Chartering Terms (B)

“B”

Back to Back Charter – Contract between a charterer and a sub charterer whose terms and conditions are identical to the contract, known as the head charter, between the charterer and the shipowner. The purpose of agreeing identical terms is to ensure that any money for which the charterer may be liable to in the sub-charter, for example dispatch money, is recoverable from the shipowner.

Backfreight – Freight payable to a shipowner for the carriage of goods back to the port of loading or to another convenient port when the vessel is unable to reach the port of destination because of an excepted peril or because the consignee fails to take delivery of The goods or provide instructions for their disposal.

BAF – Bunker adjustment factor.

Bale / Bale Capacity – Total cubic capacity of a ship’s holds available for the carriage of solid cargo which is not capable of filling the spaces between the ship’s frames. It is expressed in cubic feet or cubic meters. Where a cargo is free flowing and is capable of filling the spaces between the ship’s frames, the corresponding cubic capacity is known as the grain or grain capacity.

BB – Ballast Bonus – Sum of money paid by a time charterer to a shipowner in recognition of the fact that the shipowner is unlikely to find a cargo near to the place of redelivery of the ship at the end of the period of the charter and is therefore obliged to ballast his ship elsewhere.

Baltic Mercantile & Shipping Exchange – Institution, located in London, England, also known as the Baltic Exchange or simply the Baltic, whose main function is to provide facilities for the chartering of ships by its members: chartering agents, acting on behalf of charterers, negotiate with shipbrokers who represent shipowners on the “floor” of the Baltic. Other activities include air chartering, futures trading and sale and purchase of ships.

Baltime – General purpose Time Charter Party published by BIMCO.

Bareboat Charter – The hiring or leasing of a ship for a period of time during which the shipowner provides only the ship while the charterer provides the crew together with all stores and bunkers and pays all operating costs. This type of charter is favored by persons or companies who wish to own a ship for investment purposes but who do not have the desire or expertise to operate the ship. Similarly, it is favored by persons or companies who have a particular requirement for a ship and the expertise with which to operate one but without the wish or ability to purchase. A ship hired out in this way is said to be on bareboat charter. Also referred to as a demise charter or a charter by demise.

Bareboat Charterer – Person or company who charters a ship for a period of time, provides crew, bunkers and stores and pays all operating costs. Also known as a demise charterer or charterer by demise.

Bareboat Charter-Party – Document containing the contract between the owner of a ship and the demise charter, and signed by both, in which are all the terms and conditions such as the period of the charter, the rate of hire, the trading limits and all the rights and responsibilities of the two parties. Also referred to as a demise Charter-Party.

Barecon ‘A’ – Standard bareboat Charter-Party published by BIMCO.

Barecon ‘B’ – Standard bareboat Charter-Party used for newbuildings financed by mortgage, published by BIMCO.

Base Cargo – Minimum quantity of cargo required by a shipping line to make it worthwhile to call at a particular port of loading.

Base Rate – Basic rate of freight of a shipping line or liner conference onto which are added, or on which are calculated, the various surcharges such as the currency adjustment factor or bunker surcharge.

BBB – Before Breaking Bulk – A condition of carriage that freight, or some percentage of it, becomes payable before breaking bulk (discharge of a vessel commences).

BD – Bundle.

Bearer of a Bill of Lading – Person who tenders the Bill of Lading to the ship at the place of discharge in exchange for the goods. Bills of lading are often made out to bearer.

Bends – Both Ends – At both loading and discharging ports. This term is often used together with GSAAAAB (good safe always afloat always accessible berth), with OSP (one safe port), with OSB (one safe berth) and to qualify the prices of the bunkers on delivery and redelivery in a time charter. Also used to state agency determination (ex. Carrier’s agents bends).

Berth Charter Party – Charter-Party in which a particular berth is nominated by the charterer. The time allowed for loading or discharging, as the case may be, does not start to count until the ship reaches the berth, unless berth is occupied in which case time starts counting when NOR is tendered.

Berth Standard of Average Cause – Clause in a Charter-Party setting out the contribution to be made by the charterer to any claim for loss or damage to cargo for which the shipowner is liable.

Bill of Lading to Order – Bill of Lading which requires an endorsement by a consignee before goods can be delivered to him by the carrying ship. Also called a “to order Bill of Lading.”

BIMCO (The Baltic and International Maritime Council) – Association whose main object is to promote and defend the interests of shipowners. It also has a membership of shipbrokers and has been responsible for contributing to the creation of a large number of Charter-Parties and other shipping documents.

Bimcosale – Standard bill of sale published by BIMCO, used for the purchase of ships.

B/L – Bill of Lading – Document issued by a shipowner to a shipper of goods. It serves as a receipt for the goods, evidence of the contract of carriage and document of title. As a receipt it contains the description and quantity of the goods as well as suitable notations if the goods are not in apparent good condition when received by the ship. As evidence of the contract of carriage, the Bill of Lading contains the terms and conditions of the contract or, where the contract is represented by a Charter-Party, a reference to the Charter-Party As a document of title, the “to order” Bill of Lading is used by a third party to take delivery of the goods from a ship.

Blacklist – List of countries published by a particular government which will not allow ships to trade at its ports if they have traded at ports in the countries on that list.

Blt – Built.

B/N – Booking Note – Document containing the terms and conditions of a contract between a shipper and a shipping line for the carriage of goods on a particular ship between specified ports or places.

B.N.A. – British North America.

Boffers or BO – (asking) best offers.

Book Space (to) – As a shipper or his agent, to reserve space in a ship for the carriage of certain defined goods from a place of loading to a place of discharging.

Booking – Reservation made by a shipper or his agent with a carrier for the carriage of certain defined goods between defined places.

Booking List – List of all cargo bookings for a particular sailing. It is compiled by a shipping line from lists sent in by the line’s agents responsible for taking bookings for the various ports on the ship’s itinerary.

Both to Blame Collision Clause – Clause in a Bill of Lading or charter party which stipulates that, in the event of a collision between two ships where both are at fault, the owners of the cargo must indemnify the carrying ship against any amount paid by the carrying ship to the non-carrying ship for damage to that cargo. This clause arises because, under American law, a cargo owner is not able to make any recovery from the carrier for damage resulting from negligent navigation but may instead sue the non-carrying ship which in turn seeks recovery from the carrying ship in proportion of his fault. This would render a carrier indirectly liable for a loss for which he is not directly liable to the cargo owner. The clause has, however, been held to be invalid in the American courts when incorporated with a common carrier.

Box Rate – Rate of freight per shipping container, as opposed to per ton or per cubic meter. Since a box rate is unaffected by the actual quantity loaded into the container, it is in shipper’s interest to load as much cargo as possible, subject to the maximum allowed, to effectively reduce the cost of carriage for each ton or cubic meter.

Break Bulk (to) – To commence to discharge a bulk cargo. It is sometimes a condition of carriage that freight, or some percentage of it, becomes payable on breaking bulk.

Breakbulk – Relating to cargo lifted on and off ships one piece or bundle at a time by means of cranes or derricks, as opposed to cargo shipped on trailers or in shipping containers. Such goods may be described as breakbulk cargo; the ships which carry them are sometimes referred to as breakbulk ships which are operated on a regular basis between advertised ports, provide a breakbulk service. The term breakbulk is often used to denote the opposite of containerized.

Broken stowage – Amount of unused space in a ship or a hold by virtue of the irregular shape of the cargo. For example, the space taken up by a bundle of bars of irregular length would be calculated on the basis of the longest length, as if all the bars were of that length.

Brokerage – Fee or commission payable by a shipowner to a shipbroker for successful negotiation of a charter, It is normally expressed as a percentage of the freight or hire and demurrage. Brokerage may or may not be payable, according to the terms of the Charter-Party, should the voyage or period of the charter not be completed.

B/S – Bunker Surcharge – Extra charge applied by shipping lines, or set by liner conferences on behalf of their members, to reflect fluctuations in the cost of bunkers. This surcharge is expressed either as an amount per freight ton or as a percentage of the freight. Also referred to as bunker adjustment factor (BAF), or fuel oil surcharge (FOS), or fuel adjustment factor (FAF).

BT – Berth Terms – Expression signifying that the contract of carriage is subject to the customs and conditions of the ports of loading and discharging.

Chartering Terms (A)

“A”

AA – Always Accessible or Always Afloat – Term in Charter-Party which stipulates that the charterer must not order the ship to a port or berth where she would touch the bottom or perhaps be unavailable at any time due to tidal variations.

AAAA– Always accessible always afloat.

A/C – Account This term is used when referring to a bank account and when allocating costs, such as in the phrase “for the a/c of charterers”.

ABS – American Bureau of Shipping.

ABT – About – A conditional term used in qualifying cargo, time, bunkers or speed: when discussing cargo. “about” usually covers a margin of 5 % either way (i.e. 25,000 LT 5% more or less, at owner’s option), when referring to a period of time: usually 15 days, although each case is considered on its own merit. In connection with bunkers, “about” has been interpreted to mean 5% latitude; regarding speed, the tolerance is generally one half knot.

Accomplished Bill of Lading– Original Bill of Lading which has been surrendered to the carrying ship at the discharge port in exchange for the goods.

A/E or ACC/EXC – Accept/Except – Term used by either the ship owner’s broker or the prospective charterer’s broker during the negotiations for the charter of a ship to signify that an offer or counter-offer is accepted apart from certain clauses or details. These are then listed together with the amendments sought.

AD VAL FRT – Ad Valorem Freight – Freight calculated on the value of the goods, expressed as a percentage thereof.

ADDCOM – Address Commission – Commission payable by the ship-owner to the charterer. The reason for this system is sometimes said to be that the charterer’s shipping department for bookkeeping purposes must show some kind of income from their activities. State trading countries regularly include a 5% address commission in their orders.

Additional Demurrage – Amount of money paid to the ship-owner by the voyage charterer, shipper or receiver, as the case may be, for failing to complete loading or discharging before the agreed period of free time has expired. The daily rate of additional demurrage is agreed in the Charter-Party.

Additional Freight – Extra charge imposed in accordance with the contract of carriage by a shipping line on the shipper, receiver or Bill of Lading holder, as the case may be, for additional expenses incurred in discharging the cargo. This charge generally applies when the port stipulated in the contract is inaccessible or when the discharge there would result in unreasonable delay to the ship: under these circumstances, the shipping line may have an option under the contract of carriage to proceed to another port of discharge the cargo where extra costs may be incurred.

“Adopted” Charter -If a charter “agreed” in that way following negotiations between, for instance, BIMCO and one or more groups representing charterers is officially supported by another association of ship-owners, for instance, the Chamber of Shipping of the United Kingdom, it is stated that the Chamber of Shipping of the United Kingdom has ” adopted” the charter; or on the other hand, if BIMCO wants to support one or the other charter negotiated and “agreed” between the Chamber of Shipping of the United Kingdom and one or more groups of charterers, then it is stated that the charter has been adopted by BIMCO. Moreover, a document issued by an organization of ship-owners, for instance INTERTANKO, for use in a special trade without having actually been “agreed” with any particular group of charterers, may be adopted by BIMCO. An adopted document is compulsory for the members of the organization who have adopted it if it is an “agreed” document.

Advance Freight – Freight payable at a time agreed by the shipowner and the shipper, before the goods are delivered at the place of destination in the contract of carriage.

Advance on Freight – Money advances by the shipper to the master of a ship to pay for his disbursements while in port. It is often repaid by deduction from freight.

Affreightment – The hiring of a ship, the term may also sometimes be used to describe a contract for a series of voyages.

AG – Arabian Gulf (used when vessels are proceeding to Arabian ports). In fact Persian Gulf is correct.

Agency Clause – Clause in Charter-Party, which stipulates whether the ship’s agent at the loading and / or discharging ports are to be nominated by the ship-owner or the charterer.

Agency Fee – Fee payable by the ship-owner or ship operator to a port agent, whose duties may include arranging a berth with the port authority, ordering pilots, tugs and labor, entering the ship in at Customs and collecting freight.

“Agreed” Charter – The charter has been agreed between BIMCO (or The Chamber of Shipping of the United Kingdom or Cornite Central des Armateurs de France or other associations of ship-owners) with one ore more groups of charterers or other institutions (for instance, the Polish Coal Charter Committee, the Timber Trade Federation of the United Kingdom, the Syndicat National du Commerce Exterieur de Cereales, Paris or CMEA, Moscow). The printed conditions of an “agreed’ charter must not be altered or deleted without the express approval of the organizations who have agreed the charter, An “agreed” document is compulsory for the trade for which it is intended, e.x. the sugar trade.

AGW – All going well.

All in Rate – Freight rate which is inclusive of all surcharges and extras. This type of freight rate is to be found in the liner trade.

Anniversary Date – This refers to the hour and date the ship is delivered to the charterer and, therefore hire is paid from that date, either semi-monthly, monthly, or per 30 days, through the end of the charter period. This is especially important when negotiating for an extension, or when ‘fixing” in direct continuation.

AP – All Purposes – Time allowed in a voyage charter for loading and discharging combined, expressed as a number of days and hours. Also referred to simply as purposes.

“Approved” Charter – this is the expression used for charters – whether “agreed”, “adopted” or “recommended”.

APS – Arrival Pilot Station – Location often used as the place of delivery of a ship by the ship-owner to the charterer at the commencement of a time charter. The hire charge commences from the time of arrival unless the ship arrives prior to the first of the laydays. In such a case, the hire charge commences at the beginning of the first layday or sooner at the option of the charterer.

Arbitration Clause – Clause in a contract, such as Charter-Party, which stipulates that any dispute between the parties arising from the contract be resolved by arbitration. The clause also specifies the place where the arbitration is to be held, the number of arbitrators and their qualifications, and the procedure should one party fail to nominate an arbitrator.

Arrived Ship – Requirement of all voyage charters that the ship must have arrived before laytime can commence. Where the charterer has nominated a berth or dock, the ship must have arrived at that berth or dock. When a port is nominated, the ship must have arrived at the pod in this context in cases where there is no berth available and the ship is obliged to wait, a vessel is an “arrived ship” as soon as the following conditions have been met:
1. The vessel must have arrived at the loading or discharging berth or port as stipulated in the charter.
2. The vessel must be fully prepared to load or discharge.
3. Notice of readiness in writing, as prescribed, must have been given to shippers or consignees.
4. If berth nominated by charter is not available, then vessel can be considered “arrived” when NOR is tendered.

ASBA – Association of Ship Brokers and Agents (USA), Inc., New York.

As Agent Only – Form of words used with a signature to a Charter-Party or Bill of Lading to indicate that the party signing is doing so merely on behalf of a principal, whether is to be the master, owner or charterer of the ship, and has no rights or liabilities under the contract of carriage.

As is – In the condition in which the subject matter is. This expression is used when goods, or a ship, are offered for sale without repair or rectification.

As is, Where is – In the condition in which the subject-matter is and at the place where it is lying. This expression is used where goods or a ship, are offered for sale without repair or rectification and with delivery to the purchaser being at the place where the goods are lying.

ATS – All Time Saved: term used in a voyage charter party to define one method by which dispatch money is calculated, that is, by deducting time used for loading and/or discharging, as the case may be, from a theoretical time up to the expiry of laytime which includes excepted periods, for example a charterer may be allowed 10 days for loading. He calculates the expiry of laytime taking, account of excepted periods such as weekends, and arrives at a theoretical number of calendar days, say 15. Should he only use four laydays to load, he is entitled to II days dispatch money.

ATDN – Any Time Day or Night – Term used in a time Charter-Party to signify that the ship-owner may deliver the ship or that the charterer may redeliver the ship, as the case may be, at any time of the day or night and not necessarily during normal working hours. This term is very often followed by SHINC (Sundays and holidays included).

Average to Laytime – As a voyage charterer, to offset the time used in loading cargo against that used in discharging for the purpose of calculating demurrage or dispatch. If, for example, a charterer earns five days dispatch at the loading port but there is a period of three days demurrage at the discharging port, the charterer has a net claim for two days dispatch money.