Charter Party Agreement Meaning

While a party to the charter is the contract between a shipowner and a charterer, a contract of carriage is concluded between the consignor and the carrier. A carrier issues a bill of lading to a shipper, a receipt for the cargo shipped, which also serves as proof of the contract of carriage. (In the case of a charter, the charterer is the carrier; in a time or voyage charter, the shipowner is the carrier). In the case of a bareboat rental, less used in usual commercial practice, the shipowner shall deliver it to the charterer for the agreed period, without crew, warehouse, insurance or other disposition. Contracts may also be subject to a lump sum agreement if an owner agrees to ship from one port to another a certain quantity of a declared cargo for a declared sum of money. If the voyage charter is a mooring charter, nor may only be tendered if the vessel is located next to the intended berth. In each type of charter, charterers and shipowners have different tasks. The voyage instructions shall contain the information contained in the charter contract which requires the agreement of the master and subsequent measures. If the charter is a port charter, NOR may only be tendered if the vessel is at least within the port limits. Normally, in this case, the NOR is tendered when the pilot goes to the ship. There are four main methods to charter a tramp boat - travel charter, time rental, cash boat rental and "package contract".

Travel chartering is the most common. Under this method, a ship is chartered at a negotiated freight rate for a one-way trip between certain ports with a given cargo. In the case of a temporal charter, the charterer shall lease the vessel for a specified period, for a given round trip or, occasionally, for a specified disposable voyage, the rental rate being expressed in quantity per tonne of load capacity per month. Whereas, in the case of a charter trip, the owners bear all the costs of the trip (subject to the agreement on loading and unloading costs), the charterer bears the costs of bunkers and shops consumed during the time charter. For this reason, you will often find even for a trip in 2019 the mention of charter party of 2016 or even before. The bill of lading, which was even issued in 2019, can be such that the charterer can charter and operate the ship for a voyage (charter trip), for a fixed period (time charter), or rent and operate the ship as if he were the owner of the ship (shipwreck or charter bareboat). In the case of a travel charter, the itinerary is agreed in advance and the charterer has little leeway to intervene in the program. On the other hand, the charter is almost one between a shipwreck charter and a voyage charter, since the charterer decides on the voyages and ports and orders the shipowner`s crew to comply with them.

This can lead to compensation problems: while the shipowner assumes responsibility for the ship in a charter of voyage, the shipowner may have to be compensated, in the context of a temporal charter, for losses or debts directly attributable to the charterer.

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