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Sunday, November 7, 2010

Time charter concept - where do ships deliver?

In the world of time charter shipping a charterer and a shipowner need to come to a mutual agreement with regards to where (position) the ship will be delivered.

There are two main spots a ship can be delivered

1. DOP (at the last port where the ship comes open under previous employment)
or
2. APS (at the port of load)

Pilot boat next to Mothership

Lets look at an example. A ship is discharging coal in Japan and will finish in 10 days time. Her owners are now negotiating her next employment which is another stem of coal loading from Indonesia (they will need to ballast there empty).

The parties are in a time charter negotiation and the charterer wants to take the ship APS Indonesia (doesnt want to pay for ballast leg) but the shipowner wants the charterer to take the ship DOP Japan (when she finishes discharging in Japan). So this discussion is about who pays for the ballast leg. That should give you an idea regarding the concepts.

Ok here is a question for all reader of the blog. Apart from DOP or APS delivery can you name other types of Time charter delivery (other than these two)? There are a few unusual ones out there.

Come on and join in - let me know your ideas (even if they are a guess)
VS

22 comments:

  1. WHEN WHERE READY (WWR) OR WWRCD(WHEN WHERE READY ON COMPLETION OF DISCHARGE)

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  2. WWR

    We have a ship on charter at the moment where that is an option

    If a ship is discharging in port A and the timecharter is loading in Port A the charterer can take delivery of the vessel ‘when where ready’ ie on completion of discharge. The cost of moving the vessel from the discharge berth to the load berth is for the account of the charterer (usually some horse trading on this)

    Not very common as the issue of cleaning between cargoes often means the vessel has to sail the port to clean at anchorage but it does (rarely) occur in the bulk trades.

    regards
    bres (shipowner)

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  3. Thanks contribution bres - I dont have to explan the wwr concept now as yours is perfect.

    Any others out there?

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  4. Hi VS

    The terms AFSPS, DLOSP will also be used.

    Sometimes the vessel will use the service of one pilot to navigate her from outer anchorage to the channel, another pilot will navigate her through channel and may be a third pilot will take her near the berth. In that case the terms AFSPS ( Arrival First Sea Pilot Station) & DLOSP ( Dropping Last Outward Sea Pilot ) will be used for delivery & redelivery of the vessel.

    Also terms like Delivery PMO ( Passing Muscat Outbound ), Singapore South Bound etc will be used.

    Pleased to hear .

    With Rgds
    Varun

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  5. Hello Varun

    Yes nice one.

    I like the PMO example which is one of the deliveries I was alluding too.

    Let me expand

    EG - Delivery PASSING (which ever port) southbound (or whatever direction). This is used when a ship has started ballasting and the parties agree to accept that the ship will be delivered 'passing' a particular port steaming in the direction of the loadport.

    There is one more major one...

    Anyone?

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  6. Hi VS

    Thanks. Is It Passing Gibraltar.

    Also Cape Passero ( Skaw-Passero Range)

    With Rgds
    Varun

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  7. Hi

    No - already said 'passing'.

    Need something new..

    ReplyDelete
  8. Hi

    Hw abt retroactive or retro(any port)?

    Im out of stock.....

    With Rgds
    Varun

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  9. Kapow! - you got it. Sometimes we can agree to "delivery retro".

    Eg Ship leaves Gibraltar ballasting empty towards the USG looking for cargo. She is 500 nautical miles (1.5 days) west of Gibraltar crossing the Atlantic when the chartering people start negotiating.

    Parties can agree 'delivery retro Gibraltar" and backpay those 1.5 days.

    Happens alot.

    Im out of stock too. If there are any others then shout or forever hold your peace.

    Thanks for playing (hope this was informative)

    VS

    ReplyDelete
  10. Hi Vs

    Thanks. So retro del actually favors the Owner. This is as good as DOP eventhough vsl is not actually getting delivered at the previous discharge port.

    In this case the Owners had already decided to Ballast to USG looking for better opportunities and Charterers being aware of this, why they should agree retro del when they can squeeze for APS del. Or again the TC Hire will differ for Retro & APS?

    With Rgds
    Varun

    ReplyDelete
  11. Varun - the answer to your question depends on the strength of the market.

    So in this GIB to USG example given there are 4 delivery options (generally speaking).

    1. DOP/Passing GIBraltar
    2. APS 1 sp USG
    3. Delivery Retro Gibraltar
    4. Passing say Savanah (entry to US gulf)

    Place of delivery and time charter rates (incl any ballast bonus if applicable) are negotiable.

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  12. how do you calculate asp dop equivalent?

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  13. how do you calculate aps or dop equivalent???

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  14. Well - you start with you DOP rate that you want to achieve and then work out the expected revenue for the entire duration of the charter. Then if charter insists on APS delivery you merely divide the total revenue you want to earn (from the dop calculation) into the shortened number of days basis aps delivery.

    So APS delivery will be less days but the freight rate should be higher...

    hope this helps

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  15. Good morning to everyone. Since the topic is Delivery/Re-Delivery I would like to share with you the meaning of W.W.R. in relation to Time C/p and specifically point of Deliver/Re-Delivery. If you browse the internet you will certainly find the explanation of the W.W.R. being "When, Where Ready". The most reliable source in relation to its actual meaning is the following from the "Dictionary of Shipping Terms" 6th Edition - Mr. P. BRODIE

    "WWR - When Where Ready - Frequently used provision in a time charter to determine the time and place of delivery / redelivery of a ship by the charterer to the shipowner. This term is qualified in such a way as to make the time and place unambiguous, such as on completion of discharge at a named port, abbreviated to w.w. r.c.d. followed by the name of the port"

    Ops Dpt

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  16. Hi VS,

    Regarding the Dely Retro. It seems like it is similar if not the same as Ballast Bonus; since both aim to compensate the owner for ballasting. Is there any difference between these 2?

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  17. yes they are similar but retro is preferred because you get your money quicker (if you are an owner). Ie if you agree a ballast bonus you wont get paid until the ship arrives at the load port....

    It is also sometimes difficult to recover all the costs of a ballast voyage with a ballast bonus. Sometime you have to accept what the market offer. If yu agree retro then the shipowner gets the price he wants from the place he wants....hope this makes sense. Nice question.

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  18. Hi VS,

    Can you advice what is ECI??

    the wording is "DEL APS 1SP ECI".

    Thank you.

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  19. howdy

    that would be delivery arrival pilot station one safe port east coast india

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  20. Hello there,

    One more T/C delivery for your file : DELY AFSPS ...
    Arrival First Seat Pilot Station

    Brgds/Victor

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  21. A tricky question ... Vessel is being redelivered (T/C) at San Nicolas (Argentina) basis "WWR on completion of Discharge". Thus the Charterers are NOT responsible for the unberthing of the vessel and bringing her to the San Nicolas Anchorage. However the Owners of the vessel have fixed her again on T/C with next Charterers basis the following term : "WWR (when where ready) on Dropping Last Line". Thus the Questions are:

    1) Vessel is delivered to next Charterers on commencement of the un-berthing maneuvers or on arrival at port anchorage ?

    2) The un-berthing cost is primarily Linesmen & Pilotage. Is it correct to assume that Linesmen is for Owners' account and Pilotage cost is for next Charterers' account ?

    3) Any other comments ?

    Thank you for your time

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