Chartering a vessel is a pretty complex task, carried out through a charter party, which involves a number of nuances and details. Specific knowledge is necessary, so charterers can make informed decisions and the charter can occur without any problems. This is extremely important as mistakes can lead to great losses.
So for us to fully understand the challenges of charterers within the Nigerian Maritime space, the MVX team conducted an online survey. We asked charterers about the most important decisions and nuances they consider before deciding on which vessel to charter. Here are the 3 major challenges:
Efficient Inventory Management — It’s no surprise that charterers are very much particular about inventory such as fuel oil, water, lube etc. -How it is managed and consumed during a charter.
Lower Vessel rate — Charterers are always on the look out for the best deal — this has often fostered the use of middle men on finding vessels, as Charterers look for the best deal possible.
Prompt Vessel Availability — The maritime industry includes multiple complex operations, so it is imperative that every hour counts towards achieving the desired objectives and goals. In order to avoid any unnecessary delay in the operations, prompt vessel availability is a must. MVX calendar and scheduler helps keep Charterers organized and prompted on the availability of vessels.
Here a couple of other common mistakes and pitfalls Charterers can avoid whilst deciding on what vessel to charter -
Not paying attention to market issues
The person who is chartering a ship must be aware of the market levels, that is, of the price of sea freight shipping or crude oil price. After all, shipping is considered a commodity and it experiences volatility.
The chartering professional has to keep an eye on what’s going on in the market. Therefore, it will be possible to identify the best moment to issue an order of need or search for a ship, as well as putting cargo on the market and buying or selling freight shipping.
Not knowing their counterpart
In chartering, it’s fundamental to know your counterpart, that is, the one you’re negotiating with! For that to happen, doing a credit check is essential. By acting in such a way, if a problem arises during the journey itself or the chartering, there is a guarantee that the hired company is fully capable of carrying on with that contract. Through a robust database and pre hire vessel inspection, MVX ensures Charterers have all the details needed to make an informed decision.
Not reading the details of the charter party
A charter party agreement, must be observed in all its details. Not paying attention to those details in the contract is a big mistake. Remember that the charter party contains information about day rate, demurrage, and even dispatch. MVX has partnered with Lagos based high profile maritime law firm, Olisa Agbakoba Legal (OAL) to provide free BIMCO Charter Party Agreement (CPA) review and advisory services. Once a vessel is deemed fit for charter by a charterer on our platform, a copy of the parties BIMCO CPA is instantly sent to OAL for review and an opinion given in less than 24hrs.
