In this section, we are going to explain the stages of ship chartering. These stages start from the introduction of the cargo and continue until the final delivery of the cargo at the destination and include 6 steps:
Search and select the right charter
The first step in setting up a chartering contract and its implementation is to search for the right charter or the right ship.
As we mentioned, finding the right ship is usually done by intermediaries. However, in order for intermediaries to be able to introduce you to the right ship, it is necessary to have received some initial information from you.
Consequently, in order to find the right ship, the first step that must be taken is to inform the company or intermediary about the cargo or the desired trip or the period of time for which you will have the ship at your disposal.
This information must necessarily include the following:
After you have provided the necessary information to the intermediary, you must prove what you have claimed according to the forwarder’s internal regulations.
For example, if you are considering a specific cargo, you must accept the expert’s report and the specifications you have declared must match the specifications estimated by the expert.
Or your financial means may be questioned, or relevant licenses may be requested from you. All of these measures are taken to ensure that your request is accurate and that your real needs are met.
After you have provided the necessary information to the forwarder, this person can offer you the appropriate contract.
For example, you may think that a voyage charter is a suitable option for you, but after providing information and expert reviews, it becomes clear that a time charter contract would be a more suitable and economical option for you.
In any case, after the intermediary has agreed with you, he will introduce you to the appropriate ship.
We should also point out that not only must the ship be selected according to your wishes, but also in terms of the rules for the trip or trips you want, for the origin, destination and route of transport, the type of shipment, the volume and weight of the shipment, the method of loading and unloading, the method and time of payment, the obligations you will assume, and other details must be determined and evaluated entirely according to your wishes and needs.
As a result, choosing the right charter means choosing the right charter contract and ship for you, which will be done entirely by the forwarder.
Payment of Fees
As we have already mentioned, various fees can be envisaged in a ship chartering contract, starting from the ship’s rent to travel expenses and operating expenses.
However, at the beginning of the chartering contract, two types of fees are expected to be paid by the charterer. The first one includes the payment of the ship’s rent, which must be made according to the agreements of the parties in the contract.
As a result, it is possible that the payment will be made in one or more stages, a joint payment may be received from the charterer, or the entire charter fee may be received from him in advance.
In addition to the charter fee, which is necessary for the charterer to pay, the commission of the contract may also be borne by the charterer in whole or in part, in which case he must pay it after signing the contract.
Usually, the forwarder’s commission is paid in a lump sum and in cash, however, the person responsible for payment, as well as the method and conditions of payment, may be unique to the freight forwarder, depending on the agreements between the parties, which in any case will be the criterion for action.
Another type of cost that may be borne by the charterer includes travel costs. Travel costs, especially in time chartering, will be borne by the charterer.
The method and conditions of payment of costs, as well as the time of payment, may be before the start of the voyage or it may not be a type of payment at all, but the charterer has directly committed to carrying out some tasks.
In any case, the stage of payment of costs plays an important role in the beginning of the chartering relationship between the parties.
Packing and delivery of cargo
Packing and delivery of cargo, which means preparing the shipment for transport, as mentioned earlier, may be the responsibility of either the shipowner or the charterer of the chartering contract.
This stage, regardless of which party is responsible, is essential for the execution of the chartering contract and the start of the voyage.
Explain that the packaging of the consignments must be done in accordance with the type of consignment, the volume and size of the consignment, the method of loading and unloading, the type of ship, the route between the origin and destination, and the duration of the voyage.
After packaging, the consignments must also be prepared at the loading location, which may be the responsibility of the charterer to transport them to the loading location, or the ship owner may also take care of their transportation services, or a third party may be involved.
Receipt and Issuance of Bill of Lading
A document issued by a shipping agent and made available to the owner of the shipment is called a bill of lading.
A bill of lading contains information about the sender, recipient, and cargo, and is actually a verification document issued by the shipping agent to declare that the cargo has been received and prepared for shipment.
A bill of lading is one of the important documents in maritime transportation and is actually a supplementary document to the maritime transportation contract.
Usually, the bill of lading is required to receive the goods and is the only document that can be presented to receive the cargo.
In any case, the bill of lading is issued before the start of your cargo’s sea voyage and acts as a cargo receipt.
Tracking the status to the destination
After the shipment has been received, loaded and prepared for shipment, the sea voyage phase will begin. In this phase, the shipment is transported along the designated route and is transferred from the point of origin to the point of destination.
This phase, which lasts between a few days and a few weeks, actually determines the fate of the shipment in safe and timely delivery, and for this reason, merchants follow this phase carefully and sometimes with concern.
Of course, today, thanks to the various electronic equipment and online services that are provided, it is possible to be aware of the fate and location of the shipment throughout the journey and, as a result, be aware of the exact time of delivery to the shipment.
Delivery at destination
The purpose of any sea voyage is certainly to deliver the consignment to the beneficiary at the destination.
The beneficiary, who usually proves his position to receive the consignment by presenting the bill of lading and sometimes with some additional documents and evidence, is the person who receives the consignment at the destination and ends the sea voyage of the cargo.
Of course, we should point out that the delivery of the consignment, which is usually the end point of the responsibility of the sender and the carrier, is very important in the documents of purchase and sale of goods and also in the contracts of carriage because it determines the point of transfer of risk.
Also, the point of delivery may be at the port on the vehicle, at the berth and after unloading, or any other place that the parties have determined in the agreements between them.
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