This post is to explain a little more about some of the essential concepts involved in 'voyage estimating'.
This one is a doozy....and has confused many a trainee and experienced shipping person over the years. Shipowners understand the concept by in my experience brokers have a rudementary idea, and charterers even less of an idea (especially voyage charterers)
APS vs DOP ship delivery.
APS = Arrival pilot station (at new port)
DOP = delivery dropping outward pilot station (at last port of discharge from previous voyage)
Second important point: These are time charter terms not voyage charter terms.
So when negotiating a time charter the two parties will need to agree at a delivery point for the ship. At first glance this may sound like a no brainer. The delivery should be at the first load port I hear you say.....but wait just one moment. Like a taxi cab most ships need to travel empty to the next load port....so the question is 'who pays for the empty ballast leg to the load port?'
Common sense may suggest that the shipowner should pay but the reality in most situations is that it is the charterer who usually foots this bill. Having said that the 'delivery point' of a vessel in any time charter negotiation is a MAJOR point of discussion and choice can come down to the prevailing market conditions at that particular time.
All charterers try and get APS delivery because that means they only start paying hire at the load port (ie arrival pilot station). All shipowners try and get dop delivery (dropping outward pilot station at last port of discharge - previous voyage) because it means the charterer pays from the moment the ship leaves the last discharging port of the previous contract.
You can see by this example why it is important for charterers to source ships as close as possible to their own loading port.......
The problem here is that most loading areas are not by defintion discharging areas. 99 percent of time charter contracts involve an empty ballast leg before the vessel picks up the next cargo...
There is so much more that can be written on this subject and I will add a few things as we go along. Any questions just drop me a line....
- The Virtual Shipbroker
- Hi. I am a shipping company director, transport academic, author, family man and all round nice guy. I have worked as shipbroker, shipowner, freight trader and bulk charterer, in senior positions, with some of the largest and most disrespected (joke) companies in the world. Ask my advice on all things shipping and you will receive my blunt and always honest answer. Hang around to learn more about chartering and ship broker salaries, chartering and ship broker jobs, chartering and shipbroker recruitment agencies, cheap freight, maritime education, chartering and ship broker qualifications, become a ship broker, tips on how to be a successful bulk shipping executive, philosophy, Zen and the art of shipbroking, and much more. Yours The Virtual Shipbroker (recently proclaimed the guru of shipbroking) Copyright © 2009-17 by Virtualshipbroker