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A ship charterer is a person or company who
enters into an agreement with a ship owner for the hire of a ship
either for the carriage of passengers or cargo on a particular
voyage to one or more places or until the expiration of a specified
time. This article explains the five (5) common mistakes made by
ship charterers and how to avoid them.
The five common mistakes made by ship charterers include:
- Not paying attention to market issues: A ship
charterer should be aware of recent happenings in the market
including the current market levels and the price of sea freight
shipping. Therefore, it will be possible to identify the best
moment to issue an order of need or search for a ship, as well as
putting cargo on the market. - Making mistakes when calculating the loading and
unloading boards: A charterer must pay attention to the
boards and to the loading and unloading rhythms, as well as to the
length of stay, the possible occurrence of holidays, and other
details that may lead to an excess of demurrage. - Lack of due diligence on the ship: In
chartering, it’s fundamental to conduct due diligence on the
ship and the company or person you are negotiating with. Therefore
it is necessary to run a background check on the ship and ship
owner to ascertain that they have the full capacity to carry on
with the contract. - Disregarding the importance of the shipping
agent: A charterer needs a shipping agent in order to
avoid these mistakes. A good shipping agent will keep the charterer
up-to-date with the most realistic port costs and port
restrictions, arrival queues for the vessels, and updates about the
ship hired. - Not having a charter party contract: A charter
party is a maritime contract between a shipowner and a charterer
for the hire of a ship either for the carriage of passengers or
cargo on a particular voyage to one or more places or until the
expiration of a specified time. Most charterers enter into
verbal/oral agreements with ship owners. It is very important that
a charterer insists on executing a charter party and gets legal
advice while doing so. Before executing the charter party, a
charterer should engage the services of a lawyer to review the
contract and look out for unconscionable terms.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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