Master and Mates Business and Law Questions and answers
1.)What are INCOTERMS?
A set of uniform rules which codify the interpretation of trade terms defining the obligations and rights of the seller and buyer in an international sale of goods transaction, i. e. who pays for what, and who is responsible for what. INCOTERMS enable an otherwise complex basis for a sale contract to be accomplished in three letters.
2.)How many INCOTERMS are there?
Thirteen, but some of them are not appropriate for use in contracts involving sea carriage.
3.)Which INCOTERMS are appropriate for use in contracts involving sea carriage?
FCA, FAS, FOB, CFR, CIF and CPT
4.)Which are the two most important INCOTERMS in sea transport?
FOB and CIF.
5.)What does FOB stand for?
Free On Board (named port of loading).
6.)What does CIF stand for?
Cost, Insurance and Freight (named port of discharge).
7.)What are the main responsibilities of the seller when goods are sold under'FOB Colombo'?
The seller must bear all costs and risks until the goods have passed the ship's rail at the loading port (Colombo). He must obtain a bill of lading and any other necessary documents and send them to the buyer
8.)What are the main responsibilities of the buyer when goods are sold 'FOB Colombo'?
The buyer must charter a ship or reserve the necessary space on a ship and give the seller details of the ship, the loading berth and loading dates. The buyer must bear all costs and risks after the goods pass the ship's rail at the loading port (Colombo). He must pay the seller's expenses for obtaining the documentation
9.)What is the main benefit to the buyer when he buys on an FOB basis?
He can sell the goods once he has received the documents (which he should soon after loading). The goods may therefore be sold while on the voyage, which may be essential in the case of oil, grain and other bulk commodities traded on international markets.
10.)What are the main responsibilities of the seller and buyer when goods are sold on a CIF basis?
The seller must pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss of or damage to the goods, and of any cost increases, is transferred from the seller to the buyer when the goods pass the ship's rail at the loading port. The seller must also, on behalf of the buyer, obtain insurance cover for the carriage.
11.)What are the main responsibilities of the seller and buyer when goods are sold 'CIF Colombo'?
The seller must pay the costs of the goods and the insurance and freight to Colombo. The buyer must pay all costs, including duty, after delivery of goods on board the ship at Colombo.
12.)What is the main benefit of a CIF contract?
CIF allows the sale of the goods by the sale of the documents, and is therefore the preferred trade term where the documentary credit system is used. The banks involved can obtain security for their credit advance by holding the documents that represent the goods.
13.)What is a Letter of Credit?
An undertaking issued by a bank, on behalf of the buyer (importer), to the seller (exporter), to pay for goods and/or services, provided that the seller presents documents which comply fully with the terms and conditions of the Letter of Credit. It may also be called a documentary credit.
14.)What is the purpose of a Letter of Credit?
To enable the seller to receive payment for the goods soon after shipment. The LOC contains the conditions under which payment may be made and to which the banks involved must adhere.
15.)In simple terms, how does a Letter of Credit operate?
The seller and buyer agree in their sale contract that payment will be made using a Letter of Credit (LOC). The buyer instructs his bank to open a Credit in favour of the seller, and that bank sends the LOC to the seller's nominated bank. The seller ships the goods, obtains the documents required by the LOC and presents them to his bank, which checks the documents for compliance with the LOC before making payment The documents are passed to the buyer's bank (in return for payment), which debits the buyer's account before passing the documents to him.
16.)What documents are typically required to be obtained by the seller under the terms of a Letter of Credit?
(1 ) A set of original, clean, on-board bills of lading made out 'to order';
(2) a commercial invoice; and
(3) a certificate of insurance.
17.)What security does a bank involved in a Letter of Credit transaction have in return for the sum advanced(basically if buyer does not pay for the goods, what the bank can do?)?
It has possession of the documents giving title to the goods (i. e. the 'order' bills of lading), and thus has constructive possession of the goods. Should the buyer not be able to pay or take delivery of the goods for some reason, the bank will be in a position to sell the goods. If the goods are damaged, the bank can claim on the insurance certificate, which it will have.
18.)What is a shipper?
A company or person who contracts with a carrier for the carriage of goods by sea. In shipping documents the shipper may be called 'the merchant'.
19.)Is the shipper always the seller or exporter of the goods?
No. Many sellers and exporters employ an agent (e. g. a freight forwarder) to arrange for the shipment, and in that case the freight forwarder may legally be the shipper in the contractual relationship with the carrier(ship). The shipper may be thought of as the party from whom goods are received by the carrier on board the vessel, i. e. the party actually shipping them.
20.)What is a freight forwarder?
A party who arranges the export or import of another party's goods (by sea, air, rail or road). Where he is arranging the export of goods he acts as the shipper's agent. For imports he may be the consignee's agent. In his contractual relationship with the carrier he may legally be a shipper.
21.)By what other name are freight forwarders sometimes known?
Shipping and forwarding agents.
22.)In which trades are freight forwarders employed: liner, dry bulk or tanker?
In the liner trades (i. e. container, ro-ro and general cargo).
23.)What services can freight forwarders usually provide for exporters?
They can
(1) give expert advice on routeing (cheapest, quickest, safest);
(2) arrange carriage with a carrier (i. e. booking space, paying freight, etc. );
(3) prepare or assist in preparation of shipping documents;
(4) make customs entry (clearance) of goods;
(5) arrange packaging and warehousing of goods before shipment;
(6) arrange goods transit insurance;
(7) arrange groupage or consolidation (e. g. in an LCL container) with other shippers' goods destined for the same place.
Most forwarders can usually carry out any or all of these functions as required by the shipper.
24.)What is groupage or consolidation?
The grouping in one cargo unit (e. g. an LCL container) of the goods of two or more shippers, where all the shipments are destined for the same place in the import country, e. g. an inland container depot. A groupage container is known as an LCL container. Groupage is cheaper for the shipper, since LCL freight rates are lower than FCL rates. Many freight forwarders and carriers offer both LCL and FCL services for shippers. (basically one container includes different shippers goods to one destination)
25.)Where is groupage or consolidation carried out, and who is it done by?
Usually at a container freight station or inland container depot, by a freight forwarder offering this service.
26.)What happens to groupage cargo at its destination(what will happen to LCL container)?
The individual shipments of goods in the LCL unit are de-consolidated and dispersed to their various consignees (or receivers).
27.)What is an LCL shipment?
A 'less than container load', i. e. a shipment which would not fill a container and could therefore be grouped or consolidated in one cargo unit with other goods destined for the same place in the import country.
28.)What is an FCL shipment?
A full container load, which would not need groupage or consolidation. An FCL shipment, e. g. a container-load of TEA Packs, might be loaded into the container or trailer at the shipper's premises
29.)What is a consignee?
The party to whom goods are consigned, i. e. sent, by a shipper. The consignee is the importer, but may employ a freight forwarder to look after the import formalities. If the goods arrive damaged, the consignee is usually the party who makes a claim (either against the carrier or on a cargo insurance policy).
30.)In a cargo shipping context, who is the receiver?
The party who takes delivery of the goods from the carrier at the destination port or terminal. This may be the consignee, or another party (e. g. a haulier) acting on his behalf.
31.)Difference between consignee,receiver, freight forwarder?
Consignee - is the importer,
Freight forwarder - consignee may employ a freight forwarder to look after the import formalities
Receiver - consignee, or another party transporting the goods from the ship at the port.
32.)In a cargo shipping context, who is the notify party(whom to tell that the cargo is arrived)?
The party who the carrier is instructed (by the shipper) to notify when the goods have arrived at their destination, so that collection can be arranged. The notify party's name and address usually appears on the bill of lading or sea waybill.
33.)How can cargo insurance be arranged by a shipper?
(1 ) Direct from an insurance company;
(2) from company underwriters
(3) from Lloyd's underwriters; or
(4) through a freight forwarder, in each case usually through a broker. Some liner carriers, such as P&O Nedlloyd, offer transit insurance as part of a package of services.
34.)What are the chief markets in which Shipbrokers operate?
The dry cargo market and the tanker market. In both markets there is a voyage charter (or 'spot') market and a time charter market.
35.)What are the functions of Shipbrokers in the dry cargo and tanker markets?
To find employment for ships, and to find suitable sea transport for the carriage of a cargo.
36.)What are the various types of broker?
Owners' brokers, charterers' brokers, tanker brokers, coasting brokers, heavy lift brokers, sale and purchase brokers and various other brokers in sub-markets. Many ships' agents are Shipbrokers.
37.)How are Shipbrokers paid for their services?
They earn commission, called brokerage, normally at an industry standard rate of 1. 25% of the gross freight or hire rate negotiated for each broker involved in the negotiations of a 'fixture'.
38.)What is the Shipbrokers' professional body?
The Institute of Chartered Shipbrokers, which is based in London. Ships' officers may sit ICS examinations and gain Membership.
39.)What is the Baltic Exchange, and where is it?
The world's chief shipbroking market, situated in the City of London
40.)How has the role of the Baltic Exchange changed in modern times?
Although some trading is still done face-to-face between member brokers on The Floor' of the Exchange, most communications between Shipbrokers involved in a fixture are now made by electronic means, since the brokers may be in two or more countries. The Baltic is in effect a communications 'hub' and a key source of market information. Most London brokers and many overseas brokers are members of the Baltic Exchange
41.)What kind of businesses are the major charterers in the dry bulk markets do?
Major exporters and importers of iron ore, grain, coal, forest products, sugar, etc.
42.)What kind of businesses are major charterers in the tanker markets do?
Oil companies and governments which buy oil. A large oil company will typically have on any given day a core fleet of owned tankers, an additional number of tankers chartered-in on a time charter basis and a large number of voyage chartered tankers.
43.)Are the tankers owned by an oil company normally employed carrying the company's own oil?
Not necessarily. When an oil company can earn more by chartering its own ships out to another company, it usually will. Thus it is not uncommon to find a BP tanker chartered to Shell, etc. Independently-owned tankers time-chartered to oil companies are also often employed on voyage charters to third parties.
44.)In what sort of circumstances might a liner company charter-in ships?
When, for example, there is an upturn in trade that cannot be met by capacity in its own fleet, or when an owned ship is out of service for repairs or routine dry-docking.
45.)In carriage of goods law, who or what is a carrier?
A party (usually a company) who contracts with a shipper or merchant for the carriage of goods. The carrier is not always a shipowner
46.)Where a shipowner timecharters a vessel and employs it in his own liner service, who will the carrier normally be?
Where the time charterer issues his own bill of lading (as is the case with many liner companies which charter ships in), he will be the carrier. Where the ship issues its own bill of lading, however, the shipowner will probably be regarded as the legal carrier.
47.)What is an NVOC or NVOCC?
A non-vessel-operating carrier (or common carrier), which is a company operating a goods shipping service using space reserved on another company's vessel. Some NVOCCs hire containership 'slots' from shipowners (for which purpose the Slothire charterparty was developed), while others charter entire vessels. An NVOCC thus has one contractual relationship with the exporter or merchant, and another with the owner or operator of the carrying ship. Many NVOC(C)s are operating in the liner trades worldwide.
48.)What is a liner agent or liner broker?
A company acting as a local agent for one or more (and often several) carriers, selling and booking space on board the carrier's vessels, and obtaining this business from local shippers. A big carrier is likely to have a network of liner agents in the main towns of every country served by the line's sailings.
49.)What is a shipmaster's legal position in relation to a time charterer?
The master should follow a time charterer's instructions in sofar as they relate to the commercial activities of the ship, e. g. voyage orders, issuing bills of lading, sending messages, etc. There will usually be a clause in the charterparty stating that:
(1) the charterers are to give the master the necessary sailing instructions;
(2) the master is to be under the orders of the charterer as regards employment, agency, or other arrangements;
(3) the master is to prosecute the voyage with the utmost despatch and render customary assistance (to the charterer) with the vessel's crew;
(4) the master (and chief engineer) are to keep proper logs accessible to the charterers and their agents; and
(5) if the charterers are dissatisfied with the conduct of the master (or other officers), the owners will investigate the matter and, if necessary and practicable, change the appointments
50.)What is a shipmaster's legal position in relation to a voyage charterer?
The master must perform the voyage in accordance with the agreement (the charterparty) made between the shipowner and the charterer. Unlike a time charter, this does not usually give the charterer control over the commercial activities of the ship.
51.)What is a shipmaster's legal position in relation to an owner of cargo?
The master, as the carrier's representative, is the bailee of the cargo, and as such is responsible for the proper care and delivery in good condition of the goods. The master should look after the cargo as if it were his own uninsured property.
52.)In what circumstances might a shipmaster become an agent of necessity?
In some emergency event when it is impossible to get instructions from the cargo owner but there is a real and definite commercial necessity to act on his behalf to preserve the cargo. This may be the case in war or salvage situations. In most cases, however, it will be possible to receive instructions.
53.)What is a supercargo?
A person (most often a qualified deck officer) who is employed by a charterer or cargo owner to oversee the loading, carriage and/or discharge of goods or some operation on board a ship, usually where there is some complexity about the cargo or the operation. A supercargo will often sail on board the ship under a term in the charterparty. As the charterer's representative he has considerable importance, although he has no right to interfere with navigational decisions made by the master in the interests of safety
54.)What are the primary duties of a port agent?
To look after the needs of his principal's ship and its crew during their stay in port. The agent should:
(1 ) aim for the quickest possible turn-round with maximum efficiency and minimum cost;
(2) assist the master in his dealings with officials;
(3) procure provisions, stores and other requirements; and
(4) communicate messages between owners/time charterers and the master.
55.)Who is the agent's principal?
If the shipowner is paying the agent's fee, he will normally be the principal, regardless of whether a charterer or other party has nominated the agent.
56.)Why might a charterer want to nominate an agent?
To ensure that the agent employed will suit the charterer's particular interests. It is commonly agreed in time charters that the charterer (who controls the commercial operations of a time-chartered ship) will nominate a particular agent to be appointed at a port, while the shipowner will pay the agency fee.
57.)Where the agent nominated by a time charterer did not appear to be giving due attention to the ship's business, what could you do as master?
(1) Remind him of his primary responsibility to the ship; and/or
(2) advise the owners to appoint a husbandry agent (i. e. another agent whose duties would be solely to look after the ship's business and not the cargo operations).
58.)
A set of uniform rules which codify the interpretation of trade terms defining the obligations and rights of the seller and buyer in an international sale of goods transaction, i. e. who pays for what, and who is responsible for what. INCOTERMS enable an otherwise complex basis for a sale contract to be accomplished in three letters.
2.)How many INCOTERMS are there?
Thirteen, but some of them are not appropriate for use in contracts involving sea carriage.
3.)Which INCOTERMS are appropriate for use in contracts involving sea carriage?
FCA, FAS, FOB, CFR, CIF and CPT
4.)Which are the two most important INCOTERMS in sea transport?
FOB and CIF.
5.)What does FOB stand for?
Free On Board (named port of loading).
6.)What does CIF stand for?
Cost, Insurance and Freight (named port of discharge).
7.)What are the main responsibilities of the seller when goods are sold under'FOB Colombo'?
The seller must bear all costs and risks until the goods have passed the ship's rail at the loading port (Colombo). He must obtain a bill of lading and any other necessary documents and send them to the buyer
8.)What are the main responsibilities of the buyer when goods are sold 'FOB Colombo'?
The buyer must charter a ship or reserve the necessary space on a ship and give the seller details of the ship, the loading berth and loading dates. The buyer must bear all costs and risks after the goods pass the ship's rail at the loading port (Colombo). He must pay the seller's expenses for obtaining the documentation
9.)What is the main benefit to the buyer when he buys on an FOB basis?
He can sell the goods once he has received the documents (which he should soon after loading). The goods may therefore be sold while on the voyage, which may be essential in the case of oil, grain and other bulk commodities traded on international markets.
10.)What are the main responsibilities of the seller and buyer when goods are sold on a CIF basis?
The seller must pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss of or damage to the goods, and of any cost increases, is transferred from the seller to the buyer when the goods pass the ship's rail at the loading port. The seller must also, on behalf of the buyer, obtain insurance cover for the carriage.
11.)What are the main responsibilities of the seller and buyer when goods are sold 'CIF Colombo'?
The seller must pay the costs of the goods and the insurance and freight to Colombo. The buyer must pay all costs, including duty, after delivery of goods on board the ship at Colombo.
12.)What is the main benefit of a CIF contract?
CIF allows the sale of the goods by the sale of the documents, and is therefore the preferred trade term where the documentary credit system is used. The banks involved can obtain security for their credit advance by holding the documents that represent the goods.
13.)What is a Letter of Credit?
An undertaking issued by a bank, on behalf of the buyer (importer), to the seller (exporter), to pay for goods and/or services, provided that the seller presents documents which comply fully with the terms and conditions of the Letter of Credit. It may also be called a documentary credit.
14.)What is the purpose of a Letter of Credit?
To enable the seller to receive payment for the goods soon after shipment. The LOC contains the conditions under which payment may be made and to which the banks involved must adhere.
15.)In simple terms, how does a Letter of Credit operate?
The seller and buyer agree in their sale contract that payment will be made using a Letter of Credit (LOC). The buyer instructs his bank to open a Credit in favour of the seller, and that bank sends the LOC to the seller's nominated bank. The seller ships the goods, obtains the documents required by the LOC and presents them to his bank, which checks the documents for compliance with the LOC before making payment The documents are passed to the buyer's bank (in return for payment), which debits the buyer's account before passing the documents to him.
16.)What documents are typically required to be obtained by the seller under the terms of a Letter of Credit?
(1 ) A set of original, clean, on-board bills of lading made out 'to order';
(2) a commercial invoice; and
(3) a certificate of insurance.
17.)What security does a bank involved in a Letter of Credit transaction have in return for the sum advanced(basically if buyer does not pay for the goods, what the bank can do?)?
It has possession of the documents giving title to the goods (i. e. the 'order' bills of lading), and thus has constructive possession of the goods. Should the buyer not be able to pay or take delivery of the goods for some reason, the bank will be in a position to sell the goods. If the goods are damaged, the bank can claim on the insurance certificate, which it will have.
18.)What is a shipper?
A company or person who contracts with a carrier for the carriage of goods by sea. In shipping documents the shipper may be called 'the merchant'.
19.)Is the shipper always the seller or exporter of the goods?
No. Many sellers and exporters employ an agent (e. g. a freight forwarder) to arrange for the shipment, and in that case the freight forwarder may legally be the shipper in the contractual relationship with the carrier(ship). The shipper may be thought of as the party from whom goods are received by the carrier on board the vessel, i. e. the party actually shipping them.
20.)What is a freight forwarder?
A party who arranges the export or import of another party's goods (by sea, air, rail or road). Where he is arranging the export of goods he acts as the shipper's agent. For imports he may be the consignee's agent. In his contractual relationship with the carrier he may legally be a shipper.
21.)By what other name are freight forwarders sometimes known?
Shipping and forwarding agents.
22.)In which trades are freight forwarders employed: liner, dry bulk or tanker?
In the liner trades (i. e. container, ro-ro and general cargo).
23.)What services can freight forwarders usually provide for exporters?
They can
(1) give expert advice on routeing (cheapest, quickest, safest);
(2) arrange carriage with a carrier (i. e. booking space, paying freight, etc. );
(3) prepare or assist in preparation of shipping documents;
(4) make customs entry (clearance) of goods;
(5) arrange packaging and warehousing of goods before shipment;
(6) arrange goods transit insurance;
(7) arrange groupage or consolidation (e. g. in an LCL container) with other shippers' goods destined for the same place.
Most forwarders can usually carry out any or all of these functions as required by the shipper.
24.)What is groupage or consolidation?
The grouping in one cargo unit (e. g. an LCL container) of the goods of two or more shippers, where all the shipments are destined for the same place in the import country, e. g. an inland container depot. A groupage container is known as an LCL container. Groupage is cheaper for the shipper, since LCL freight rates are lower than FCL rates. Many freight forwarders and carriers offer both LCL and FCL services for shippers. (basically one container includes different shippers goods to one destination)
25.)Where is groupage or consolidation carried out, and who is it done by?
Usually at a container freight station or inland container depot, by a freight forwarder offering this service.
26.)What happens to groupage cargo at its destination(what will happen to LCL container)?
The individual shipments of goods in the LCL unit are de-consolidated and dispersed to their various consignees (or receivers).
27.)What is an LCL shipment?
A 'less than container load', i. e. a shipment which would not fill a container and could therefore be grouped or consolidated in one cargo unit with other goods destined for the same place in the import country.
28.)What is an FCL shipment?
A full container load, which would not need groupage or consolidation. An FCL shipment, e. g. a container-load of TEA Packs, might be loaded into the container or trailer at the shipper's premises
29.)What is a consignee?
The party to whom goods are consigned, i. e. sent, by a shipper. The consignee is the importer, but may employ a freight forwarder to look after the import formalities. If the goods arrive damaged, the consignee is usually the party who makes a claim (either against the carrier or on a cargo insurance policy).
30.)In a cargo shipping context, who is the receiver?
The party who takes delivery of the goods from the carrier at the destination port or terminal. This may be the consignee, or another party (e. g. a haulier) acting on his behalf.
31.)Difference between consignee,receiver, freight forwarder?
Consignee - is the importer,
Freight forwarder - consignee may employ a freight forwarder to look after the import formalities
Receiver - consignee, or another party transporting the goods from the ship at the port.
32.)In a cargo shipping context, who is the notify party(whom to tell that the cargo is arrived)?
The party who the carrier is instructed (by the shipper) to notify when the goods have arrived at their destination, so that collection can be arranged. The notify party's name and address usually appears on the bill of lading or sea waybill.
33.)How can cargo insurance be arranged by a shipper?
(1 ) Direct from an insurance company;
(2) from company underwriters
(3) from Lloyd's underwriters; or
(4) through a freight forwarder, in each case usually through a broker. Some liner carriers, such as P&O Nedlloyd, offer transit insurance as part of a package of services.
34.)What are the chief markets in which Shipbrokers operate?
The dry cargo market and the tanker market. In both markets there is a voyage charter (or 'spot') market and a time charter market.
35.)What are the functions of Shipbrokers in the dry cargo and tanker markets?
To find employment for ships, and to find suitable sea transport for the carriage of a cargo.
36.)What are the various types of broker?
Owners' brokers, charterers' brokers, tanker brokers, coasting brokers, heavy lift brokers, sale and purchase brokers and various other brokers in sub-markets. Many ships' agents are Shipbrokers.
37.)How are Shipbrokers paid for their services?
They earn commission, called brokerage, normally at an industry standard rate of 1. 25% of the gross freight or hire rate negotiated for each broker involved in the negotiations of a 'fixture'.
38.)What is the Shipbrokers' professional body?
The Institute of Chartered Shipbrokers, which is based in London. Ships' officers may sit ICS examinations and gain Membership.
39.)What is the Baltic Exchange, and where is it?
The world's chief shipbroking market, situated in the City of London
40.)How has the role of the Baltic Exchange changed in modern times?
Although some trading is still done face-to-face between member brokers on The Floor' of the Exchange, most communications between Shipbrokers involved in a fixture are now made by electronic means, since the brokers may be in two or more countries. The Baltic is in effect a communications 'hub' and a key source of market information. Most London brokers and many overseas brokers are members of the Baltic Exchange
41.)What kind of businesses are the major charterers in the dry bulk markets do?
Major exporters and importers of iron ore, grain, coal, forest products, sugar, etc.
42.)What kind of businesses are major charterers in the tanker markets do?
Oil companies and governments which buy oil. A large oil company will typically have on any given day a core fleet of owned tankers, an additional number of tankers chartered-in on a time charter basis and a large number of voyage chartered tankers.
43.)Are the tankers owned by an oil company normally employed carrying the company's own oil?
Not necessarily. When an oil company can earn more by chartering its own ships out to another company, it usually will. Thus it is not uncommon to find a BP tanker chartered to Shell, etc. Independently-owned tankers time-chartered to oil companies are also often employed on voyage charters to third parties.
44.)In what sort of circumstances might a liner company charter-in ships?
When, for example, there is an upturn in trade that cannot be met by capacity in its own fleet, or when an owned ship is out of service for repairs or routine dry-docking.
45.)In carriage of goods law, who or what is a carrier?
A party (usually a company) who contracts with a shipper or merchant for the carriage of goods. The carrier is not always a shipowner
46.)Where a shipowner timecharters a vessel and employs it in his own liner service, who will the carrier normally be?
Where the time charterer issues his own bill of lading (as is the case with many liner companies which charter ships in), he will be the carrier. Where the ship issues its own bill of lading, however, the shipowner will probably be regarded as the legal carrier.
47.)What is an NVOC or NVOCC?
A non-vessel-operating carrier (or common carrier), which is a company operating a goods shipping service using space reserved on another company's vessel. Some NVOCCs hire containership 'slots' from shipowners (for which purpose the Slothire charterparty was developed), while others charter entire vessels. An NVOCC thus has one contractual relationship with the exporter or merchant, and another with the owner or operator of the carrying ship. Many NVOC(C)s are operating in the liner trades worldwide.
48.)What is a liner agent or liner broker?
A company acting as a local agent for one or more (and often several) carriers, selling and booking space on board the carrier's vessels, and obtaining this business from local shippers. A big carrier is likely to have a network of liner agents in the main towns of every country served by the line's sailings.
49.)What is a shipmaster's legal position in relation to a time charterer?
The master should follow a time charterer's instructions in sofar as they relate to the commercial activities of the ship, e. g. voyage orders, issuing bills of lading, sending messages, etc. There will usually be a clause in the charterparty stating that:
(1) the charterers are to give the master the necessary sailing instructions;
(2) the master is to be under the orders of the charterer as regards employment, agency, or other arrangements;
(3) the master is to prosecute the voyage with the utmost despatch and render customary assistance (to the charterer) with the vessel's crew;
(4) the master (and chief engineer) are to keep proper logs accessible to the charterers and their agents; and
(5) if the charterers are dissatisfied with the conduct of the master (or other officers), the owners will investigate the matter and, if necessary and practicable, change the appointments
50.)What is a shipmaster's legal position in relation to a voyage charterer?
The master must perform the voyage in accordance with the agreement (the charterparty) made between the shipowner and the charterer. Unlike a time charter, this does not usually give the charterer control over the commercial activities of the ship.
51.)What is a shipmaster's legal position in relation to an owner of cargo?
The master, as the carrier's representative, is the bailee of the cargo, and as such is responsible for the proper care and delivery in good condition of the goods. The master should look after the cargo as if it were his own uninsured property.
52.)In what circumstances might a shipmaster become an agent of necessity?
In some emergency event when it is impossible to get instructions from the cargo owner but there is a real and definite commercial necessity to act on his behalf to preserve the cargo. This may be the case in war or salvage situations. In most cases, however, it will be possible to receive instructions.
53.)What is a supercargo?
A person (most often a qualified deck officer) who is employed by a charterer or cargo owner to oversee the loading, carriage and/or discharge of goods or some operation on board a ship, usually where there is some complexity about the cargo or the operation. A supercargo will often sail on board the ship under a term in the charterparty. As the charterer's representative he has considerable importance, although he has no right to interfere with navigational decisions made by the master in the interests of safety
54.)What are the primary duties of a port agent?
To look after the needs of his principal's ship and its crew during their stay in port. The agent should:
(1 ) aim for the quickest possible turn-round with maximum efficiency and minimum cost;
(2) assist the master in his dealings with officials;
(3) procure provisions, stores and other requirements; and
(4) communicate messages between owners/time charterers and the master.
55.)Who is the agent's principal?
If the shipowner is paying the agent's fee, he will normally be the principal, regardless of whether a charterer or other party has nominated the agent.
56.)Why might a charterer want to nominate an agent?
To ensure that the agent employed will suit the charterer's particular interests. It is commonly agreed in time charters that the charterer (who controls the commercial operations of a time-chartered ship) will nominate a particular agent to be appointed at a port, while the shipowner will pay the agency fee.
57.)Where the agent nominated by a time charterer did not appear to be giving due attention to the ship's business, what could you do as master?
(1) Remind him of his primary responsibility to the ship; and/or
(2) advise the owners to appoint a husbandry agent (i. e. another agent whose duties would be solely to look after the ship's business and not the cargo operations).
58.)