"mmm - Ballast bonus" (say like Homer Simpson)..
One of those complicated chartering concepts that confuses many people.
This will help those of you interested in voyage estimation.
A ballast bonus is a time charter concept and it refers to a lumpsum payment 'sometimes' made to a shipowner (by the charterer) as compensation for delivering a ship in a loading region of the world!
Whats that in English VS?
Ok lets see of I can explain. Some regions of the world are NET loading regions and some are NET discharging regions (also described as importing regions and exporting regions).
In many cases for a ship to enter a loading region she needs to sail there empty (ballast leg) because there are no inbound cargoes. So who should pay for this empty leg? As discussed previously the charterer usually pays for this leg. The reason is that the shipowner probably has other alternatives that do not require such a long empty passage. So its a matter of user pays.
Question is this...What if the ship has already started the empty passage to a loading area without having yet secured an outbound cargo? This happens alot. Shipowners will take a risk and not fix their ships too early in expectations that the market will rise in the short term. So after discharging their last cargo they will up anchor and sail to a loading region. One example of a loading region is the USG. Many ships from Europe will take the 2 week empty trip across the Atlantic on spec hoping that something will come up over the next 2 weeks.
This is where a ballast bonus is often paid. The shipowner will rate his ship basis a market time charter rate plus he will add in a ballast bonus lumpsum rate as compensation for sailing empty from Europe. The Ballast bonus should reflect the cost of the empty ballast in terms of time and fuel.
A typical fixture that will involve a ballast bonus might look like this.
"Freight hire usd 20,000 per day plus a ballast bonus of USD 280,000 lump sum"
Riveting stuff. I would much prefer to talk about football........but everything has its place.
Any questions just shoot.
- 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