Ten operating methods of ocean shipping

Ocean Freight (Ocean Freight) is broadly defined as all ocean-related business activities. But up to now, what we have mentioned about maritime transportation is generally maritime transportation, such as bulk cargo transportation, container transportation and other port-to-port marine transportation. According to the ship's operating mode, it can be divided into:

Liner Transport

Ships along a fixed route, through a fixed port, transport goods according to the fixed schedule announced in advance, and charge freight at the rate announced in advance. The carrier is responsible for loading and unloading the cargo. The freight has already included the loading and unloading costs of the goods. The carrier and the shipper do not count the demurrage and dispatch fees. Due to timing, route, port and pricing, the uncertainty of liner transportation is relatively small. In order to ensure the schedule, the liner ships are generally well-equipped and in good condition. There are dedicated terminals of the liner company at the piers where the liner calls, and the quality of freight is guaranteed. The goods are generally small-value trade goods, and now they are mostly containers as the transport unit, and the bill of lading is the main transport document.

Shipping by Chartering

Chartered transportation is also called non-scheduled transportation. There is no scheduled schedule, route, port, and the ship completes transportation services in accordance with the terms of the charter contract signed by the charterer and the owner. According to the agreement, the shipowner leases the ship to the charterer for use, completes specific freight tasks, and collects freight at the agreed freight rate. The cargoes transported by chartered vessels are mainly low-value bulk cargoes, such as coal, ore, grain, fertilizer, cement, wood, oil, etc. Generally, it is shipped on a whole ship, and the volume is large, and the volume of chartered shipping accounts for about 80% of the total maritime freight volume. The freight rate is relatively low, and the freight rate fluctuates with the changes in market conditions. There are three main ways to charter ships: voyage charter, time charter and bareboat charter:

Voyage Charter

Voyage charter is also called voyage charter, which is a chartering method based on voyage. Under this chartering method, the ship party must complete the cargo transportation service according to the voyage specified in the charter contract, and be responsible for the ship’s operation and management as well as all expenses in the voyage. The charterer pays the freight as agreed. The voyage charter party stipulates the time limit or rate of loading and unloading, and calculates the demurrage and dispatch charges. Voyage charters can be divided into one-way charters, round-trip charters, consecutive voyage charters, voyage time charters, and charter charters:

Single Voyage Charter

One-way charter is also called single voyage charter, that is, the chartered ship is only loaded on one voyage, and the charter contract is terminated when the voyage ends. Freight is negotiated by both parties according to the chartering market, and its calculation method is generally calculated by multiplying the freight rate by the number of loading or unloading or according to the whole ship's package freight.

Round Trip Charter

Round-trip chartering is also called round-trip voyage chartering, that is, the chartering contract stipulates that after completing a voyage, another return cargo is loaded. Sometimes the freight is calculated separately according to the different round-trip cargo.

Consecutive Trip Charter

That is, several consecutive voyages are shipped on the same route. Often the cargo volume is large, and when a voyage cannot be completed, such a charter method can be used. In this case, the average voyage rent is lower than the single voyage rent.

Trip Charter on Time Basis

Voyage time charter is also called time charter voyage charter. The charter of the ship adopts the voyage charter method, but the rent is calculated based on the time (days) required for the voyage. This way of chartering a ship does not include demurrage and dispatch costs, and the ship is not responsible for the management of cargo transportation.

Contract of Affreightment (Contract of Affreightment)

The shipowner will send a number of ships within the agreed time limit to transport a large number of cargo from one port to another under the same charter conditions. The number of voyages is not specified, and the contract is for the cargo to be transported. This chartering method can reduce the pressure of chartering. For the shipowner, it is more flexible in operation. You can use your own ship to carry it, or you can rent another ship to complete the required freight tasks; you can use one ship multiple times For round-trip transportation, several boats can also be used for transportation at the same time. The cargoes transported under a charter contract are usually bulk low-value bulk cargoes.

Time Charter

Time charter is abbreviated as time charter, which refers to a chartering method based on the lease term. During the charter period, the charterer pays the rent as agreed to obtain the right to use the ship, and is also responsible for the dispatch and management of the ship. Time charter rents are generally calculated based on a certain amount per month of the ship’s deadweight ton. The charter period can be long or short, as short as a few months, and as long as five years or more, even until the ship is scrapped. The object of time charter is the entire ship. The ship’s route and port of call are not specified, but only the sailing area. Therefore, the charterer can choose the route and port of call according to the cargo needs to facilitate the use and operation of the ship. Time charter also does not make specific provisions on the goods shipped by the ship, and can choose any suitable goods; the charterer has the right to dispatch the ship and is responsible for the operation of the ship, paying for marine fuel, various port fees, taxes, cargo handling and other expenses. No demurrage clause is provided.

Bare Boat Charter

Bareboat charter is also a kind of time charter. The difference is that the owner does not provide crews, and only hands over an empty boat to the charterer. The charterer shall staff the charter by himself and be responsible for the management and navigation of the ship. For shipowners, they generally don’t feel relieved to hand over the ship to the charterers; for the charterers, hiring and managing the crew is very complicated, and charterers rarely use this method. Therefore, bareboat chartering is rarely used in the chartering market.