From the open questions thread - just in

New BrokerFeb 13, 2012 12:19 AM


Dear VS,

I am in the process of fixing a vessel for a first time charterer. The operator has asked for 20% freight advance directly to his account. Charterer however not very comfortable to remit payment directly and wants me to convince the operator to accept BG or Escrow account. Operator says that owner will not accept Escrow and that he can lock the vessel only after getting the deposit. How do I satisfy both the parties.

ReplyDelete

The Virtual ShipbrokerFeb 13, 2012 02:21 AM

Good question new broker.

In these crazy financial times your example is symptomatic.

Without knowing who they are its difficult for me to give good advice. I can make some generalisations though.

There must be a reason owners are asking for 20pct in advance? They probably scared about the financials of the charterer. Why are charterers refusing? What difference does paying into an escrow or straight into the bank account make to them? Unless offcourse the operator themselves are also financially insecure?

IMO an escrow should be used for other purposes. Payment of freight upfront is becoming more and more prevalent. An escrow is better used if for instance there is an amount that may eventually be disputed. In your example this is not infact the case.

So my advice is to work on the charterer. Make sure the agreement states that upfront payment doesnot take place until the ship actually delivers. Sending money to a shipowners bank account without a delivered ship is not a good idea!

At the end of the day if the charterer isnt happy then he can find another ship and the ship owner aint happy he can find another charterer...

cheers
vs