Charterer’s Agents

A ship needs an agent at every port of call.  Ideally the appointment should be in the owners hands but it is by no means unusual for the charterers to secure the right to nominate the agent as a clause in the charter party.  There are many reasons why a charterer may demand this right.  In the case of some major charterers (such as oil companies) they have highly sophisticated terminals which need reliable information from and communication with agents in order to operate efficiently.  By insisting upon one company with suitably expert skills they can be more sure of a consistent service.  Another reason is the fear a charterer may have of his cargo being handled by, and his secrets being disclosed to, a local competitor and he can avoid this by insisting on his own nomination. Even far less important reasons may underlie the ‘charterer’s agents’ clause such as ensuring being kept fully ‘in the picture’ regarding the ship’s progress in the port without having to pay for it.  At the bottom end of the scale some charterers try to insist on the clause to enable them to ‘sell’ the agency to whichever agent will offer them the highest share of the agency fee. It is for the chartering experts to decide whether or not the clause can be deleted from the negotiations but if the clause remains then the problem has to be overcome.  One thing about which it is important to be clear, no matter who nominates him, the agent is legally the servant of the owner. The ‘charterer’s agent’ clause gives the charterer the right to nominate the agent who will act on behalf of and be paid by the owner. In many cases, where responsible charterers are involved, the agent will give just as good a service to the owner as if it has been an owner’s appointment.  There are, of course, exceptions to every rule and sometimes the agent nominated by the charterer is simply not providing a good enough service.