Voyage Charter Ship Fixtures
When a charterer requires a ship, a charterer will instruct their shipbrokers or several shipbrokers, giving details such as: Cargo, Loading and Discharge Port or Ports, with tankers this is more likely to be a geographical range rather than a port, Freight, Indications, Charterparty and Clauses Dates. This is known as an Invitation to Treat.
The Shipowner will make an Offer via a shipbroker; this will contain some or all of the following information: Ship’s name and previous name, Flag, Year of Build, Class, Description of ship, including cargo-handling equipment, Last three cargoes, Cargo details and quantity including percentage more or less. Loading and discharge ranges, Freight rate, how to be paid, for example USD to Shipowners’ bank in Malta, Laydays/Cancelling, ETA . . . position, Demurrage, charterparty and additional terms, Worldscale terms and conditions (tankers) or loading and discharge rates and laytime conditions i.e. SHEX or SHINC, Shipowners’ option to slow steam down to knots, Commission, Time limit on the offer.
This Offer will be passed to the charterers via the shipbroker, and if passed verbally it will be followed by a telex or an email. The reason that the telex is still used, in countries where it is still valid is that it has an answerback facility and this will provide evidence of when the offer is received by the other party. This is very important in a situation where it is necessary to establish whether an offer was in time or not.
An alternative method is to send an email and then telephone the recipient to confirm receipt of the message. The charterer can then Reject, Accept, Counter, Accept Except (A/E) or Accept on Subjects.
The Ship Chartering Negotiations will continue with each side making Counter-Offers until the details including terms are agreed and the charter will be agreed apart from the subjects.
Note that under English Law there is no contract until all the subjects are lifted.
Consequently, when all subjects are lifted, the negotiated terms are collated into the charterparty.
While waiting for the subjects to be lifted and before the charterparty is produced, the shipbroker will send a Recap (Recapitulation) message to both parties, detailing all the points agreed by the parties.
This is the point at which the Shipowner and Charterer check with their notes and corrections, if any are made, to ensure that the charterparty reflects what has been agreed.
In order to save time, a Fixture may be made on the basis of last done. This means that the terms and conditions that were agreed on a previous fixture will be repeated with certain agreed exceptions. Thus it is important that both parties are clear about what this means.