What is Ship Chartering?
chartering a ship, is renting a whole vessel from its original owner. It may sound straightforward enough, but in reality it’s a complicated role process where there are various charter party contracts, cost components , players involved.
The two main players in ship chartering are the ship owner and the charterer. While the third most important being the ship broker. There is also an agent and a ship manager responsible for essential port details, operating and crewing the vessel on behalf of the owner for a fee.
The charter party is a contract containing the rate, duration, and agreed terms between the charterer and the owner.
Owner looks after transporting the cargo from one port to the other while Charterer enters into a contract with the owner to rent the ship for transporting cargo.
It is not necessary that Charterer has his own cargo, he can also charters a vessel for a certain period of time and trades the ship to carry cargoes at a margin. This means the charterer can also sub-hire in the market.
The ship broker is a middleman who connects the principals at a fee. He can represent either the owner or the charterer in negotiations, and usually specialises in specific areas of cargo carrying. For example, a dry cargo broker focuses on the chartering of bulk carrier vessels. He can represent either an owner looking for a charterer, or a charterer seeking a suitable vessel for shipping his cargo.
Similarly, and as the name suggests, a tanker broker specialises in chartering tanker vessels and has a good understanding of the specific needs for transporting crude oil, gas, oil products, or chemicals.
Shipping Agents are designated to take responsibility for handling shipments and cargoes at the ports on behalf of the owners, fleet managers, and charterers. They handle the essential routine tasks, such as crew transfers, customs documentation, waste declarations and so on, working closely with port authorities. They can also provide detailed information on activities at the destination port, so that the shippers can be aware of situations while the goods are in transit.