- Panamax. In case of bulk carrier, it is about 65/82,000 dwt, 7 hatches/holds, it is usually without gear. In case of tanker, Panamax has about 60/80,000 dwt.
- Capesize – around 120/200,000 dwt, 9 hatches/holds, without gear.
- VLCC – Very Large Crude Carrier – about 240/320,000 dwt.
- Handysize. In case of bulk carrier, it has about 20/35,000 dwt, 4 or 5 hatches/holds. It is geared with 25-35 ton cranes. In case of tanker, it has about 10/37,000 dwt.
- Handymax – about 36/49,000 dwt, 5 hatches/holds. It is geared with 25-35 ton cranes.
- What are the largest trading routes for the bulk commodity Iron Ore?
This major bulk cargo has the following most important and largest routes: India to the Far East, Australia to the Far East and to Europe, Chile to the Far East, Black Sea to the Far East, South Africa to the Far East and to Europe, Norway to Europe, Brazil to the Far East, Europe and to Argentina.
- Identify the major costs in running a ship?
These costs include victualing; capital ship cost, which is formed by depreciation cost (capital cost, subdivided by the number of years ship is expected to participate in trading, subtracting its supposed value of demolition at the end of its operation period) and the capital funding cost, which can also partly be in a bank loan form; engine and deck room spares and stores, as well as lubricating oil; crew wages, insurance, overtime, pension contributions, travelling costs; insurance (Machinery and Hull and P&I); suitable daily allowance for covering such periodic costs as special surveys, dry-docking and running repairs.
- Identify the major costs that are specific to a voyage (voyage costs).
Port disbursements, canal dues, bunkers (fuel), discharge/load expenses if they are paid by the ship owner, stevedoring. There also may be some other costs, such as over-age insurance, local dues and/or taxes, war risks premium, dispatch money and income tax, freight tax, etc.
- What is bareboat/demise charter?
Charterparty is a special contract with terms and conditions agreed between the disponent owner and the owner of the ship, or operator of the charterer for hiring the vessel or carrying some goods in it in return for money of agreed hire rate or freight. The bareboat charter means an agreement between the ship owner and the demise charterer complete control and management of the ship. For all the necessary purposes, the charterer becomes the owner of the ship for the whole period of the contract. The crew and the master become his servants and can be appointed by him.
- What are the three functions of a bill of lading?
The following functions are executed by the Bill of Lading: 1) it serves as a document of title for the goods, on the basis of which these items can be carried; 2) it serves as a receipt for goods, which is signed by agent on carrier’s behalf or Master, with admission as for the quantity and condition of the goods; 3) it serves as prima facie evidence of the carriage of the conditions and terms.
- What is a letter of indemnity?
Letter of indemnity serves to indemnify the owner from any possible claims that can arise from the cargo delivery without Bills of Lading presentation, with the help of which title to the cargo is demonstrated. It is not the best scenario, but it is a necessary measure in the view of the situation when delivery or discharge of cargo at port of discharge without the original of the Bill of Lading has become very widespread. Sometimes owners have to consider accepting this document in case of destination change to some port other that the one specified in the Bills of Lading. Any other situation described in the letter of indemnity should by resisted, as there have been instances when it covered various fraudulent acts. The original form of the letter should also be required. The wording of the letter is usually provided by the P&I Club of the owner and it has to be signed by the charterer.
- What is a function of P and I Club? P and I Clubs also routinely offer FDD. What is FDD?
The P&I Clubs that exist today represent the effective descendant of the small hull insurance clubs established by the British owners of ships back in the 18 century. The P&I Clubs still function buy the principles introduced back in those times – ship owners united in groups and together they shared their hull risks mutually, which meant that at the same time they were insurers and insured. Today the only significant change is that it is not individual members who provide insurance, but the Club instead. Now the range of risks covered by P&I Clubs are the following: collision liabilities, pollution, stevedore, crew and third party injury and death, as well as other capabilities related to crew, damage to or loss of the cargo, docks damage, proportion of the General Average of the ship, wreck removal, various types of fine and customs penalties. FDD offered by the P&I Clubs are Freight, Demurrage and Defence Clubs that deal with insurance of the legal and some costs of engaging in disputes that are not insured in any other way. The typical problems, with which FDD Clubs deal are claims for demurrage, freight, debt collection, etc. The most expensive examples of deals are sale and purchase disputes, as well as new building contracts. FDDs also offer commercial and legal advice to their members.
- Define general average – what is the name of the rules that govern GA and are usually incorporated into the charter party?
General Average (GA) is an act that is used only in those cases when there is extraordinary expenditure or sacrifice that is reasonably and intentionally incurred or made for the purpose of the common safety so as to preserve from peril those goods and properties involved in some common maritime adventure. A sacrifice is defined as the damage or loss of the physical properties, such as cargo jettison. All the GAs should be adjusted to the York-Antwerpen Rules, the most recent version of them being of 2004. This provision is incorporated into the charterparties, contracts of carriage, as well as Bills of Lading.
- What is the Baltic Exchange Dry Index?
It summarizes and is derived from the Baltic Exchange Supramax Index (BSI), the Baltic Exchange Handysize Index (BHSI), the Baltic Exchange Capesize Index (BCI), and the Baltic Exchange Panamax Index (BPI). All the indices are calculated on the basis of average rates applied in major voyage and/or timecharter routes, which are assessed by competitive brokers panel, all of them being members of the Baltic Exchange. Overall, Baltic Exchange Dry Index provides an effective general indicator for the dry bulk market movement.
- What is BIMCO?
It is the Baltic and International Maritime Council – the largest organization in the world that unites brokers, owners of ships, P&I Clubs, agents and other companies that have some interest in shipping. Currently it has about 2,550 members from 123 countries. The members who are representatives of owners in BIMCO control a total of 525 million dwt fleet. The main purpose of organization operation is uniting the ship owners and defending international shipping interests.
- What is FONASBA?
It is the Federation of National Associations of Ship Brokers and Agents established back in 1969 at the Baltic Exchange. Today it covers 50 countries and its membership is subdivided into three categories: Associate (for individual companies in those countries that have no national association), Full (unites national agents and/or brokers associations in over 40 countries), and Club (for organizations, activities of which are very important for FONASBA). The main its function is promotion and protection of the interests of international ship agency and ship broking professions.
- What is Lloyds of London?
It is the most famous in the world insurance market. It consists of groups or syndicates of underwrites that are backed by the individuals’ personal wealth and limited companies that have already become specialists in the field of different kinds of non-marine and marine risks.
- What is a standard form of contract used by shipbrokers for the second hand sale and purchase of vessels? What other services may a sale and purchase shipbroker provide?
Standard form of contract is the Norwegian Sale Form, which is used in more than 80% of transactions. Sale and purchase brokers additionally estimate values of ships, which is formally done in the form of valuation certificates.
- According to the Baltic Code’s ethical practices, may an owner or owner’s broker offer its vessel “firm” to more than one charterer/cargo interest at a time? What is a “firm offer”?
No, he may offer the “firm” only for one cargo/charterer at a time. A principal may receive many firm offers, but he should always notify when he is out firm elsewhere. Firm offer is an irrevocable offer made by a merchant. “Fixture” should be arrived as the result of “firm offers” exchange between brokers and when it is concluded, limited to time and definite to terms, it is enforceable contract.
- What is the significance of the expression “OUR WORD OUR BOND”?
It is the motto of the exchange, incorporating the ethics importance in shipping. Members have to rely on one another and on the principals for all the contracts that are verbally expressed and then confirmed in writing form. It is an essential commitment of the Baltic Members.
- What is the Institute of Chartered Shipbrokers?
It is a London institute first formed in 1911. In it people can receive specialization in such occupations as tanker chartering, ship management, dry cargo chartering, port agency, liner trades, and sale and purchase. Professional qualification of the institute is respected throughout the whole globe. The Baltic offers all its members to study for examinations in the Institute to become its Members.
- Briefly describe the purpose of WORLDSCALE.
It is the New World-wide Tanker Nominal Freight Scale, which represents unified system of establishing payments of freight rates for the given cargo of oil tanker. The Worldscale organizations issue the Scale of Rates and Differentials on January 1 every year.
- Are brokers entitled to commissions on direct continuations of a time charter? Explain.
Yes, they are entitled to it. It is recommended to include this provision in the original time-charterparty or contract to avoid any possible dispute or legal consequences.
- What is the Paris MOU and why is it discussed in the Baltic Code?
It is the Paris Memorandum of Understanding, under which the local vessel inspections for compliance with all the applicable regulations are managed, allowing for Port State Control detentions and inspections.
- Briefly describe the history and major functions of the Baltic Exchange.
It is the oldest in the world shipping market. Its history starts from Virginia and Baltick Coffee House that was opened in 1744. In those times it was used by merchants having a major trade in tallow from the Baltic seaboard. In 1903 it was reorganized into the modern variant along with construction of its building in St Mary Axe. Today it is the most prestigious self-regulated market for buying and selling ships and matching ships with cargoes.
- Identify some of the members of IACS. What is the major function of a classification society?
The major function is surveying ships and ensuring their compliance with all relevant maintenance and construction requirements. Members of the IACS involve Det Nrske Veritas, Nippon Kaiji Kyokai, American Bureau of Shipping, Russian Maritime Rehister of Shipping, Bureau Veritas and some others.
Works Cited
The Baltic Exchange. The Baltic Code, 2012.
