Voyage Charter

Malcolm Maclachlan

What is a voyage charter?

Agreement between a shipowner and a

charterer for carriage by a named vessel of a

specified quantity of a specified commodity from
a named place(s) to another named place(s), in
return for agreed sum of freight.
Shipowner pays all vessel operating expenses
(running costs and voyage expenses, except
where otherwise agreed (e.g. FIO terms).
Similar to taxi-cab hire.
Also called spot charter.

Shipowners obligations
1. Bring ship to agreed loading place by midnight on
2.
3.
4.
5.
6.
7.

cancelling date.
Tender NOR as specified in Notice of Readiness Clause
within agreed lay/can period.
Keep ship available to charterer during agreed laytime
period (for charterers port operations).
Load and carry cargo with all possible despatch to
agreed destination.
Tender NOR on arrival at agreed destination if required
by C/P.
Deliver cargo to receiver on presentation of an original
B/L.
Pay all vessel operating expenses and voyage
expenses except whether otherwise agreed.

Charterers obligations
Provide agreed quantity of agreed

commodity for loading at agreed place.

Pay freight as per C/P.
Pay demurrage as per C/P if loading or
discharge time exceeds agreed laytime.
Pay deadfreight on any short-loaded
quantity, if demanded.

Notice of Readiness (NOR)

Notice given by master (or, if C/P allows,

his agent) in accordance with C/P to

charterer (or his agent) that vessel is at
destination specified in C/P and is in every
respect ready to load/discharge.
Valid NOR triggers start of laytime.
Usually in writing, but check NOR Clause!

Laytime

Period of time agreed between shipowner and

charterer during which shipowner will make and keep
vessel available for loading or discharging without
payment additional to freight.
Conditions for commencement:
1.
2.

3.

Vessel is an arrived ship (i.e. at destination specified in C/P,

depending on whether it is a Port C/P or Berth C/P)
Vessel is fully at charterers disposal (i.e. all hold/tank
preparations complete).
C/P NOR provisions have been complied with.

Laytime exceptions & interruptions

Laytime exceptions: Periods agreed not to be counted
as laytime, e.g.:

Shifting from waiting area or berth to final loading berth;

Waiting for first suitable tide;
Bad weather or sea conditions which prevent vessels loading,
discharging or shifting between berths;
SHEX: Sundays and holidays excepted; FHEX;
Rain periods - if laytime specified as weather permitting.

Laytime interruptions: Events which suspend running

of laytime, e.g. pump- or hatch-cover failure. (If FIO,
breakdown of shore equipment does not stop laytime.)

Demurrage & despatch

Demurrage: Sum of liquidated damages

payable by charterer to shipowner for each day

(or part thereof if stipulated), during which ship
is detained beyond expiry of laytime.
Rate per day specified in C/P, e.g. $17,000.
Payable pro rata for part of a day.
Despatch money: Reward paid by shipowner
to charterer, ONLY if provided for in C/P, where
time used for cargo ops was less than laytime
allowed. Traditionally half the demurrage rate.

Statement of facts
Document produced by port agent (from agents port

log) on completion of ships port operations.

Contains all facts needed for calculation of demurrage
(or, if applicable, despatch).
Includes times of arrival, berthing, tendering NOR,
commencement & completion of loading, stoppages due
to weather or other reasons.
Signed by each party (agent + master +
shippers/receivers).
Enables agent to compile a Laytime Statement (showing
any demurrage or despatch money due).

FIO free in and out

Shipowner is free of responsibility for, and costs

of, loading and discharge.

Charterer benefits from reduced freight rate.
Usual in dry bulk trades, since cargo loading &
discharge equipment, personnel, etc. is arranged
by shipper, consignee or charterer not by
shipowner.

Port & berth charterparties

Port C/P: Terms provide that vessel shall tender Notice

of Readiness at a specified port but does not nominate a

particular berth in that port.
Obliges the vessel to reach jurisdictional limits of
specified port before she can be considered an arrived
ship.
Better for shipowner than a Berth C/P!
Berth C/P: Terms provide that vessel shall tender
Notice of Readiness at a specified berth or one safe
berth at a specified port or place.
Puts risks of delay (e.g. due to port congestion) onto
shipowner.
Less favourable to shipowner.
Look for wipon, wibon, wccon, wifpon in NoR Clause!

Wipon, wibon, wccon, wifpon

May appear in NOR clause, e.g.: Notice of

readiness may be given on any day at any time

wipon, wibon, wccon, wifpon.
Means NOR can be given whether in port or not,
whether in berth or not, whether customs
cleared or not, whether in free pratique or not.
Where inserted in NOR clause in a Berth C/P,
effectively converts it to a Port C/P: better for
shipowner!