Cargo Quantity
From a practical and chartering perspective, it’s essential to determine the quantity of cargo to be supplied, guided by the terms agreed upon in the charter-party. This subject, often discussed daily by those involved in chartering without reference to the legal framework, revolves around what constitutes a full and complete cargo. Such cargo, when properly stowed, either occupies the entire volume of the ship’s cargo spaces or brings the vessel down to her maximum permissible loading marks.
It is important to note that cargo spaces do not include areas designated for passenger or crew accommodation, machinery spaces, store rooms, or tanks designated for ballast or bunker. Notably, in many countries, the presence of cargo in these spaces can lead to severe penalties for smuggling.
The quantity of cargo may be specified in the following ways:
A- 100,000 metric tons with an allowance of 5% more or less at the Owner’s option (MOLOO)
B- 100,000 metric tons with an allowance of 5% more or less at the Charterer’s option (MOLCHOP)
C- A minimum of 100,000 metric tons at the Charterer’s option up to the vessel’s full cargo capacity
No Dead Freight is charged to the Charterer’s Account Provided that the Minimum Quantity is Supplied (CHOPT FC NDFCAPMQS)
In practical terms, these options mean that the charterer is expected to supply:
A- Any quantity requested by the Ship Master ranging from 95,000 to 105,000 metric tons B- Any quantity within the range of 95,000 to 105,000 metric tons
C- At least 100,000 metric tons up to the vessel’s full capacity. For example, if the Ship Master requests 120,000 metric tons, the Charterers are not obligated to pay dead freight as long as they have supplied at least 110,000 metric tons.
What is MOLOO in Ship Chartering?
In ship chartering, the term “More or Less in Owners’ Option” (MOLOO) refers to a provision that allows the owner of the vessel to vary certain aspects of the charter agreement within specified limits. It provides the owner with some flexibility in terms of cargo quantities, vessel specifications, or other agreed-upon parameters.
For example, if a charter party includes a MOLOO clause for cargo quantities, it means that the owner has the option to load slightly more or less cargo than the initially agreed quantity. The specific range of variation will be defined in the charter agreement.
This provision is often included to accommodate operational considerations, as it allows the owner to optimize the utilization of the vessel’s capacity or respond to unforeseen circumstances such as delays or changes in cargo availability. However, it is important to note that any variations made under the MOLOO clause should still be within the agreed limits and should not substantially affect the fundamental terms and conditions of the charter party.
It is worth mentioning that the precise details and extent of the MOLOO provision can vary from one charter agreement to another, as they are negotiated and agreed upon between the shipowner and the charterer.
More or Less in Owners’ Option (MOLOO) Example
Here’s an example to illustrate how the “More or Less in Owners’ Option” (MOLOO) clause can be applied in ship chartering:
Let’s say a charter party agreement is signed between a shipowner and a charterer for the transportation of a specific cargo. The agreement includes a MOLOO clause for cargo quantities, allowing the owner to load or discharge a certain percentage more or less cargo than the agreed amount.
The initial agreement states that the charterer will provide 10,000 metric tons of cargo for transportation. However, due to unforeseen circumstances or operational reasons, the owner may exercise their option under the MOLOO clause.
If the MOLOO clause allows for a variation of +/- 5%, it means the owner has the flexibility to load or discharge cargo within a range of 9,500 to 10,500 metric tons.
In this scenario, let’s assume the owner decides to exercise their option and load 10,200 metric tons of cargo, which is 2% more than the originally agreed amount. This variation falls within the permitted range specified in the MOLOO clause.
By utilizing the MOLOO provision, the shipowner can make adjustments to optimize the vessel’s capacity utilization, respond to market conditions, or accommodate changes in cargo availability while still operating within the agreed limits set in the charter party agreement.
It’s important to note that the specific terms and conditions of the MOLOO provision, including the permitted percentage variation, will be negotiated and agreed upon between the shipowner and the charterer before the charter party agreement is finalized.
What is MOLCHOP in Ship Chartering?
In ship chartering, the term “More or Less in Charterers’ Option” (MOLCHOP) refers to a provision that allows the charterer of a vessel to vary certain aspects of the charter agreement within specified limits. It provides the charterer with some flexibility in terms of cargo quantities, loading or discharging locations, or other agreed-upon parameters.
For example, if a charter party includes a “More or Less in Charterers’ Option” (MOLCHOP) clause for cargo quantities, it means that the charterer has the option to request the loading or discharging of slightly more or less cargo than the initially agreed quantity. The specific range of variation will be defined in the charter agreement.
This provision is often included to accommodate the charterer’s operational requirements, allowing them to adjust cargo volumes based on market conditions or changes in their supply chain. However, similar to the “More or Less in Owners’ Option” (MOLCHOP) clause, any variations made under the MOLCHOP clause should still be within the agreed limits and should not significantly impact the fundamental terms and conditions of the charter party.
It’s important to note that the precise details and extent of the MOLCHOP provision can vary from one charter agreement to another, as they are negotiated and agreed upon between the charterer and the shipowner or operator.
More or Less in Charterers’ Option (MOLCHOP) Example
Here’s an example to illustrate how the “More or Less in Charterers’ Option” (MOLCHOP) clause can be applied in ship chartering:
Let’s imagine a charter party agreement is signed between a shipowner and a charterer for the transportation of a specific cargo. The agreement includes a MOLCHOP clause for cargo quantities, granting the charterer the option to request loading or discharging a certain percentage more or less cargo than the agreed amount.
The initial agreement states that the charterer will provide 12,000 metric tons of cargo for transportation. However, with the MOLCHOP clause in place, the charterer has the flexibility to make adjustments within a specified range.
If the MOLCHOP clause allows for a variation of +/- 10%, it means the charterer can request loading or discharging cargo within a range of 10,800 to 13,200 metric tons.
In this scenario, let’s assume the charterer decides to exercise their option and requests the loading of 11,500 metric tons of cargo, which is 4.17% less than the initially agreed amount. This variation falls within the permitted range specified in the MOLCHOP clause.
By utilizing the MOLCHOP provision, the charterer can adjust cargo quantities based on market demand, logistical considerations, or other factors while still operating within the agreed limits set in the charter party agreement.
It’s important to note that the specific terms and conditions of the MOLCO provision, including the permitted percentage variation, will be negotiated and agreed upon between the charterer and the shipowner or operator before the charter party agreement is finalized.
No Deadfreight For Charterers’ Account Provided Minimum Quantity Supplied (CHOPT FC NDFCAPMQS)
“No Deadfreight For Charterers’ Account Provided Minimum Quantity Supplied (CHOPT FC NDFCAPMQS)” is a clause often found in charter party contracts in the shipping industry. Let’s break it down:
- “No Deadfreight For Charterers’ Account”: This means that the charterer (the party who has hired the ship) will not be responsible for paying deadfreight. Deadfreight refers to the scenario where a charterer has chartered a ship with a certain capacity but fails to supply enough cargo to fill it. The charterer is typically required to pay for this unused space, hence the term “deadfreight”.
- “Provided Minimum Quantity Supplied”: This condition stipulates that the “No Deadfreight” condition only applies if the charterer provides a minimum quantity of cargo. If the charterer does not meet this minimum, they may still be liable for deadfreight.
- “CHOPT FC NDFCAPMQS”: This is likely an extension of the clause. “CHOPT” stands for “Charterers’ Option”, which means the charterer has the option to implement this condition. “FC” could stand for “Freight Chargeable”, referring to the freight fees that could potentially be charged. NDFCAPMQS, as explained earlier, stands for “No Deadfreight For Charterers’ Account Provided Minimum Quantity Supplied”.
So, in simpler terms, this clause says that the charterer will not be charged for any unused space (deadfreight) on the chartered ship, provided they supply a minimum amount of cargo. This is an option available to the charterer, and it may affect the freight charges.