicitly stated as being “non-negotiable” or “not
negotiable”; and
(h) The use o f which meets the requirements o f article 9, paragraph 1.

20. “Non-negotiable electronic transport record” means an electronic transport

record that is not a negotiable electronic transport record.

21. The “issuance” o f a negotiable electronic transport record means the issuance
o f the record in accordance with procedures that ensure that the record is subject to
exclusive control from its creation until it ceases to have any eíĩect or validity.

22. The “transíer” of a negotiable electronic transport record means the transfer of
exclusive control over the record.

23. “Contract particulars” means any infoirnation relating to the contract o f carriage
or to the goods (including terms, notations, signatures and endorsements) that is in a
transport document or an electronic transport record.

24. “Goods” means the wares, merchandise, and articles o f every kind \vhatsoever
that a caưier undertakes to carry under a contract o f caưiage and includes the packing
and any equipment and Container not supplied by or on behalf o f the caưier.

25. “Ship” means any vessel used to caưy goods by sea.

26. “Container” means any type o f Container, transportable tank or flat, swapbody,
or any similar unit load used to consolidate goods, and any equipment ancillary to
such unit load.

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27. “Vehicle” means a road or railroad cargo vehicle.

28. “Preight” means the remuneration payable to the caưier for the carriage of goods
under a contract o f carriage.

29. “Domicile” means (a) a place where a company or other legal person or association
o f natural or legal persons has its (i) statutory seat or place o f incorporation or Central
registered oữìce, whichever is applicable, (ii) Central administration or (iii) principal
place of business, and (b) the habitual residence of a natural person.

30. “Competent court” means a court in a Contracting State that, according to the
mles on the intemal allocation o f jurisdiction among the courts o f that State, may
exercise jurisdiction over the dispute.

Articỉe 2
Interpretation o f this Convention

In the interpretation of this Convention, regard is to be had to its intemational

character and to the need to promote uniíormity in its application and the observance
o f good faith in intemational trade.

Article 3
Form requirements

The notices, conĩirm ation, consent, agreem ent, declaration and other
Communications reíerred to in articles 19, paragraph 2; 23, paragraphs 1 to 4;
36, subparagraphs 1 {b), (c) and {đ)\ 40, subparagraph 4 (ố); 44; 48, paragraph 3;
51, subparagraph 1 (ồ); 59, paragraph 1; 63; 66; 67, paragraph 2; 75, paragraph
4; and 80, paragraphs 2 and 5, shall be in vvriting. Electronic Communications
may be used for these purposes, provided that the use o f such means is with the
consent o f the person by which it is comm unicated and o f the person to which it
is communicated.

Article 4
Applicahílity ofdefences and limits ofliability

1. Any provision o f this Convention that may provide a defence for, or limit the
liability of, the caưier applies in any judicial or arbitral proceeding, whether founded
in contract, in tort, or othenvise, that is instituted in respect o f loss of, damage to, or
delay in delivery of goods covered by a contract o f caưiage or for the breach of any
other obligation under this Convention against:
(a) The caưier or a maritime períomiing party;
(b) The master, crew or any other person that perfoims services on board the
ship; or
(c) Employees o f the caưier or a maritime performing party.

2. Any provision of this Convention that may provide a defence for the shipper
or the documentary shipper applies in any judicial or arbitral proceeding, whether
founded in contract, in tort, or othenvise, that is instituted against the shipper, the
documentary shipper, or their subcontractors, agents or employees.

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Chapter 2
Scope o f application

Article 5
General scope o f application

1. Subject to article 6, this Convention applies to contracts of carriage in which the

place of receipt and the place o f delivery are in different States, and the port o f loading
o f a sea carriage and the port o f discharge o f the same sea caưiage are in diữerent
States, if, according to the contract o f carriage, any one o f the following places is
located in a Contracting State:
(ữ) The place of receipt;
(ồ) The port o f loading;
(c) The place o f delivery; or
{d) The port o f discharge.
2. This Convention applies without regard to the nationality o f the vessel, the carrier,
the performing parties, the shipper, the consignee, or any other interested parties.

Article 6
Specific exclusions

1. This Convention does not apply to the following contracts in liner

transportation:
(a) charter parties; and
(ố) Other contracts for the use o f a ship or o f any space thereon.

2. This Convention does not apply to contracts o f carriage in non-liner transportation

except when:
(a) There is no charter party or other contract between the parties for the use of
a ship or o f any space thereon; and
{b) A transport document or an electronic transport record is issued.

Article 7
Application to certain parties

Notwithstanding article 6, this Convention applies as betvveen the caưier and

the consignee, controlling party or holder that is not an original party to the charter
party or other contract of caưiage excluded from the application o f this Convention.
However, this Convention does not apply as betvveen the original parties to a contract
o f caưiage excluded pursuant to article 6.

Chapter 3
Electronic transport records

Article 8
ưse and effect o f electronic transport records

Subject to the requirements set out in this Convention:

(a) Anything that is to be in or on a transport document under this Convention
may be recorded in an electronic transport record, provided the issuance and subsequent

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use o f an electronic transport record is with the consent of the carrier and the shipper;
and
(b) The issuance, exclusive control, or transfer of an electronic transport record
has the same effect as the issuance, possession, or transfer o f a transport document.

Article 9
Procedures for use o f negotiable electronic tmnsport records

1. The use o f a negotiable electronic transport record shall be subject to procedures

that provide for:
(ứ) The method for the issuance and the transfer of that record to an intended
holder;
(ồ) An assurance that the negotiable electronic transport record retains its
integrity;
(c) The m anner in which the holder is able to demonstrate that it is the
holder; and
(J) The manner o f providing confirmation that delivery to the holder has been
etĩected, or that, pursuant to articles 10, paragraph 2, or 47, subparagraphs 1 (a) (ii)
and (c), the electronic transport record has ceased to have any eíTect or validity.

2. The procedures in paragraph 1 o f this article shall be reíerređ to in the contract

particiilars and be readily ascertainable.

Article 10
Replacement o f negotiahle transport document or negotiable eỉectronic transporl
record

1. lf a negotiable transport document has been issued and the carrier and the holder
agree to replace that document by a negotiable electronic transport record:
(a) The holder shall surrender the negotiable transport document, or all o f thein
if more than one has been issued, to the carrier;
(h) The caưier shall issue to the holder a negotiable electronic transport record
that includes a statement that it replaces the negotiable transport document; and
(c) The negotiable transpcrt docurnent ceases thereaĩter to have any effect cr
validity.

2. ỉf a negotiable electronic transport record has been issued and the carrier and
the holder agree to replace that electronic transport record by a negoliable transport
document:
(ữ) The caưier shall issue to the holder, in place o f the electronic transport
record, a negotiable transport document that includes a statement that it replaces the
negotiable electronic transport record; and
(b) The electronic transport record ceases thereaíter to have any effect or
validity.

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Chapter 4
Obligations of the carrier

Article II
Carriage and deìivery o f the goods

The carrier shall, subject to this Convention and in accordance with the terms of
the contract o f caưiage, carry the goods to the place o f destination and deliver them
to the consignee.

Aríicle 12
Period o f responsibility o f the carrier

1. The period o f responsibility o f the carrier for the goods under this Convention
begins when the carrier or a perfonning party receives the goods for carriage and ends
when the goods are delivered.

2. (a) If the law or regulations o f the place o f receipt require the goods to be
handed over to an authority or other third party from which the caưier may collect
them, the period o f responsibility o f the caưier begins when the carrier collects the
goods from the authority or other third party.
(ò) If the law or regulations o f the place o f delivery require the caưier to hand
over the goods to an authority or other third party from vvhich the consignee may
collect them, the period o f responsibility o f the carrier ends when the carrier hands the
goods over to the authority or other third party.

3. For the puqỉose o f determining the carrier’s period o f responsibility, the parties
may agree on the time and location o f receipt and delivery o f the goods, but a provision
in a contract o f carriage is void to the extent that it provides that:
(a) The time o f receipt o f the goods is subsequent to the beginning o f their
initial loading under the contract of caưiage; or
(b) The time o f delivery o f the goods is prior to the completion o f their fmal
unloading under the contract o f carriage.

Article 13
Specific obligations

1. The caưier shall during the period o f its responsibility as defined in article 12,
and subject to article 26, properly and careíully receive, load, handle, stow, carry,
keep, care for, unload and deliver the goods.

2. Notwithstanding paragraph 1 o f this article, and without prejudice to the other

provisions in chapter 4 and to chapters 5 to 7, the carrier and the shipper may agree
that the loading, handling, stowing or unloading o f the goods is to be perfonned by
the shipper, the documentary shipper or the consignee. Such an agreement shall be
referred to in the contract particulars.

Article 14
Specific ohligatiom applicable to the voyage by sea

The carrier is bound before, at the beginning of, and during the voyage by sea to
exercise due diligence to:
(a) Make and keep the ship seaworthy;

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(b) Properly crew, equip and supply the ship and keep the ship so crewed,
equipped and supplied throughout the voyage; and
(c) Make and keep the holds and all other parts of the ship in which the goods
are caưied, and any containers supplied by the caưier in or upon which the goods are
carried, fit and safe for their reception, caưiage and preservation.

Article 15
Goods that may become a danger

Notwithstanding articles 11 and 13, the caưier or a performing party may decline
to receive or to load, and may take such other measures as are reasonable, including
unloading, destroying, or rendering goods harmless, if the goods are, or reasonably
appear likely to become during the carrier’s period o f responsibility, an actual danger
to persons, property or the environment.

Article 16
Sacrifice o f the goods during the voyage by sea

Notwithstanding articles 11, 13, and 14, the carrier or a performing party may
sacriĩice goods at sea when the sacriíĩce is reasonably made for the common safety or
for the purpose of preserving from peril human life or other property involved in the
common adventure.

Chapter 5
Liabỉlỉty of the carrier for loss, damage or delay

Article ì 7
Basis o f ìiahiìity

1. The caưier is liable for loss o f or damage to the goods, as well as for delay
in delivery, if the claimant proves that the loss, damage, or delay, or the event or
circumstance that caused or contributed to it took place during the period of the
carrier’s responsibility as defined in chapter 4.

2. The caưier is relieved o f all or part o f its liability pursuant to paragraph 1 of this
article if it proves that the cause or one of the causes o f the loss, damage, or delay is
not attributable to its fault or to the fault of any person referred to in article 18.

3. The carrier is also relieved o f all or part o f its liability pursuant to paragraph 1 o f
this article if, altematively to proving the absence of fault as provided in paragraph 2
o f this article, it proves that one or more o f the following events or circumstances
caused or contributed to the loss, damage, or delay:
(a) Act of God;
(b) Perils, dangers, and accidents of the sea or other navigable vvaters;
(c) War, hostilities, armed conílict, piracy, teưorism, riots, and civil
commotions;
(d) Quarantine restrictions; interference by or impediments created by
govemments, public authorities, rulers, or people including detention, arrest, or seizure
not attributable to the caưier or any person referred to in article 18;
(e) Strikes, lockouts, stoppages, or restraints o f labour;
(/) Fire on the ship;
(g) Latent defects not discoverable by due diligence;

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{h) Act or omission o f the shipper, the documentary shipper, the controlling
party, or any other person for whose acts the shipper or the documentary shipper is
liable pursuant to article 33 or 34;
(/) Loading, handling, stowing, or unloading o f the goods performed pursuant
to an agreement in accordance with article 13, paragraph 2, unless the caưier or a
períorming party perfoưns such activity on behalf o f the shipper, the documentary
shipper or the consignee;
(/■) Wastage in bulk or vveight or any other loss or damage arising from inherent
defect, quality, or vice o f the goods;
{k) InsuíTiciency or defective condition o f packing or marking not performed
by or on behalf of the caưier;
(/) Saving or attempting to save life at sea;
(w) Reasonable measures to save or attempt to save property at sea;
(«) Reasonable measures to avoid or attempt to avoid damage to the
environment; or
(o) Acts o f the caưier in pursuance o f the powers conferred by articles 15
and 16.

4. Notxvithstanding paragraph 3 o f this article, the caưier is liable for all or part of
the loss, damage, or delay:
(a) If the claimant proves that the fault o f the caưier or o f a person referred to
in article 18 caused or contributed to the event or circumstance on which the carrier
relies; or
(b) If the claimant proves that an event or circumstance not listed in paragraph 3
o f this article contributed to the loss, damage, or delay, and the caưier cannot prove
that this event or circumstance is not attributable to its fault or to the fault o f any
person referred to in article 18.

5. The carrier is also liable, notwithstanding paragraph 3 o f this article, for all or
part of the loss, damage, or delay if;

(a) The claimant proves that the loss, damage, or delay was or was probably
caused by or contributed to by (i) the unseaworthiness o f the ship; (ii) the improper
crewing, equipping, and supplying o f the ship; or (iii) the fact that the holds or other
parts of the ship in which the goods are caưied, or any containers supplied by the
carrier in or upon which the goods are carried, were not fit and safe for reception,
caưiage, and preservation o f the goods; and

(b) The caưier is unable to prove either that: (i) none o f the events or
circumstances referred to in subparagraph 5 (a) o f this article caused the loss, damage,
or delay; or (ii) it complied with its obligation to exercise due diligence pursuant to
article 14.

6. When the caưier is relieved o f part o f its liability pursuant to this article, the
caưier is liable only for that part o f the loss, damage or delay that is attributable to the
event or circumstance for which it is liable pursuant to this article.

Article 18
Liability o f the carrier fo r other persons

The caưier is liable for the breach o f its obligations under this Convention caused
by the acts or omissions of:

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(a) Any performing party;

(ò) The master or crew of the ship;
(c) Employees o f the carrier or a performing party; or
(c/) Any other person that performs or undertakes to períonn any o f the
carrier’s obligations under the contract o f carriage, to the extent that the person acts,
either directly or indirectly, at the carrier’s request or under the carrier’s supervision
or control.

Article 19
Liability o f maritime performing parties

1. A maritime performing party is subject to the obligations and liabilities imposed

on the caưier under this Convention and is entitled to the carrier’s defences and limits
of liability as provided for in this Convention if:
(a) The maritime perfonning party received the goods for caưiage in a
Contracting State, or delivered them in a Contracting State, or períoimed its activities
with respect to the goods in a port in a Contracting State; and
(b) The occuưence that caused the loss, damage or delay took place: (i) during
the period between the arrival o f the goods at the port o f loading o f the ship and their
departure from the port o f discharge from the ship; (ii) while the maritime performing
party had custody o f the goods; or (iii) at any other time to the extent that it was
participating in the períormance o f any o f the activities contemplated by the contract
of carriage.

2. lf the carrier agrees to assume obligations other than those imposed on the
carrier under this Convention, or agrees that the limits o f its liability are higher
than the limits specitìed under this Convention, a maritime períorming party is not
bound by this agreement unless it expressly agrees to accept such obligations or
such higher limits.

3. A maritime performing party is liable for the breach o f its obligations under this
Convention caused by the acts or omissions of any person to which it has entrusted the
períbrmance of any o f the carrier’s obligations under the contract o f caưiage under the
conditions set out in paragraph 1 of this article.

4. Nothing in this Convention imposes liability on the master or crew o f the ship or
on an employee of the caưier or o f a maritime períbrming party.

Article 20
Joint and several ỉiability

1. If the caiTier and one or more niaritiưie períbrrning parties aie liable lor ihe loss
of, damage to, or delay in delivery o f the goods, their liability is joint and several but
only up to the limits provided for under this Conventioii.

2. Without prejudice to article 61, the aggregate liability o f all such persons shall
not exceed the overall limits of liability under this Convention.

Article 21
Delay

Delay in delivery occưrs when the goods are not delivered at the place of
destination provided for in the contract of caưiage within the time agreed.

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Article 22
Calculation ofcompensation

1. Subject to article 59, the compensation payable by the caưier for loss o f or
damage to the goods is calculated by reference to the value o f such goods at the place
and time of delivery established in accordance with article 43.

2. The value o f the goods is fixed according to the commodity exchange price or,
if there is no such price, according to their market price or, if there is no commodity
exchange price or market price, by reference to the normal value o f the goods o f the
same kind and quality at the place o f delivery.

3. In case o f loss o f or damage to the goods, the carrier is not liable for payment o f
any compensation beyond what is provided for in paragraphs 1 and 2 o f this article
except when the caưier and the shipper have agreed to calculate compensation in a
different manner within the limits o f chapter 16.

Article 23
Notice in case o f loss, damage or delay

1. The caưier is presumed, in absence o f proof to the contrary, to have delivered

the goods according to their description in the contract particulars unless notice o f loss
o f or damage to the goods, indicating the general nature of such loss or damage, was
given to the caưier or the performing party that delivered the goods before or at the
time o f the delivery, or, if the loss or damage is not apparent, within seven working
days at the place o f delivery after the delivery o f the goods.

2. Pailure to provide the notice referred to in this article to the caưier or the
períorming party shall not affect the right to claim compensation for loss of or damage
to the goods under this Convention, nor shall it affect the allocation o f the burden of
proof set out in article 17.

3. The notice referred to in this article is not required in respect o f loss or damage
that is ascertained in a joint inspection o f the goods by the person to which they have
been delivered and the caưier or the maritime performing party against which liability
is being asserted.

4. No compensation in respect o f delay is payable ưnless notice o f loss due to

delay was given to the carrier within twenty-one consecutive days o f delivery o f
the goods.

5. When the notice referred to in this article is given to the períorming party that
delivered the goods, it has the same eíTect as if that notice was given to the carrier,
and notice given to the caưier has the same eíĩect as a notice given to a maritime
performing party.

6. In the case o f any actual or apprehended loss or damage, the parties to the dispute
shall give all reasonable íacilities to each other for inspecting and tallying the goods
and shall provide access to records and documents relevant to the caưiage o f the
goods.

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Chapter 6
Additional provisions relating to particular stages of carriage

Article 24
Deviation

When pursuant to applicable law a deviation constitutes a breach of the caư ier’s
obligations, such deviation o f itself shall not deprive the caưier or a maritime
performing party o f any defence or limitation o f this Convention, except to the extent
provided in article 61.

Article 25
Deck cargo on ships

1. Goods may be caưied on the deck o f a ship only if:

(а) Such carriage is required by law;
(б) They are caưied in or on containers or vehicles that are fit for deck carriage,
and the decks are specially fitted to carry such containers or vehicles; or
(c) The carriage on deck is in accordance with the contract o f carriage, or the
customs, usages or practices of the trade in question.

2. The provisions o f this Convention relating to the liability o f the carrier apply to
the loss of, damage to or delay in the delivery o f goods carried on deck pursuant to
paragraph 1 o f this article, but the carrier is not liable for loss o f or damage to such
goods, or delay in their delivery, caused by the special risks involved in their carriage
on deck when the goods are caưied in accordance with subparagraphs 1 (a) or (c) of
this article.

3. If the goods have been carried on deck in cases other than those permitted
pursuant to paragraph 1 of this article, the carrier is liable for loss of or damage to the
goods or delay in their delivery that is exclusively caused by their carriage on deck,
and is not entitled to the defences provided for in article 17.

4. The carrier is not entitled to invoke subparagraph 1 (c) of this article against a
third party that has acquired a negotiable transport document or a negotiable electronic
transport record in good faith, unless the contract particulars State that the goods may
be caưied on deck.

5. lf the caưier and shipper expressly agreed that the goods would be carried under
deck, the carrier is not entitled to the benefit o f the limitation of liability for any loss
of, damage to or delay in the delivery o f the goods to the extent that such loss, damage,
or delay resulted from their caưiage on deck.

Article 26
Carriage preceding or subsequent to sea carriage

When loss of or damage to goods, or an event or circumstance causing a delay in

their delivery, occurs during the carrier’s period o f responsibility but solely before their
loading onto the ship or solely after their discharge from the ship, the provisions of this
Convention do not prevail over those provisions o f another intemational instrument
that, at the time o f such loss, damage or event or circumstance causing delay:
(a) Pursuant to the provisions of such intemational instrument would have
applied to all or any o f the caư ier’s activities if the shipper had made a separate and

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direct contract with the carrier in respect of the particular stage o f carriage where
the loss of, or damage to goods, or an event or circumstance causing delay in their
delivery occurred;
{b) Speciĩically provide for the caưier’s liability, limitation of liability, or time
for suit; and
(c) Cannot be departed from by contract either at all or to the detriment of the
shipper under that instrument.

Chapter 7
Obligations of the shipper to the carrier

Article 27
Delivery for carriage

1. Unless othenvise agreed in the contract o f carriage, the shipper shall deliver
the goods ready for caưiage. In any event, the shipper shall deliver the goods in such
condition that they will withstand the intended carriage, including their loading,
handling, stowing, lashing and securing, and unloading, and that they will not cause
harm to persons or property.

2. The shipper shall properly and carefully perform any obligation assumed under
an agreement made pursuant to article 13, paragraph 2.

3. W hen a Container is packed or a vehicle is loaded by the shipper, the shipper

shall properly and carefully stow, lash and secure the contents in or on the
Container or vehicle, and in such a w a y that th e y w ill not cause harm to persons or
property.

Article 28
Cooperation o f the shipper and the carrier in providing information and
instructions

The carrier and the shipper shall respond to requests from each other to provide
information and instructions required for the proper handling and carriage o f the
goods if the information is in the requested party’s possession or the instructions are
within the requested party’s reasonable ability to provide and they are not othenvise
reasonably available to the requesting party.

Article 29
Shipper s’ obligation to provide information, instructions and documents

1. The shipper shall provide to the carrier in a timely manner such iníormation,
instructions and documents relating to the goods that are not othenvise reasonably
available to the caưier, and that are reasonably necessary:
(a) For the proper handling and caưiage o f the goods, including precautions to
be taken by the carrier or a performing party; and
{b) For the carrier to comply with law, regulations or other requirements of
public authorities in connection with the intended carriage, provided that the caưier
notiĩies the shipper in a timely manner o f the information, instructions and documents
it requires.
2. Nothing in this article affects any speciĩic obligation to provide certain
information, instructions and documents related to the goods pursuant to law,

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regulations or other requirem ents of public authorities in connection with the

intended carriage.

Article 30
Basis o f shipper s’ liability to the carrier

1. The shipper is liable for loss or damage sustained by the caưier if the carrier
proves that such loss or damage was caused by a breach o f the shipper’s obligations
under this Convention.

2. Except in respect o f loss or damage caused by a breach by the shipper o f its

obligations pursuant to articles 31, paragraph 2, and 32, the shipper is relieved o f all
or part o f its liability if the cause or one of the causes of the loss or damage is not
attributable to its fault or to the fault o f any person refeưed to in article 34.

3. When the shipper is relieved o f part o f its liability pursuant to this article, the
shipper is liable only for that part o f the loss or damage that is attributable to its fault
or to the fault o f any person referred to in article 34.

Article 31
In/ormation fo r compilation o f contract particulars

1. The shipper shall provide to the carrier, in a timely manner, accurate information
required for the compilation o f the contract particulars and the issuance of the transport
documents or electronic transport records, including the particulars refeưed to in article
36, paragraph 1; the name o f the party to be identified as the shipper in the contract
particulars; the name of the consignee, if any; and the name o f the person to whose
order the transport document or electronic transport record is to bc issued, if any.

2. The shipper is deemed to have guaranteed the accuracy at the time o f receipt by
the carrier of the infonnation that is provided accorđing to paragraph 1 o f this article.
The shipper shall indemniíy the caưier against loss or damage resulting from the
inaccuracy o f such information.

Article 32
Special rules on dangerous goods
When goods by their nature or character are, or reasonably appear likely to
become, a danger to persons, property or the environment:
(ữ) The shipper shall iníbrm the caưier o f the dangerous nature or character of
the goods in a timely manner before they are delivered to the carrier or a períorming
party. If the shipper fails to do so and the carrier or performing party does not othenvise
have knowledge o f their dangerous nature or character, the shipper is liable to the
carrier for loss or damage resulting from such íailure to inform; and
(6) The shipper shall mark or label dangerous goods in accordance with any
law, regulations or other requirements of public authorities ihat apply during any stage
o f the intended carriage o f the goods. If the shipper fails to do so, it is liable to the
caưier for loss or damage resulting from such failure.

Article 33
Assumption o f shipper ’s rights and obligations by the documentaty shipper
1. A documentary shipper is subject to the obligations and liabilities imposed on
the shipper pursuant to this chapter and pursuant to article 55, and is entitled to the
shipper’s rights and defences provided by this chapter and by chapter 13.

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2. Paragraph 1 o f this article does not aíĩect the obligations, liabilities, rights or
defences o f the shipper.

Article 34
Liability o f the shipper fo r other persons
The shipper is liable for the breach of its obligations under this Convention
caused by the acts or omissions of any person, including employees, agents and
subcontractors, to which it has entrusted the períormance o f any o f its obligations,
but the shipper is not liable for acts or omissions o f the caưier or a perfonning party
acting on behalf o f the carrier, to which the shipper has entrusted the performance of
its obligations.

Chapter 8
Transport documents and electronic transport records

Article 35
Issuance o f the transport document or the eìectronic transport record
Unless the shipper and the carrier have agreed not to use a transport document or
an electronic transport record, or it is the custom, usage or practice o f the trade not to
use one, upon delivery o f the goods for carriage to the caưier or performing party, the
shipper or, if the shipper consents, the documentary shipper, is entitled to obtain from
the caưier, at the shipper’s option:
(a) A non-negotiable transport document or, subject to article 8, subparagraph
(a), a non-negotiable electronic transport record; or
(b) An appropriate negotiable transport document or, subject to article 8,
subparagraph (a), a negotiable electronic transport record, unless the shipper and the
carrier have agreed not to use a negotiable transport document or negotiable electronic
transport record, or it is the custom, usage or practice o f the trade not to use one.

Article 36
Contract particulars
1. The contract particulars in the transport document or electronic transport
record refeired to in article 35 shall include the following infonTiation, as fumished
by the shipper:
(a) A description o f the goods as appropriate for the transport;
(ố) The leading marks necessary for identiĩication o f the goods;
(c) The number o f packages or pieces, or the quantity o f goods; and
{d) The vveight o f the goods, if íUmished by the shipper.
2. The contract particulars in the transport document or electronic transport
record refeưed to in article 35 shall also include:
(a) A statement o f the apparent order and condition of the goods at the time the
caưier or a performing party receives them for caưiage;
{b) The name and address o f the carrier;
(c) The date on which the caưier or a performing party received the goods, or
on which the goods were loaded on board the ship, or on which the transport document
or electronic transport record was issued; and
{d) If the transport document is negotiable, the number o f originals o f the
negotiable transport document, when more than one original is issued.

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3. The contract particulars in the transport document or electronic transport

record reíerred to in article 35 shall íurther include:
(a) The name and address o f the consignee, if named by the shipper;
{b) The name o f a ship, if specified in the contract of carriage;
(c) The place o f receipt and, if known to the caưier, the place o f delivery; and
(d) The port o f loading and the port o f discharge, if specified in the contract o f
carriage.

4. For the purposes o f this article, the phrase “apparent order and condition o f the
goods” in subparagraph 2 (a) of this article refers to the order and condition o f the
goods based on:
(a) A reasonable extemal inspection o f the goods as packaged at the time the
shipper delivers them to the caưier or a perfonning party; and
(b) Any additional inspection that the caưier or a perfomiing party actually
performs before issuing the transport document or electronic transport record.

Article 37
Identity o f the carrier
1. If a carrier is identiĩied by name in the contract particulars, any other information
in the transport document or electronic transport record relating to the identity o f the
carrier shall have no eíTect to the extent that it is inconsistent with that identification.

2. If no person is identiĩied in the contract particulars as the caư ier as required

pursuant to article 36, subparagraph 2 {h), but the contract particulars indicate that the
goods have been loaded on board a named ship, the registered owner oí'that ship is
presumed to be the carrier, unless it proves that the ship was under a bareboat charter at
the time of the caưiage and it identifies this bareboat charterer and indicates its address,
in which case this bareboat charterer is presumed to be the canier. Altematively, the
registered owner may rebut the presumption o f being the carrier by identilying the
carrier and indicating its address. The bareboat charterer may rebut any presumption
o f being the caưier in the same manner.

3. Nothing in this article prevents the claimant from proving that any person other
than a person identified in the contract particulars or pursuant to paragraph 2 o f this
article is the canier.

Article 38
Signature
1. A transport document shall be signed by the caưier or a person acting on its
behalf.

2. An electronic transport record shall include the electronic signature of the caưier
or a person acting on its behalf. Such electronic signature shall identify the signatory
in relation to the electronic transport record and indicate the carrier’s authorization o f
the electronic transport record.

Article 39
Deficiencies in the contract particulars
1. The absence or inaccuracy o f one or more o f the contract particulars refeưed to
in article 36, paragraphs 1,2 or 3, does not of itself affect the legal character or validity
o f the transport document or o f the electronic transport record.

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2. lf the contract particulars include the date but fail to indicate its signiíĩcance, the
date is deemed to be:
(a) The date on which all of the goods indicated in the transport document or
electronic transport record were loaded on board the ship, if the contract particulars
indicate that the goods have been loaded on board a ship; or
(h) The date on which the carrier or a performing party received the goods,
if the contract particulars do not indicate that the goods have been loaded on board a
ship.

3. If the contract particulars fail to State the apparent order and condition o f the goods
at the time the carrier or a performing party receives them, the contract particulars are
deemed to have stated that the goods were in apparent good order and condition at the
time the carrier or a performing party received them.

Article 40
Qualifỳing the inýormation relating to the goods in the contract particulars
1. The carrier shall qualiíy the information reíeưed to in article 36, paragraph 1,
to indicate that the caưier does not assume responsibility for the accuracy o f the
information fumished by the shipper if:
(ữ) The caưier has actual knowledge that any material statement in the transport
document or electronic transport record is false or misleading; or
{b) The caưier has reasonable grounds to believe that a material statement in
the transport document or electronic transport record is tầlse or misleading.

2. Without prejudice to paragraph 1 o f this article, the carrier may qualiíỳ the
information referred to in article 36, paragraph 1, in the circumstances and in the
manner set out in paragraphs 3 and 4 o f this article to indicate that the carrier does not
assume responsibility for the accuracy o f the infonnation fumished by the shipper.

3. When the goods are not delivered for caưiage to the carrier or a perfonning party
in a closed Container or vehicle, or when they are delivered in a closed Container or
vehicle and the carrier or a performing party actually inspects them, the carrier may
qualiíy the information referred to in article 36, paragraph 1, if;
{a) The caưier had no physically practicable or commercially reasonable
means o f checking the iníormation fumished by the shipper, in which case it may
indicate which information it was unable to check; or
{b) The caưier has reasonable grounds to believe the information fumished by
the shipper to be inaccurate, in which case it may include a clause providing what it
reasonably considers accurate information.

4. When the goods are delivered for carriage to the carrier or a performing party in
a closed Container or vehicle, the caưier may qualify the information refeưed to in;
(a) Article 36, subparagraphs 1 {à), (b), or (c), if:
(i) The goods inside the Container or vehicle have not actually been inspected
by the carrier or a performing party; and
(ii) Neither the carrier nor a performing party othenvise has actual knovvledge
o f its contents before issuing the transport document or the electronic transport
record; and
(b) Article 36, subparagraph 1 (d), if;

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(i) Neither the caưier nor a perfonning party weighed the Container or vehicle,
and the shipper and the carrier had not agreed prior to the shipment that the
Container or vehicle would be weighed and the weight would be included in the
contract particulars; or
(ii) There was no physically practicable or commercially reasonable means o f
checking the weight o f the Container or vehicle.

Article 41
Evìdentiary effect o f the contract particiilars
Except to the extent that the contract particulars have been qualified in the
circumstances and in the manner set out in article 40:
{a) A transport document or an electronic transport record is prima facie
evidence of the caư ier’s receipt o f the goods as stated in the contract particulars;
(ố) Proof to the contrary by the caưier in respect o f any contract particulars
shall not be admissible, when such contract particulars are included in:
(i) A negotiable transport document or a negotiable electronic transport record
that is transíerred to a third party acting in good faith; or
(ii) A non-negotiable transport document that indicates that it must be
suưendered in order to obtain delivery of the goods and is transferred to the
consignee acting in good faith;
(c) Proof to the contrary by the carrier shall not be admissible against a
consignee that in good faith has acted in reliance on any of the following contract
particulars included in a non-negotiable transport document or a non-negotiable
electronic transport record:
(i) The contract parliculars reíerred to in article 36, paragraph 1, when such
contracl particulars are íumished by the carrier;
(ii) The number, type and identifying numbers o f the containers, but not the
identifying numbers o f the Container seals; and

(iii) The contract particulars referred to in articỉe 36, paragraph 2,

Article 42
“Freight prepaid”
lf the contract particulars contain the statement “freight prepaid” or a statement
o f a similar nature, the carrier cannot assert against the holder or the consignee the
tầct that the ữeight has not been paid. This article does not apply if the holder or the
consignee is also the shipper.

Chapter 9
Delivery of the goods

Article 43
Obligation to accept delivery
When the goods have aưived at their destination, the consignee that demands
delivery of the goods under the contract o f caưiage shall accept delivery o f the goods
at the time or within the time period and at the location agreed in the contract o f
carriage or, failing such agreement, at the time and location at which, having regard
to the teưns of the contract, the customs, usages or practices o f the trade and the
circumstances of the caưiage, delivery could reasonably be expected.

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Article 44
Obligation to acknowledge receipt
On request of the caưier or the performing party that delivers the goods, the
consignee shall acknovvledge receipt o f the goods from the caưier or the períonning
party in the manner that is customary at the place o f delivery. The carrier may refuse
delivery if the consignee refuses to acknowledge such receipt.

Article 45
Delivery when no negotiable transport document or negotiabỉe eỉectronic tramport
record is issued
When neither a negotiable transport document nor a negotiable electronic
transport record has been issued:
(a) The carrier shall deliver the goods to the consignee at the time and location
reíerred to in article 43. The carrier may refuse delivery if the person claiming to be
the consignee does not properly identify itself as the consignee on the request of the
carrier;
(h) If the name and address o f the consignee are not refeưed to in the contract
particulars, the controlling party shall prior to or upon the arrival o f the goods at the
place o f destination advise the carrier o f such name and address;
(c) Without prejudice to article 48, paragraph 1, if the goods are not deliverable
because (i) the consignee, aíter having received a notice o f arrival, does not, at the time
or vvithin the time period refeưed to in article 43, claim delivery o f the goods from
the caưier after their arrival at the place o f destination, (ii) the caưier refuses delivery
because the person claiming to be the consignee does not properly identiíy itself as the
consignee, or (iii) the carrier is, after reasonable elTort, unable to locate the consignee
in order to request delivery instructions, the carrier may so advise the controlling party
and request instructions in respect o f the delivery o f the goods. If, after reasonable
eíTort, the carrier is unable to locate the controlling party, the carrier may so advise
the shipper and request instmctions in respect o f the delivery o f the goods. If, after
reasonable eíTort, the caưier is unable to locate the shipper, the carrier may so advise the
documentary shipper and request instructions in respect o f the delivery o f the goods;
(d) The carrier that delivers the goods upon instruction o f the controlling party,
the shipper or the documentary shipper pursuant to subparagraph (c) o f this article is
discharged from its obligations to deliver the goods under the contract o f carriage.

Articỉe 46
Delivery when a non-negotiable tram port document that requires surrender
is issued
When a non-negotiable transport document has been issued that indicates that it
shall be surrendered in order to obtain delivery o f the goods:
(a) The carrier shall deliver the goods at the time and location reíerred to in
article 43 to the consignee upon the consignee properly identiíying itseiron the request
o f the carrier and surrender o f the non-negotiable document. The carrier may reíuse
delivery if the person claiming to be the consignee fails to properly identiíy itselí on
the request o f the caưier, and shall refuse delivery if the non-negotiable document is
not surrendered. If more than one original o f the non-negotiable document has been
issued, the suưender o f one original will sulTice and the other originals cease to have
any eíTect or validity;
(b) Without prejudice to article 48, paragraph 1, if the goods are not deliverable
because (i) the consignee, after having received a notice o f aưival, does not, at the time

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or within the time period referred to in article 43, claim delivery of the goods from
the caưier after their aưival at the place of destination, (ii) the carrier refuses delivery
because the person claiming to be the consignee does not properly identiíy itselt'as the
consignee or does not surrender the document, or (iii) the carrier is, after reasonable
eíTort, unable to locate the consignee in order to request delivery instructions, the
carrier may so advise the shipper and request instructions in respect o f the delivery
o f the goods. If, after reasonable eíĩort, the carrier is unable to locate the shipper, the
carrier may so advise the documentary shipper and request instructions in respect o f
the delivery o f the goods;
(c) The carrier that delivers the goods upon instruction o f the shipper or the
documentary shipper pursuant to subparagraph {h) o f this article is discharged from its
obligation to deliver the goods under the contract o f caưiage, iưespective of whether
the non-negotiable transport document has been surrendered to it.

Artỉcle 47
Delivery when a negotiahle transport document or negotìahle electronic transport
record is issued
1. When a negotiable transport document or a negotiable electronic transport record
has been issued:
(a) The holder o f the negotiable transport document or negotiable electronic
transport record is entitled to claim delivery o f the goods from the carrier after they
have aưived at the place of destination, in which event the carrier shall deliver the
goods at the time and location refeưed to in article 43 to the holder:
(i) upon surrender o f the negotiable transport document and, if the holder is
one o f the persons refeưed to in article 1, subparagraph 10 (a) (i), upon the
holder properly identifying itself; or
(ii) Upon demonstration by the holder, in accordance with the procedures
refeưed to in article 9, paragraph 1, that it is the holder of the negotiable electronic
transport record;
(b) The carrier shall refuse delivery if the requirements o f subparagraph (a) (i)
or {à) (ii) o f this paragraph are not met;
(c) lf more than one original o f the negotiable transport document has been
issued, and the number o f originals is stated in that document, the suưerider of oiie
original will suữĩce and the other originals cease to have any eíTect or validity. When
a negotiable electronic transport record has been used, such electronic transport record
ceases to have any eữect or validity ưpon delivery to the holder in accordance with the
procedures required by article 9, paragraph 1.

2. Without prejudice to article 48, paragraph 1, ifthe negotiable transport document

or the negotiable electronic transport record expressly states that the goods may be
delivered without the suưender o f the transport document or the electronic transport
record, the tbllowing rules apply:
(a) lf the goods are not deliverable because (i) the holder, after having received
a notice o f arrival, does not, at the time or vvithin the time period referred to in article
43, claim delivery o f the goods from the carrier after their aưival at the place o f
destination, (ii) the caưier reíuses delivery because the person claiming to be a
holder does not properly identiíy itself as One o f the persons refeưed to in article
1, subparagraph 10 (a) (i), or (iii) the caưier is, after reasonable eíTort, unable to
locate the holder in order to request delivery instructions, the carrier may so advise
the shipper and request instructions in respect o f the delivery o f the goods. If, after
reasonable effort, the carrier is unable to locate the shipper, the caưier may so advise

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the documentary shipper and request instructions in respect of the delivery o f the
goods;
(h) The carrier that delivers the goods upon instruction o f the shipper or the
documentary shipper in accordance with subparagraph 2 (a) o f this article is discharged
from its obligation to deliver the goods under the contract o f caưiage to the holder,
irrespective of whether the negotiable transport document has been surrendered to
it, or the person claiming delivery under a negotiable electronic transport record has
demonstrated, in accordance with the procedures reíerred to in article 9, paragraph 1,
that it is the holder;
(c) The person giving instructions under subparagraph 2 (a) of this article
shall indemnify the carrier against loss arising from its being held liable to the
holder under subparagraph 2 (e) o f this article. The carrier may refuse to follow
those instructions if the person fails to provide adequate security as the carrier may
reasonably request;
(d) A person that becomes a hoider of the negotiable transport document or
the negotiable electronic transport record after the caưier has delivered the goods
pursuant to subparagraph 2 {b) of this article, but pursuant to contractual or other
arrangements made before such delivery acquires rights against the carrier under the
contract of caưiage, other than the right to claim delivery o f the goods;
(e) Notwithstanding subparagraphs 2 {b) and 2 {d) o f this article, a holder that
becomes a holder after such delivery, and that did not have and could not reasonably
have had knowledge o f such delivery at the time it became a holder, acquires the rights
incorporated in the negotiable transport document or negotiable electronic transport
record. When the contract particulars State the expected time o f arrival o f the goods,
or indicate how to obtain information as to \vhether the goods have been delivered, it
is presumed that the holder at the time that it became a holder had or could reasonably
have had knowledge of the delivery of the goods.

Article 48
Goods remainiìig undelivered
1. For the purposes of this article, goods shall be deemed to have remained
undelivered only if, after their arrival at the place o f destination;
(a) The consignee does not accept delivery o f the goods pursuant to this chapter
at the time and location referred to in article 43;
(b) The controlling party, the holder, the shipper or the documentary shipper
cannot be found or does not give the carrier adequate instructions pursuant to articles
45, 46 and 47;
(c) The caưier is entitled or required to refuse delivery pursuant to articles 44,
45, 46 and 47;
(d) The caưier is not allovved to deliver the goods to the consignee pursuant to
the law or regulations o f the place at which delivery is requested; or
(e) The goods are othenvise undeliverable by the carrier.

2. Without prejudice to any other rights that the carrier may have against the shipper,
controlling party or consignee, if the goods have remained undelivered, the caưier
may, at the risk and expense of the person entitled to the goods, take such action in
respect o f the goods as circumstances may reasonably require, including:
(a) To store the goods at any suitable place;
(h) To unpack the goods if they are packed in containers or vehicles, or to act
othenvise in respect of the goods, including by moving them; and

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íc) To cause the goods to be sold or destroyed in accordance with the practices
or pursuant to the law or regulations o f the place where the goods are located at the
ti me.
3. The carrier may exercise the rights unđer paragraph 2 o f this article only after it
has given reasonable notice o f the intended action under paragraph 2 o f this article to
the person stated in the contract particulars as the person, if any, to be notified of the
arrival of the goods at the place o f destination, and to one o f the following persons in
the order indicated, if known to the caưier: the consignee, the controlling party or the
shipper.

4. If the goods are sold pursuant to subparagraph 2 (c) o f this article, the carrier
shall hold the proceeds o f the sale for the benefit o f the person entitled to the goods,
subject to the deduction o f any costs incurred by the caưier and any other amounts that
are due to the carrier in connection with the carriage o f those goods.

5. The caưier shall not be liable for loss of or damage to goods that occurs during
the time that they remain undelivered pursuant to this article unless the claimant
proves that such loss or damage resulted from the failure by the caưier to take steps
that would have been reasonable in the circumstances to preserve the goods and that
the carrier knew or ought to have known that the loss or damage to the goods would
result from its failure to take such steps.

Article 49
Retention o f goods
Nothing in this Convention aíTects a right o f the carrier or a períbrming party
that may exist pursuant to the contract o f caưiage or the applicable law to retain the
goods to secure the payment of sums due.

Chapter 10
Rights of the controUing party

Article 50
Exercise and extent ofright o f controì
1. The right o f control may be exercised only by the controlling party and is
limited to:
(a) The right to give or modify instructions in respect o f the goods that do not
constitute a variation o f the contract of carriage;
(b) The right to obtain delivery o f the goods at a scheduled port o f call or, in
respect o f inland carriage, any place en route; and
(c) The right to replace the consignee by any other person including the
controlling paity.

2. The right o f control exists during the entire period o f responsibility o f the caưier,
as provided in article 12, and ceases when that period expires.

Article 51
Identity o f the controlling party and trans/er o f the right o f controì
1. Except in the cases referred to in paragraphs 2, 3 and 4 o f this article:
(a) The shipper is the controlling party unless the shipper, when the contract of
caưiage is concluded, designates the consignee, the documentary shipper or another
person as the controlling party;

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(b) The controlling party is entitled to transfer the right o f control to

another person. The transíer becomes effective with respect to the carrier upon
its notiĩication o f the transfer by the transferor, and the transferee becomes the
controlling party; and
(c) The controlling party shall properly identiíy itself when it exercises the right
o f control.
2. When a non-negotiable transport document has been issued that indicates that it
shaỉl be surrendered in order to obtain delivery of the goods:
(a) The shipper is the controlling party and may transfer the right o f control to
the consignee named in the transport document by transíeưing the document to that
person without endorsement. If more than one original o f the document was issued, all
originals shall be transferred in order to effect a transfer o f the right of control; and
(b) In order to exercise its right of control, the controlling party shall produce
the document and properly identify itself. If more than one original o f the document
was issued, all originals shall be produced, failing which the right o f control cannot be
exercised.

3. When a negotiable transport document is issued;

(a) The holder or, if more than one original o f the negotiable transport document
is issued, the holder o f all originals is the controlling party;
(b) The holder may transfer the right o f control by transfeưing the negotiable
transport document to another person in accordance with article 57. If more than one
original o f that document was issued, all originals shall be transferred to that person in
order to effect a transfer o f the right of control; and
(c) In order to exercise the right o f control, the holder shall produce the
negotiable transport document to the carrier, and if the holder is one of the persons
reíerred to in article 1, subparagraph 10 (a) (i), the holder shall properly identiíy itselí.
If more than one original o f the document was issued, all originals shall be produced,
failing which the right o f control cannot be exercised.

4. When a negotiable electronic transport record is issued:

(a) The holder is the controlling party;
(b) The holder may transfer the right o f control to another person by transfeưing
the negotiable electronic transport record in accordance with the procedures refeưed
to in article 9, paragraph 1; and
(c) In order to exercise the right o f control, the holder shall demonstrate, in
accordance with the procedures refeưed to in article 9, paragraph 1, that it is the
holder.

Article 52
Carrier ’s execution o f instructions
1. Subject to paragraphs 2 and 3 o f this article, the caưier shall execute the
instructions referred to in article 50 if:
(a) The person giving such instructions is entitled to exercise the right of
control;
(b) The instructions can reasonably be executed according to their terms at the
moment that they reach the carrier; and
(c) The instructions will not interíere with the normal operations of the carrier,
including its delivery practices.

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2. In any event, the controlling party shall reim burse the carrier for any
reasonable additional expense that the carrier may incur and shall indemnify the
carrier against loss or damage that the carrier may suffer as a result of diligently
executing any instruction pursuant to this article, including compensation that
the carrier may become liable to pay for loss o f or damage to other goods being
carried.

3. The carrier is entitled to obtain security from the controlling party

for the amount o f additional expense, loss or damage that the carrier reasonably
expects will arise in connection with the execution o f an instruction pursuant to
this article. The carrier may refuse to carry out the instructions if no such security
is provided.

4. The carrier’s liability for loss o f or damage to the goods or for deiay in
delivery resulting from its failure to comply with the instructions o f the controlling
party in breach o f its obligation pursuant to paragraph 1 of this article shall be subject
to articles 17 to 23, and the amount of the compensation payable by the caưier shall
be subject to articles 59 to 61.

Article 53
Deemed delivety
Goods that are delivered pursuant to an instruction in accordance with article 52,
paragraph 1, are deemed to be delivered at the place o f destinalion, and the provisions
o f chapter 9 relating to such delivery apply to such goods.

Article 54
Variations to the contract o f carriage
1. The controlling party is the only person that may agree vvith the caưier to variations
to the contract of caưiage other than those reíerred to in article 50, subparagraphs 1 {h)
and (c).

2. Variations to the contract o f carriage, including those refeưed to in article 50,

subparagraphs 1 ( b ) and (r), shall be stated in a negotiable transport dociiment or
in a non-negotiable transport document that requires suưender, or incorporated in a
negotiable electronic transport record, or, upon the request of the controlling party,
shall be stated in a non-negotiable transport document or incorporated in a non-
negotiable electronic transport record. If so stated or incorporated, such variations
shall be signed in accordance with article 38.

Article 55
Providing additional in/ormation, insírucíions or documents to carrier
1. The controlling party, on request o f the carrier or a performing party, shall
provide in a timely manner iníòrmation, instructions or documents relating to the
goods not yet provided by the shipper and not otherwise reasonably available to
the carrier that the carrier may reasonably need to perform its obligations under the
contract o f carriage.

2. If the carrier, after reasonable effort, is unable to locate the controlling party
or the controlling party is unable to provide adequate infonĩiation, instructions or
documents to the carrier, the shipper shall provide them. If the carrier, after reasonable
eíĩort, is unable to locate the shipper, the documentary shipper shall provide such
information, instructions or documents.

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Articỉe 56
Variation hy agreement
The parties to the contract o f carriage may vary the eíTect o f articles 50,
subparagraphs 1 {b) and (c), 50, paragraph 2, and 52. The parties may also restrict
or exclude the transferability o f the right o f control referred to in article 51,
subparagraph 1 {b).

Chapter 11
Transfer of rights

Article 57
When a negotiahle tram port document or negotiabỉe electronic transport record is
issued
1. When a negotiable transport document is issued, the holder may transfer the
rights incorporated in the document by transferring it to another person:

(a) Duly endorsed either to such other person or in blank, if an order

document; or

(h) Without endorsement, if: (i) a bearer document or a blank endorsed

document; or (ii) a document made out to the order o f a named person and the transfer
is between the first hoider and the named person.

2. When a negotiable electronic transport record is issued, its holder may transfer
the rights incorporated in it, whether it be made out to order or to the order o f a
named person, by transferring the electronic transport record in accordance with the
procedures referred to in article 9, paragraph 1.

Article 58
Liahility o f holder

1. Without prejudice to article 55, a holder that is not the shipper and that does not
exercise any right under the contract o f carriage does not assume any liability under
the contract o f caưiage solely by reason o f being a holder.

2. A holder that is not the shipper and that exercises any right under the contract
of carriage assumes any liabilities imposed on it under the contract o f carriage to the
extent that such liabilities are incorporated in or ascertainable from the negotiable
transport document or the negotiable electronic transport record.

3. For the purposes o f paragraphs 1 and 2 o f this article, a holder that is not the
shipper does not exercise any right under the contract o f carriage solely because:
(a) It agrees with the carrier, pursuant to article 10, to replace a negotiable
transport document by a negotiable electronic transport record or to replace a negotiable
electronic transport record by a negotiable transport document; or
(b) It transfers its rights pursuant to article 57.

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Chapter 12
Limits o f liability

Article 59
Limits o f liabilitv

1. Subject to articles 60 and 61, paragraph 1, the caưier’s liability for breaches of
its obligations under this Convention is limited to 875 units o f account per package or
other shipping unit, or 3 units o f account per kilogram of the gross weight o f the goods
that are the subject o f the claim or dispute, whichever amount is the higher, except
when the value o f the goods has been declared by the shipper and included in the
contract particulars, or when a higher amount than the amount o f limitation o f liability
set out in this article has been agreed upon between the caưier and the shipper.

2. When goods are carried in or on a Container, pallet or similar article o f transport

used to consolidate goods, or in or on a vehicle, the packages or shipping units
enumerated in the contract particulars as packed in or on such article o f transport or
vehicle are deemed packages or shipping units. If not so enumerated, the goods in or
on such article o f transport or vehicle are deemed one shipping unit.

3. The unit o f account refeưed to in this article is the Special Dravving Right as
deĩined by the International Monetary Fund. The amounts referred to in this article
are to be converted into the national currency of a State according to the value o f such
cuưency at the date o f judgement or award or Ihe date agreed upon by the parties. The
value o f a national currency, in ternis o f the Special Dravving Right, o f a Contracting
State that is a member o f the International Monetary Fund is to be calculated in
accordance with the method o f valuation applied by the International Monetary Fund
in eíTect at the date in question íbr its operations and transactions. The value of a
national currency, in terms o f the Special Drawing Right, of a Contracting State that
is not a member o f the International Monetary Fund is to be calculated in a manner to
be determined by that State.

Articỉe 60
Limits o f liahility fo r loss caused bv delay

Siibject to article 61, paragraph 2, compensation for loss o f or damage to the

goods due lo delay shall be calculateđ in accordance with article 22 and liability for
economic loss due to delay is limited to an amount equivalent to two and one-halí'
times the freight payable on the goods delayed. The total amount payable pursuant
to this article and article 59, paragraph 1, may not exceed the limit that would be
established pursuant to article 59, paragraph 1, in respect o f the total loss o f the goods
concemed.

Article 61
Loss ofthe benẹfit oflimiíation ofliabilitv

1. Neither the carrier nor any o f the persons refeưed to in article 18 is entitled to
the benefit o f the limitation of liability as provided in article 59, or as provided in the
contract o f caưiage, if the claimant proves that the loss resulting from the breach of
the carrier’s obligation under this Convention was attributable to a personal act or
omission o f the person claiming a right to limit done with the intent to cause such loss
or recklessly and with knowledge that such loss would probably result.

2. Neither the caưier nor any of the persons mentioned in article 18 is entitled to the
benefit of the limitation o f liability as provided in article 60 if the claimant proves that

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the delay in delivery resulted from a personal act or omission o f the person claiming a
right to limit done with the intent to cause the loss due to delay or recklessly and with
knovvledge that such loss would probably result.

Chapter 13
Time for suit

Article 62
Period o f time for suit

1. No judicial or arbitral proceedings in respect o f claims or disputes arising from

a breach of an obligation under this Convention may be instituted after the expiration
o f a period o f two years.

2. The period reíerred to in paragraph 1 o f this article commences on the day on

vvhich the carrier has delivered the goods or, in cases in which no goods have been
delivered or only part o f the goods have been delivered, on the last day on which the
goods should have been delivered. The day on which the period commences is not
included in the period.

3. Notwithstanding the expiration o f the period set out in paragraph 1 of this article,
one party may rely on its claim as a defence or for the purpose o f set-ofĩ against a
claim asserted by the other party.

Article 63
Exíension o f time for suit

The period provided in article 62 shall not be subject to suspension or interruption,

but the person against which a claim is made may at any time during the running o f the
period extend that period by a declaration to the claimant. This period may be further
extended by another declaration or declarations.

Article 64
Action for indemnity

An action for indemnity by a person held liable may be instituted after the
expiration o f the period provided in article 62 if the indemnity action is instituted
within the later of;

(a) The tim e allovved by the applicable law in the jurisdiction where proceedings
are instituted; or
(b) Ninety days commencing from the day when the person instituting the
action for indemnity has either settled the claim or been served with process in the
action against itself, whichever is earlier.

Article 65
Actions against the person identified as the carrier

An action against the bareboat charterer or the person identified as the caưier
pursuant to article 37, paragraph 2, may be instituted after the expiration o f the period
provided in article 62 if the action is instituted within the later of:

(a) The time allovved by the applicable law in the jurisdiction where proceedings
are instituted; or

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(b) Ninety days commencing from the day when the carrier has been identified,
or the registered owner or bareboat charterer has rebutted the presumption that it is the
carrier, pursuant to article 37, paragraph 2.

Chapter 14
Juri$diction

Article 66
Actions againsl the carrier

Unless the contract of carriage contains an exclusive choice of court agreement that
complies with article 67 or 72, the plaintiff has the right to institute judicial proceedings
ưnder this Convention against the carrier;
(a) In a competent court within the jurisdiction of which is situated one of the
following places:
(i) The domicile of the carrier;
(ii) The place o f receipt agreed in the contract o f caưiage;
(iii) The place o f delivery agreed in the contract o f carriage; or
(iv) The port where the goods are initially loaded on a ship or the port
where the goods are íìnally discharged írom a ship; or
(h) In a competent court or courts designated by an agreement between the
shipper and the carrier for the purpose of deciding claims against the carrier that
may arise under this Convention.

Articỉe 67
Choice o f court agreements

1. The jurisdiction of a court chosen in accordance with article 66, subparagraph b),
is exclusive for disputes between the parties to the contract only if the parties so agree
and the agreement confeưing jurisdiction:
(a) Is contained in a volume contract that clearly states the names and addresses
o f the parties and either (i) is individually negotiated or (ii) contains a prominent
statement that there is an exclusive choice o f court agreement and specifies the sections
o f the volume contract containing that agreement; and
(b) Clearly designates the courts o f one Contracting State or one or more
speciíìc courts o f one Contracting State.

2. A person that is not a party to the volume contract is bound by an exclusive

choice of cnurt agreernert concluded in accordance with paragrapb 1 o f this article
only if:
(a) The court is in one o f the places designated in article 66,
subparagraph (a);
(h) That agreement is contained in the transport document or electronic
transport record;
(c) That person is given timely and adequate notice of the court where the
action shall be brought and that the jurisdiction o f that court is exclusive; and
(d) The law o f the court seized recognizes that that person may be bound by
the exclusive choice of court agreement.

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Article 68
Actions against the maritime performingparty

The plaintiff has the right to institute judicial proceedings under this Convention
against the maritime performing party in a competent court within the jurisdiction o f
which is situated one o f the following places:
(a) The domicile of the maritime performing party; or
(b) The port where the goods are received by the maritime performing party,
the port where the goods are delivered by the maritime performing party or the port
in which the maritime períoưning party performs its activities with respect to the
goods.

Article 69
No additionaỉ bases o f ịurisdiction

Subject to articles 71 and 72, no judicial proceedings under this Convention

against the caưier or a maritime performing party may be instituted in a court not
designated pursuant to article 66 or 68.

Article 70
Arrest andprovỉsional or protective measures

Nothing in this Convention affects jurisdiction with regard to provisional or

protective measures, including arrest. A court in a State in which a provisional or
protective measure was taken does not have jurisdiction to determine the case upon
its merits unless:
(a) The requirements o f this chapter are fulfilled; or
(h) An intemational convention that applies in that State so provides.

Artícle 71
Consolidation and removal o/actions

1. Except when there is an exclusive choice o f court agreement that is binding

pursuant to article 67 or 72, if a single action is brought against both the carrier and
the maritime performing party arising out of a single occurrence, the action may be
instituted only in a court designated pursuant to both article 66 and article 68. If there
is no such court, such action may be instituted in a court designated pursuant to article
68, subparagraph (ố), if there is such a court.

2. Except when there is an exclusive choice of court agreement that is binding

pursuant to article 67 or 72, a caưier or a maritime performing party that institutes
an action seeking a declaration of non-liability or any other action that would deprive
a person of its right to select the forum pursuant to article 66 or 68 shall, at the
request o f the deíendant, withdraw that action once the defendant has chosen a court
designated pursuant to article 66 or 68, vvhichever is applicable, where the action may
be recommenced.

Aríicle 72
Agreement after a dispute has arisen andjurisdiction whetì the dẹfendant has
entered an appearance

1. After a dispute has arisen, the parties to the dispute may agree to resolve it in any
competent court.

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2. A competent court before which a defendant appears, without contesting

jurisdiction in accordance with the rules o f that court, has jurisdiction.

Article 73
Recognition and en/orcement

1. A decision made in one Contracting State by a court having jurisdiction under

this Convention shall be recognized and enforced in another Contracting State in
accordance with the law o f such latter Contracting State when both States have made
a declaration in accordance with article 74.

2. A court may refuse recognition and enforcement based on the grounds for the
reíusal of recognition and enforcement available pursuant to its law.

3. This chapter shall not affect the application o f the rules of a regional economic
integration organization that is a party to this Convention, as concems the recognition
or enforcement o f judgements as between member States o f the regional economic
integration organization, whether adopted before or after this Convention.

Article 74
Application o f chapter 14

The provisions o f this chapter shall bind only Contracting States that declare in
accordance with article 91 that they will be bound by them.

Chapter 15
Arbitration

Article 75
Arhitration agreements

1.Subject to this chapter, parties may agree that any dispute that may arise relating
to thecaưiage o f goods under this Convention shall be referred to arbitration.

2. The arbitration proceedings shall, at the option o f the person asserting a claim
against the carrier, take place at:
(ứ) Any place designated for that purpose in the arbitration agreement; or
{b) Any other place situated in a State where any of the following places is
located:
(i) The domicile o f the carrier;
(ii) The place o f receipt agreed in the contract ofcaưiage;
(iii) The place o f delivery agreed in the contract of carriage; or
(iv) The port where the goods are initially loaded on a ship or the port
where the goods are finally discharged from a ship.

3. The designation o f the place of arbitration in the agreement is binding for disputes
betvveen the parties to the agreement if the agreement is contained in a volume contract
that clearly states the names and addresses o f the parties and either:

(a) Is individually negotiated; or

(b) Contains a prom inent statement that there is an arbitration agreement

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and specifies the sections o f the volume contract containing the arbitration
agreement.

4. When an arbitration agreement has been concluded in accordance with

paragraph 3 o f this article, a person that is not a party to the volume contract is
bound by the designation o f the place o f arbitration in that agreement only if:
(a) The place o f arbitration designated in the agreement is situated in one of
the places referred to in subparagraph 2 {b) o f this article;
(b) The agreement is contained in the transport document or electronic transport
record;
(c) The person to be bound is given timely and adequate notice o f the place o f
arbitration; and
(d) Applicable law permits that person to be bound by the arbitration
agreement.

5. The provisions o f paragraphs 1,2, 3 and 4 o f this article are deemed to be part of
every arbitration clause or agreement, and any term o f such clause or agreement to the
extent that it is inconsistent therewith is void.

Article 76
Arbitmtion agreement in non-liner transportaíion

1. Nothing in this Convention affects the enforceability o f an arbitration agreement

in a contract o f carriage in non-liner transportation to which this Convention or the
provisions o f this Convention apply by reason of:
(a) The application of article 7; or
(h) The parties’ voluntary incorporation o f this Convention in a contract o f
carriage that would not othenvise be subject to this Convention.

2. Notvvithstanding paragraph 1 o f this article, an arbitration agreement in a

transport document or electronic transport record to which this Convention applies by
reason o f the application o f article 7 is subject to this chapter unless such a transport
document or electronic transport record:
(a) Identifies the parties to and the date o f the charter party or other contract
excluded from the application o f this Convention by reason o f the application of
article 6; and
(b) Incorporates by speciĩic reíerence the clause in the charter party or other
contract that contains the terms of the arbitration agreement.

Article 77
Agreement to arbitrate after a dispute has arisen

Notvvithstanding the provisions o f this chapter and chapter 14, after a dispute has
arisen the parties to the dispute may agree to resolve it by arbitration in any place.

Article 78
Application o f chapíer ì 5

The provisions of this chapter shall bind only Contracting States that declare in
accordance with article 91 that they will be bound by them.

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Chapter 16
Validity of contractual terms

Article 79
General provisions

1. Unless othenvise provided in this Convention, any term in a contract o f carriage

is void to the extent that it:
(a) Directly or indirectly excludes or limits the obligations o f the carrier or a
maritime performing party under this Convention;
(h) Directly or indirectly excludes or limits the liability o f the carrier or a
maritime performing party for breach o f an obligation under this Convention; or
(c) Assigns a benefit o f Insurance o f the goods in favour o f the caưier or a
person refeưed to in article 18.

2. Unless othenvise provided in this Convention, any term in a contract o f carriage

is void to the extent that it:
(a) Directly or indirectly excludes, limits or increases the obligations under
this Convention o f the shipper, consignee, controlling party, holder or documentary
shipper; or
(h) Directly or indirectly excludes, limits or increases the liability of the
shipper, consignee, controlling party, holder or documentary shipper for breach of any
o f its obligations under this Convention.

Article 80
Special rules fo r volume contracts

1. Notwithstanding article 79, as between the carrier and the shipper, a volume
contract to which this Convention applies may provide for greater or lesser rights,
obligations and liabilities than those imposed by this Convention.

2. A derogation pursuant to paragraph 1 o f this articỉe is binding only when:

(a) The volume contract contains a prominent statement that it derogates from
this Convention;
(b) The volume contract is (i) individually negotiated or (ii) prominently
specifies the sections o f the volume contract containing the derogations;
(c) The shipper IS given an opportunity and notice o f the opportunity to conclude
a contract o f caưiage on terms and conditions that comply with this Convention
vvithout any derogation under this article; and
(d) The derogation is neither (i) incorporated by reference from another
documení nor (ii) includcd in a contract o f adhesion that is not subject to
negotiation.

3. A carrier’s public schedule o f prices and services, transport document, electronic

transport record or similar document is not a volume contract pursuant to paragraph 1
o f this article, but a volume contract may incorporate such documents by reĩerence as
terms o f the contract.

4. Paragraph 1 o f this article does not apply to rights and obligations provided in
articles 14, subparagraphs (a) and {b), 29 and 32 or to liability arising from the breach
thereof, nor does it apply to any liability arising from an act or omission reíerred to in
article 61.

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5. The terms of the volume contract that derogate from this Convention, if the
volume contract satisĩies the requirements of paragraph 2 o f this article, apply between
the caưier and any person other than the shipper provided that:
(a) Such person received information that prominently states that the volume
contract derogates from this Convention and gave its express consent to be bound by
such derogations; and
(b) Such consent is not solely set forth in a carrier’s public schedule o f prices
and services, transport document or electronic transport record.

6. The party claiming the benefit o f the derogation bears the burden o f proof that
the conditions for derogation have been fulfilled.

Articỉe 81
Special rules fo r live animaỉs and certain other goods

Notvvithstanding article 79 and without prejudice to article 80, the contract of

caưiage may exclude or limit the obligations or the liability of both the caưier and a
maritime períorming party if:
(a) The goods are live animals, but any such exclusion or limitation w ill not
be effective if the claimant proves that the loss o f or damage to the goods, or delay
in delivery, resulted from an act or omission o f the carrier or o f a person referred
to in article 18, done with the intent to cause such loss o f or damage to the goods
or such loss due to delay or done recklessly and with knowledge that such loss or
damage or such loss due to delay would probably result; or
(h) The character or condition of the goođs or the circumstances and terms
and conditions under which the carriage is to be perfonned are such as reasonably
to justify a special agreement, provided that such contract o f carriage is not related
to ordinary commercial shipments made in the ordinary course o f trade and that no
negotiable transport document or negotiable electronic transport record is issued for
the carriage o f the goods.

Chapter 17
Matters not governed by this convention

Article 82
International conventions governing the carriage o f goods by other modes o f
transport

Nothing in this Convention aữects the application o f any o f the following

intemational conventions in force at the time this Convention enters into force,
including any íìiture amendment to such conventions, that regulate the liability of the
caưier for loss o f or damage to the goods;
(a) Any convention goveming the carriage of goods by air to the extent that
such convention according to its provisions applies to any part o f the contract o f
caưiage;
(b) Any convention goveming the carriage o f goods by road to the extent that
such convention according to its provisions applies to the carriage o f goods that remain
loaded on a road cargo vehicle caưied on board a ship;
(c) Any convention goveming the caưiage of goods by rail to the extent that
such convention according to its provisions applies to carriage o f goods by sea as a
supplement to the carriage by rail; or

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{d) Any convention goveming the carriage o f goods by inland waterways to

the extent that such convention according to its provisions applies to a caưiage o f
goods without trans-shipment both by inland waterways and sea.

Article 83
Global limitation o f liability

Nothing in this Convention aíĩects the application of any intemational convention

or national law regulating the global limitation o f liability o f vessel owners.

Article 84
General average

Nothing in this Convention affects the application o f terms in the contract

o f carriage or provisions o f national law regarding the adjustment o f general
average.

Article 85
Passengers and luggage

This Convention does not apply to a contract o f carriage for passengers and their
luggage.

Article 86
Damage caused hy nuclear incident
No liability arises under this Convention for damage caused by a nuclear incident
if the operator of a nuclear installation is liable tbr such damage:
(a) Under the Paris Convention on Third Party Liability in the Field of
Nuclear Energy o f 29 July 1960 as amended by the Additional Protocol o f 28 January
1964 and by the Protocols o f 16 November 1982 and 12 Pebruary 2004, the Vienna
Convention on Civil Liability for Nuclear Damage o f 21 May 1963 as amended by
the Joint Protocol Relating to the Application o f the Vienna Convention and the Paris
Convention of21 September 1988 and as amended by the Protocol to Amend the 1963
Vienna Convention on Civil Liability forN uclear Damage of 12 September 1997, or
the Convention on Supplementary Compensation forNuclear Damage o f 12 September
1997, including any amendment to these conventions and any future convention in
respect of the liability o f the operator o f a nuclear installation for damage caused by a
nuclear incident; or
(b) Under national law applicable to the liability for such damage, provided
that such law is in all respects as ĩavourable to persons that may suffer damage
as either the Paris or Vienna Conventions or the Convention on Supplementary
Compensation for N uclear Damage.

Chapter 18
Final clauses

Article 87
Depositary
The Secretary-General of the United Nations is hereby designated as the
depositary o f this Convention.

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Article 88
Signature, ratification, acceptance, approval or accession

1. This Convention is open for signature by all States at Rotterdam, the Netherlands,
on 23 September 2009, and thereafter at the Headquarters o f the United Nations in
New York.

2. This Convention is subject to ratiĩication, acceptance or approval by the signatory

States.

3. This Convention is open for accession by all States that are not signatory States
as from the date it is open for signature.

4. Instruments of ratification, acceptance, approval and accession are to be deposited

with the Secretary-General o f the United Nations.

Article 89
Denunciation o/other conventions

1. A State that ratiĩies, accepts, approves or accedes to this Convention and is a

party to the International Convention for the Unification o f certain Rules o f Law
relating to Bills o f Lading signed at Brussels on 25 August 1924, to the Protocol
to amend the International Convention for the Unification o f certain Rules o f Law
relating to Bills o f Lading, signed at Brussels on 23 Pebruary 1968, or to the Protocol
to amend the International Convention for the Unification o f certain Rules o f Law
relating to Bills o f Lading as Modified by the Amending Protocol of 23 Pebruary
1968, signed at Brussels on 21 December 1979, shall at the same time denounce that
Convention and the protocol or protocols thereto to which it is a party by notifying
the Government o f Belgium to that effect, with a declaration that the denunciation is
to take effect as from the date when this Convention enters into force in respect o f
that State.

2. A State that ratifies, accepts, approves or accedes to this Convention and is a

party to the United Nations Convention on the Caưiage o f Goods by Sea concluded
at Hamburg on 31 March 1978 shall at the same time denounce that Convention by
notifying the Secretary-General of the United Nations to that eíĩect, with a declaration
that the denunciation is to take efifect as from the date when this Convention enters
into force in respect o f that State.

3. For the purposes o f this article, ratifications, acceptances, approvals and

accessions in respect o f this Convention by States parties to the instruments listed
in paragraphs 1 and 2 o f this article that are notiĩied to the depositary after this
Convention has entered into force are not effective until such denunciations as may
be required on the part o f those States in respect o f these instruments have become
effective. The depositary o f this Convention shall consult with the Government of
Belgium, as the depositary o f the instruments referred to in paragraph 1 o f this
article, so as to ensure necessary coordination in this respect.

Article 90
Reservations

No reservation is permitted to this Convention.

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Article 91
Procedure and effect o f declarations

1. The declarations permitted by articles 74 and 78 may be made at any time. The
initial declarations perm itted by article 92, paragraph 1, and article 93, paragraph 2,
shall be made at the time o f signature, ratiíìcation, acceptance, approval or accession.
No other declaration is permitted under this Convention.

2. Declarations made at the time of signature are subject to confirmation upon

ratiĩication, acceptance or approval.

3. Declarations and their confiĩTnations are to be in writing and to be íoưnally

notified to the depositary.

4. A declaration takes eíĩect simultaneously with the entry into force of this
Convention in respect o f the State concemed. However, a declaration o f which the
depositary receives formal notification after such entry into force takes effect on the
first day o f the month following the expiration of six months after the date o f its
receipt by the depositary.

5. Any State that m akes a declaration under this Convention may withdraw it at any
time by a foiTnal notification in writing addressed to the depositary. The withdrawal of
a declaration, or its modification where pennitted by this Convention, takes eíĩect on
the first day o f the month following the expiration o f six months after the date of the
receipt o f the notification by the depositary.

Aríicle 92
Effect in domestlc territorial units

1. If a C ontracting State has two or more territorial units in which different

system s o f law are applicable in relalion to the m atters dealt with in this Conyention,
it may, at the tim e o f signature, ratification, acceptance, approval or accession,
declare that this C onvention is to extend to all its territorial units or only to one or
m ore o f them , and m ay am end its declaration by subm itting another declaration at
any time.

2. These declarations are to be notiíĩed to the depositary and are to State expressly
the territorial units to which the Convention extends.

3. W hen a Contracting State has declared pursuant to this article that this Convention
extends to one or more but not all o f its teưitorial units, a place located in a territorial
unit to which this Convention does not extend is not considered to be in a Contracting
State for the purposes o f this Convention.

4. If a Contracting State makes no declaration pursuant to paragraph 1 o f this article,

the Convention is to extend to all teưitorial units o f that State.

Article 93
Participation by regional economic ỉntegration organizations

1. A regional econom ic integration organization that is constituted by sovereign

States and has com petence over certain matters governed by this Convention may
sim ilarly sign, ratify, accept, approve or accede to this Convention. The regional
econom ic integration organization shall in that case have the rights and obligations
o f a C ontracting State, to the extent that that organization has competence over

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m atters governed by this Convention. When the num ber o f C ontracting States
is relevant in this Convention, the regional econom ic integration organization
does not count as a Contracting State in addition to its m em ber States w hich are
C ontracting States.

2. The regional econom ic integration organization shall, at the tim e o f

signature, ratification, acceptance, approval or accession, m ake a declaration
to the depositary specifying the m atters governed by this C onvention in respect
o f w hich com petence has been transíerred to that organization by its m em ber
States. The regional econom ic integration organization shall prom ptly n o tiíy
the depositary o f any changes to the distribution o f com petence, including
new transfers o f com petence, specified in the d eclaration pursuant to this
paragraph.

3. Any reference to a “Contracting State” or “Contracting States” in this Convention

applies equally to a regional economic integration organization when the context so
requires.
Article 94
Entry into Ịorce

1. This Convention enters into force on the first day o f the month following
the expiration o f one year after the date of deposit o f the twentieth instrument o f
ratification, acceptance, approval or accession.

2. For each State that becomes a Contracting State to this Convention after the
date o f the deposit o f the twentieth instrument o f ratitìcation, acceptance, approval or
accession, this Convention enters into force on the first day o f the month following the
expiration o f one year after the deposit o f Ihe appropriate instrument on behalf o f that
State.

3. Each Contracting State shall apply this Convention to contracts o f carriage

concluded on or after the date o f the entry into force o f this Convention in respect o f
that State.

Article 95
Revision and amendment

1. At the request o f not less than one third o f the Contracting States to this
Convention, the Secretary-General of the United Nations shall convene a conference
o f the Contracting States for revising or amending it.

2. Any instrument o f ratiĩication, acceptance, approval or accession deposited after

the entry into force o f an amendment to this Convention is deemed to apply to the
Convention as amended.

Article 96
Denunciation o f thís Convention

1. A Contracting State may denounce this Convention at any time by means o f a

notiĩication in writing addressed to the depositary.

2. The denunciation takes effect on the first day o f the month following the
expiration o f one year after the notification is received by the depositary. If a longer
period is speciĩied in the notification, the denunciation takes eíTect upon the expiration
o f such longer period after the notification is received by the depositary.

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DONE at New York, this eleventh day o f December two thousand and eight, in a
single original, o f which the Arabic, Chinese, English, Prench, Russian and Spanish
texts are equally authentic.

IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized

by their respective Govemments, have signed this Convention.

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