Neptune Atlas
Who is who on a fixture
A fixture is an agreed charter. A single voyage involves about a dozen parties, and a newcomer meets almost all of them in the first week. Most early confusion comes from two clashes of words: several different companies are called the owner, and two completely different companies are called the agent.
The three that sign
A charterparty (the charter contract) is a contract between two parties. The first line of the recap (the summary of the deal) names them, and it must name them correctly.
| Party | What they are | What they carry |
|---|---|---|
| Charterer | The party hiring the ship | Pays freight or hire. May be the cargo’s seller, its buyer, or a trader who owns the cargo only while it is at sea. Often not the party the cargo seems to belong to. |
| Owner | The party letting the ship | Provides the ship, the crew and a seaworthy ship. In a recap this word means whoever is letting the ship under this contract, which is often not the registered owner. |
| Disponent owner | A company that has the ship on charter and lets it out again | Acts as owner towards your charterer while being a charterer towards the party above it. This is common, and for a fixture it matters which one you have. |
The word owner has two meanings here, and you need to keep them separate. Who owns the hull is a different question, with up to five answers, and it has its own guide. Who is owner under this charterparty is whoever signed as owner, and on very many fixtures that is a disponent owner who does not own a single ship.
Two results follow at once. First, a claim under the charterparty is against the disponent owner, which may be a small company with few assets, not the well-known shipowner whose name made everyone feel safe. Second, the ship may be under a chain of charters, each a separate contract on different terms, so one delay at the discharge berth creates a demurrage claim at every link, each under its own wording and its own time bar (deadline for claims).
The cargo, and the two ends of it
| Party | What they are |
|---|---|
| Shipper | Whoever delivers the cargo to the ship at the load port and is named on the bill of lading (the cargo receipt and transport document). Often the seller, sometimes the seller’s supplier, and now and then the charterer itself. |
| Receiver | Whoever takes delivery at the other end, usually the buyer or someone the buyer names. In practice, the party that controls how fast the ship is discharged. |
| Notify party | Whoever the bill of lading says must be told the ship is coming. Often the receiver’s agent or bank, and not a party to the charterparty at all. |
The sale terms decide whether the shipper or the receiver is your charterer. The shipping documents do not decide it. Under an FOB (free on board) sale the buyer charters the ship, so the buyer is your charterer and the seller is the shipper. Under CFR (cost and freight) or CIF (cost, insurance and freight) the seller pays the freight, so the seller charters and the buyer is the receiver. This one difference tells you which end of the trade gives you instructions, and which end will complain about the loading rate.
This is also where a subject (a condition that must be met before the deal is firm) comes from. An
enquiry that says sub shippers’ approval or sub receivers’ approval tells
you that your charterer cannot commit the ship until a party outside the negotiation has checked
it.
Aboard the ship
The master (the captain) is a party to the fixture in practice, even though the master signs nothing during the negotiation. A laytime claim depends on three documents from the ship, and all three come from the master.
- The notice of readiness. The master gives it, and laytime (the time allowed for cargo work) starts from it, subject to the charterparty’s rules. Many demurrage claims are lost because the notice was given in the wrong place, at the wrong hour, or before the ship was truly ready.
- The statement of facts. The agent prepares it, the master signs it, and every laytime calculation is built on it. A master who signs it under protest has protected the owner’s rights. A master who signs it without reading it has usually lost them.
- The mate’s receipt and the bill of lading. These record what was actually loaded and how it looked. Remarks added here (clausing) decide whether a cargo claim exists.
The master also reports to the technical manager for running the ship, and to the commercial manager for finding its work. That is why a broker should not normally give instructions to a master: instructions go through the party that controls the ship.
In the port
This is the second clash of words. Two different companies are both called the agent, and they act for opposite sides.
| Party | Appointed by | Acts for |
|---|---|---|
| Port agent | Usually the charterer, under a clause that lets the charterer choose the agent | The ship. Clears the ship in, arranges pilots, tugs, berth, stores and paperwork, and issues the disbursement account (the bill for the port call). |
| Protective agent | The owner | The owner, watching the chosen agent on the owner’s behalf. The owner pays, and it is worth it where the terminal belongs to the charterer. |
| Stevedore | Whoever the cargo handling terms say pays | That party. Under FIOST that is the charterer, which is why damage caused by stevedores becomes the charterer’s problem. |
| Surveyor | Either side, or both together | Draught surveys to measure quantity, hold inspections before loading, and condition surveys when the ship goes on and off hire. |
The port agent is the party that causes the most mistakes. The charterer chooses and pays the agent. The law says the agent must act for the ship. And the agent writes the statement of facts that will decide a demurrage claim between the two. If the record favours one side, the agent is usually not being dishonest. The agent is writing down what the terminal said. This is a reason to read the statement of facts on the day, not months later when everyone else reads it.
Behind the ship, and not on the fixture
Four more parties affect what happens without appearing in the recap. The flag state issues the ship’s certificates, and the ship is subject to the law of its registry. The classification society certifies the hull and machinery and can suspend class, which stops the ship trading. The P and I club provides the owner’s liability cover for cargo claims, pollution and crew. And the port state control authority at the discharge port can detain the ship, which is the one item on this list that can completely stop a fixture from going ahead.
The brokers, and why there is a chain
There is rarely just one broker. A typical fixture has an owner’s broker and a charterer’s broker, often with one or two intermediaries between them who each know only the party next to them.
Chains form because each broker has contact with different people. The broker who has the charterer does not have the ship, and the broker who has the ship cannot reach the charterer, so the two work together. This is normal business, and it has three results a newcomer should expect.
- Information gets worse at every step. A laycan or a quantity gets rounded and a term gets reworded, so after the third broker the enquiry no longer matches the one the charterer sent. The details that stay correct are the ones nobody rewords: the stowage factor, the exact demurrage figure, the discharge options.
- The principal stays hidden until the offer is firm. An enquiry may say
first class receivers, full style on firm. This means you get the name when an offer is made firm. Full style is the legal name and address as they will appear in the charterparty. You need it because you cannot check whether the other side pays until you know who they are. - Commission is shared down the chain and is earned only when the deal is done. Everyone in the chain has the same incentive, but each has different information.
Every chain depends on one rule: deal only with the party next to you, and never contact the parties beyond them directly. Contacting the principal at the far end directly is the fastest way to be left out of every future enquiry, and desks remember it for years. Nobody has written this rule down, but everyone enforces it.
Getting the parties right on the record
Almost every party above answers a question someone will ask later. Who owes the demurrage? The disponent owner, not the shipowner. Who slowed the discharge? The receiver, not the charterer you were talking to. Who signed the statement of facts? Who chose the agent?
A desk that records one Owner field and one Charterer field against a fixture cannot answer any of these. The answers are needed exactly when the fixture has gone wrong, and by then the people who were involved have often moved to other work.
References
- FONASBA (Federation of National Associations of Ship Brokers and Agents), Documentation. fonasba.com
- BIMCO, GENCON 2022 voyage charter party, 2022. bimco.org
- BIMCO, CMI, FONASBA and the Baltic Exchange, Laytime Definitions for Charter Parties 2013, 2013. fonasba.com
- IMO, Convention on Facilitation of International Maritime Traffic (FAL), 1965. imo.org
- IACS (International Association of Classification Societies). iacs.org.uk
- International Group of P&I Clubs. igpandi.org
Related
Neptune Atlas
Neptune Atlas holds owner, disponent owner and charterer as three separate companies on a fixture rather than one Owner field, because a disponent owner re-letting a ship it does not own is the normal case and not a rare one. Each of them resolves to a company record with its own contacts, so the question of who to write to has an answer on the record rather than in somebody's mailbox. Every paid plan starts with 7 free days. A card is needed to start them, and cancelling before they end costs nothing.
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