SLOTHIRE

The contract, usually on the standard SLOTHIRE form, allows them to issue their own bills of lading, set their own freight rates and generally act as if they were the vessel operator. Of course they have obligations too and should only contract to carry on terms similar to the true operator, furthermore they will be responsible for settling their clients’ cargo claims and if the vessel is making a call at a port solely for their convenience – to cover the port costs incurred. The head owner can make any number of slot agreements with different NVOCCs so the same ship may appear to be running on several different lines at the same time. Having found a potential ship to carry a Principal’s cargo, or what appears to be a suitable cargo for a ship, the Shipbrokers concerned usually converse to exchange additional facts, so as to ensure the business is mutually interesting and workable with a fair chance of success – all this normally prior to discussion with the Principals. One or other Broker will then seek and receive his Principal’s authority to make an offer for the business. Although this may, at first sight, seem a simple procedure, serious problems can arise if a basic code of conduct and practice is not followed in the tendering and receipt of such offers. First, negotiations need to be conducted with care and attention to detail, as there must be complete agreement between the two Principals for an enforceable contract to come into being.