Chartering

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When a shipper has a large quantity of cargo especially bulk cargo such as coal, grain, ore and timber, he may wish to charter a ship suitable in size to transport the cargo to his buyer. This form of transportation is covered by a contract of affreightment called a Charter Party. There are basically two types of Charter Parties:

Demise Charter Party

A demise or "bareboat" charter party is one where the chaterer is responsible for providing the cargo and the crew whilst the shipowner merely provides the vessel. In effect, the chartered appoints the crew, this taking over the full responsibility for the operation of the vessel. A demise charter party for a period of time which may vary from a few weeks to several years.

Non-Demise Charter Party

A non-demise charter party is a contract where the shipowner provides the vessel and her crew whilst the charter merely supplies the cargo. There are two types of non-demise charter parties:
  1. Voyage Charter Party - It is an agreement for a particular voyage in which the shipowner agrees to transport the cargo from one specific port to another specific port, the owner of the vessel receiving freight for the cargo carried. Freight is usually charged per-ton basis subject to a minimum amount.
  2. Time Charter Party - A time charter party is a contract whereby the ship is hired for a specific period of time, during which the period the chartered has the freedom within the stipulations of the charter party conditions of using the vessel for what purposes he may wish to.

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