Charter Parties & Bills of Lading

At RaetsMarine, we are always happy to advise you on Charter Parties, Bills of Lading and other forms of contract. We place great emphasis on our active risk and loss prevention policy, and as part of this service, our expert staff are always on hand to draft and recommend specific clauses and Charter Parties.

Charter Parties

Charter Parties can be classed as one of the following:

  • Time Charter Party

  • Voyage Charter Party

  • Booking Note

Time Charter Party

A Time Charter Party typically has the following key characteristics:

  • The shipowner is responsible for providing a seaworthy ship with valid classification, and a master and crew, so that the ship can be sailed safely to its final destination

  • The charterer is responsible for loading, stowing, and discharging cargo safely

  • The charterer is responsible for giving the master effective orders and instructions with regard to when and where the cargo should be shipped

  • The charterer is responsible for providing fuel for the vessel

Various forms of Time Charter Party exist, but the two most commonly used for dry cargo are the Baltime and the New York Produce Exchange (NYPE) Charter Parties. The Baltime is often considered to favour shipowners, while the NYPE is considered more advantageous for charterers. Charter Parties for tankers have the same main characteristics.

Voyage Charter Party

Voyage Charter Parties generally contain the following key agreements:

  • The type of cargo to be carried is agreed in advance

  • The ports to be visited are agreed in advance

  • It is the responsibility of the shipowner, not the charterer, to give instructions to the master

  • If liner terms (e.g., an inclusive freight rate) have been agreed, it is the shipowner who takes responsibility for the loading, stowage and discharge of cargo

  • If FIOS terms have been agreed, it is the charterer who takes responsibility for the loading, stowage and discharge of cargo

The standard Voyage Charter Party for dry cargo is the Gencon Charter Party. In the tanker trade, however, Charter Parties are usually based on the Asbatankvoy Charter Party.

Booking Note

A Booking Note is a contract that has been drawn up between either a CIF seller or an FOB buyer and a shipping company for the carriage of cargo. A Booking Note differs from other forms of contract in that, once the cargo is shipped, its terms and conditions are superseded by those in the Bill of Lading.

The standard model used for drawing up Booking Notes is the CONLINEBOOKING Liner Booking Note. This is typically used in conjunction with the CONLINE Liner Bill of Lading.

Bills of Lading

By signing the Bill of Lading, the carrier enters into a legally binding agreement to carry the cargo after it has been loaded onboard the vessel. The Bill provides evidence that the goods have been received for transportation and records the terms on which they are to be carried. It entitles the holder of the Bill to delivery of the cargo, and is needed in order to clear goods at the port of destination.

Key functions

A Bill of Lading has a number of key functions:

  • It provides evidence that the cargo was received on board the ship at a certain date and in a certain condition

  • It records the terms on which the goods are to be carried

  • It is a transferable document. It entitles the holder of the Bill to delivery of the cargo. If the goods are sold during the voyage, the Bill of Lading therefore also changes hands. Similarly, while it is usually the shipowner who signs the Bill of Lading and agrees to act as a carrier, the Bill of Lading can be signed by a different party, who then assumes responsibility for carriage

  • It is needed in order to clear goods at the port of destination

Types of Bills of Lading

Bills of Lading typically fall into one of four basic categories:

  • Congen Bill of Lading – used in combination with Charter Parties

  • Conline Bill of Lading – used by liners

  • Through Bill of Lading – A through bill of lading is a contract that covers the specific terms agreed to by a shipper and carrier when more than one type of transportation is being used.

  • Combined transport Bill of Lading – used when traded cargo is carried by multiple means of transport (e.g., it is transferred from one ship to another, or from ship to rail and then road)

Although many liner companies use their own Bills of Lading, with their own content or layout, their Bills of Lading are largely based on the standard Conline Bill of Lading.

Maximum clarity

The liabilities that flow from Bills of Lading can be extremely complex. We therefore need maximum clarity about your liabilities from the outset, so that we can determine the insurance cover and premium that will accurately reflect the level of risk involved.

That is why, for our standard cover, we require a warranty that all Bills of Lading are issued and signed by, or on behalf of, the master. Naturally, we can still provide insurance if a charterer chooses to sign the Bill of Lading himself, but in such cases, the premium will be higher, reflecting the higher level of risk borne by the insurer.

For the same reasons of clarity, our standard cover also requires that charterers do not voluntarily take on the role of carrier in a Bill of Lading. This is because as a carrier, your liabilities include matters over which you have no direct control (e.g., navigation, safety, compliance with ISM and ISPS and seaworthiness, which remain the responsibility of the master and the shipowner at all times).