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Seven types of counterparty: part three

Seven types of counterparty: part three

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Having dealt with the few Good charterers and glanced at the slightly more common Bad charterers, we come to the great soggy mass of dry cargo counterparties who, because of their charmless way of going about things, really deserve to be called Ugly.

It is quite possible for an owner and a charterer to conduct their business in a civilised manner, and even to become firm friends, but all too often communications resemble trench warfare, rather than a friendly chat. For this, owners are, in large measure, to blame.

A few years ago at the annual dinner of the London Maritime Arbitrators Association I found myself sitting next to an eminent Greek shipowner – so eminent, indeed, that his family name is to be found in the law reports of shipping cases as long ago as 1921 – who happily informed me that his hobby was litigation!

No wonder, then, that our counterparts approach us ‘lawyered up’, with speed and performance ‘experts’ breathing down the necks of our navigating officers (and, since the average speed and performance expert has a Second Mate’s ticket, and the Navigating Officer is a real Second Mate, they are evenly matched!)

The Ugly charterer assumes that, whilst the ship he has taken on is on passage, she will be doing all sorts of things without telling him. He may be right. In this respect, AIS has come to play a big role in chartering, because anyone can see whether a ship is giving a plausible ETA or not. The days of calmly wandering all over the ocean, or more likely breaking down, without anyone knowing, are over. Once the ship is in port the Ugly charterer expects the Master to be at his beck and call ‘24/7’ and to prepare stowage plans on the principle of Doctor Who’s Tardis. These stowage plans are to be put into operation with an absolute minimum of shore labour, of course, and the ship is expected to clean from pitch prill to sugar in 24 hours.

Ugly charterers are most likely to be found in the handy and handymax sector of the market; once we get into the world of big ships we are much more likely to find ourselves in the happy land of Gentlemen’s Shipping, where ships never find themselves up a river in Neverland discharging bagged rice into dugout canoes, where bills of lading usually do turn up, where the Customs service may even be honest, and where harassed ship operators are not expected to make bricks without straw.

6. The Operator

The handy sector, however, is much more of a rogue’s gallery. Some owners will include in the Ugly list any and all operators, on the grounds that they count every penny twice and often include in their staff some “’rather forceful’ characters, but I have known some perfectly charming and gentlemanly operators, who were none the less effective. If you fix to an Ugly operator, you have only yourself to blame, because absolutely everyone knows who they are. If you are fixed to one, there is nothing that your ship can do that an identical ship did not do much better a few weeks earlier, any payments heading in your direction will do so at glacial speed and your paperwork had better be perfect. Asking such a charterer’s agent to do anything at all for your ship will attract a bill at the speed of light, because the poor agent has been screwed into the ground already.

But the real problem with operators is that they have nicked almost all the nice end users! These super salesmen of the sea have smuggled themselves into bed with sweet innocent end users of cargo all over the globe. “Give us all your sea transport requirements and we will not only save you a fortune, but we will buy you lunch as well!” No, I do not know why some very nice cargoes are eternally in the pocket of some Ugly operators. It is a Mystery of the Sea.

7. The Pool Manager

“Pool managers really ought not to be Ugly. They are on the owner’s side, surely?”

Some may differ. Some may say that pool managers are on the pool manager’s side. Glance at any pool agreement and “You can”, as a colleague once said, “see the beer stains on it!” The agreement itself is full of bonhomie and hopelessly vague, but the pool charter party is a different matter.

Pool charter parties are built around the correct idea that pool managers ought to be very powerful indeed, in the interest of fairness, and are accordingly the sort of document that Draco himself would have approved of. Which is fine so long as everyone gets a fair shake – but in every pool that I have known, there have been dark suspicions that some owners are more equal than others when it comes to pool points and to nominations for nasty cargoes from nasty places. I remember very well one handymax which was contumaciously spurned when proposed for membership of a well known pool, as far beneath their notice, wrong gear wrong size wrong everything. Seven years later, in different ownership, she was the highest earning ship in that same pool.

Another Mystery of the Sea. Good luck, and happy chartering!

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Andrew Craig-Bennett

Andrew Craig-Bennett works for a well known Asian shipowner. Previous employers include Wallem, China Navigation, Charles Taylor Consulting and Swire Pacific Offshore. Andrew was also a columnist for Lloyd's List for a decade.

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