In Voyage Chartering, the freight is paid, either per tonne of cargo or as a lump sum, which is normally payable either after the cargo is delivered (tankers) or on signing the bills of lading (dry cargo) or a combination of both, eg 80% payable after signing the
bills of lading and 20% payable after (or ‘upon right and true’) delivery. With tankers, the use of Worldscale for freight calculations means that the freight is not known until the discharge port is nominated. The amount of cargo to be loaded is agreed in advance, the usual method is for the charterer to provide a full cargo but, because the owner does not know at this stage exactly how much cargo the ship can lift, it is usually described as a given tonnage with a fixed percentage (5%) more or less in owners’ option (MOLOO) or in charterers’ option (MOLCHOP or sometimes MOLCHOPT). To use the abbreviation ‘MOLCO’ is considered dangerous because the handwritten version looks too similar to its opposite, ‘MOLOO’, hence the use of MOLCHOP, so that there can be no confusion with MOLOO.
For example, 50,000 tonnes 5% MOLOO means that the owner can lift 50,000 tonnes 2,500 (5%) 52,500 tonnes or 47,500 tonnes. On
arrival at the loading port, the master will declare how much cargo the ship is able to load.