September 5, 2022

Functions of a Vessel Charterer

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A charterer is someone who wants to rent a ship to transport cargo or passengers. The cargo may or may not be the charterer’s property. The charterer may be transporting it for another party. A charterer may sometimes take a vessel on lease and then re-rent it to another party for the transportation of cargo or passengers for a profit. Shipbrokers play an important role in bringing together the right shipowner and charterer and finalizing the terms of their agreement. Typically, someone looking to lease a ship would approach a shipbroker to find the best vessel for their needs.

The charterer plans the ship’s voyage as well as the cargo handling arrangements during loading and unloading. As such, he is responsible for the ship’s, crew’s, and cargo’s safety. The charterer and the shipowner sign the charter party. Click here to find out more on vessel charters Malaysia.

Main Type of Ship Charters

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  1. Voyage charter
  • The most common type of ship charter is this one. A voyage charter typically entails renting the vessel as well as its crew for a specific journey between two or more ports. The rent will be based on the amount or weight of cargo carried on the voyage, or it may be a fixed amount agreed upon between the parties.
  1. Time charter
  • A time charter is when a ship is hired for a specific period of time. The vessel, like in other types of charters, is rented along with the crew for a set period of time. The charter party will clearly state the voyage’s terms and conditions, the agreed-upon period of hire, the type of cargo to be carried, and so on.
  • The charterer of a time charter may pay a daily or monthly rate based on the deadweight tonnage.
  1. Bareboat charter
  • The charterer’s crew and vessel management staff operate and manage the vessel during a bareboat charter. The shipowner will only be responsible for the ship’s technical management and port operations.
  • For the duration of the charter party, the charterer will be responsible for the ship’s safety and all financial settlements with third parties. A demise charter is another name for a bareboat charter.
  1. Charterparty
  • The charter party is a legally binding agreement between the shipowner and the charterer. It specifies both parties’ responsibilities in relation to the ship charter.
  • The charter party must be detailed and cover all aspects of the charter, particularly the charterer’s re-rental of the vessel, the type of cargo to be loaded on the ship, and ports of call.
vessel charters Malaysia

All parties involved in ship chartering should be aware of the various details that go into creating a successful charter party or fixture. Both the shipowner and the charterer must be aware of the other’s background, financial standing, and business reputation.

The charterer should be aware of the cargo-handling capacity of the vessel and its flag, just as the shipowner must be aware of the type of cargo to be carried on the ship and its date of sailing, etc. Before approaching a prospective client, the shipbroker would benefit from knowing all of these details.

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