What is the Sea Cargo Charter?
The Sea Cargo Charter permits the incorporation of climate factors into chartering processes, in order to support environmental-aligned maritime shipping. The Sea Cargo Charter creates a standard baseline for calculating and disclosing whether shipping operations comply in accordance with established climate objectives.
It sets a global framework for quantitatively evaluating chartering actions against climate targets. It is vital for making ethical decisions.
The UN’s International Maritime Organization has developed rules and goals that align with the Sea Cargo Charter, one of which is to cut the release of greenhouse gases from global shipping by at least 50 per cent by the year 2050.
Furthermore, the Sea Cargo Charter would encourage the decarbonization of global shipping by allowing cargo proprietors and owners of ships to coordinate their chartering operations with ethical environmental behavior.
Ameritrans Freight International Shipping conducts thousands of voyages in accordance with sea cargo charter. It allows sustainability in the maritime industry and break-bulk shipping.
Signatories apply the Sea Cargo Charter through corporate policies, procedures, and standards and ongoing collaboration with ship owners, distributors, and partners. The Sea Cargo Charter will grow to include more topics where charterers’ combined influence could improve the social impact of the business.
The sea cargo charter’s four fundamental concepts
The four main concepts of the Poseidon concepts are also shared by the Sea Cargo Charter, albeit the principles’ measurements are distinct. The Sea Cargo Charter emphasizes climate synchronization in the framework of chartering operations, whereas the Poseidon Principles concentrate on climate synchronization in the framework of capital finance.
Principle 1 – Evaluation of climate alignment
This concept offers a methodical approach to assessing how closely signatories’ actions match with the agreed-upon climate target. By establishing a standard procedure for computing the intensity of emissions and overall greenhouse gas emissions. It also offers the data required to monitor the decarbonization trajectories that are used to evaluate the alignment of signatories.
Principle 2 – Accountability
Signatories must only employ trustworthy data types, resources, and service providers in order to guarantee that the information supplied within the rules is realistic, objective, and truthful.
Principle 3 – Enforcement
The method for fulfilling the Sea Cargo Charter’s requirements is provided by this principle. To guarantee the gathering of data, it also contains the Sea Cargo Charter Clause, a suggested charter party agreement.
Principle 4 – Transparency
The transparency concept aims to guarantee that the public understands the contents of the Sea Cargo Charter and that the Charter’s Secretariat can promptly publish correct information. This concept is also essential for promoting behavioral change.
How to utilize sea cargo charter
The Sea Cargo Charter is applicable to charterers and for bulk-chartering.
a. Charterers can utilize sea cargo charter for these reasons:
- For charterers that are part of a charter party chain.
- Those that have a stake in the cargo on board.
- Charterers that passively charter out the ships they charter.
b. Bulk-chartering is the practice of using vessels for the following purposes:
- Global trade that is not maritime trade!
- Dry bulk transporters!
- Chemical vessels!
- Oil (crude and product) cargo vessels!
- Liquefied natural gas transporters!
- On-time or voyage agreements, such as agreements of shipment and parceling!
What is a cargo charter?
Ship chartering is the process of renting a ship. Some people may rent a ship based on their needs, just as they might rent an apartment or a car. It could be for moving people or things.
So, chartering or cargo charter can be viewed as the process of renting a ship. It starts with an agreement between the ship’s owner and another party. This deal is called a “charter party” in the shipping world. With this contract the shipowner retains authority over the voyages and operations of the vessel, but the charterer controls the maximum capacity for cargo.
The person who owns the ship is the ship owner, and the person who rents the ship is the charterer.
Sea cargo charter technical guidance
A charterer is someone who wants to rent a ship to carry either cargo or people. The charterer may or may not own the goods. The charterer may be taking it somewhere for someone else.
Sometimes, a charterer will rent a ship and then re-rent it to someone else for the transportation of goods or people in order to make money.
The charterer plans the ship’s trip and sea cargo charter clause when the ship is loading and unloading. As captain, he is in charge of keeping the ship, its crew, and its cargo safe.
The ship owner and the charterer both sign the charter agreement.
Shipbroker
Just like any other broker, a shipbroker helps a ship owner who wants to rent out his ship find the right customer. For their work, they charge the ship owner a fee or a commission. The commission could be a certain amount of the freight that the charterer pays to the ship owner.
A ship owner might hire a full-time shipbroker to help him or her get business. In the business of ship cargo, it is common to find brokers who only charter certain kinds of ships.
A shipbroker is not responsible for how the ship works or what it carries. He is just an intermediary between the ship owner and the person who wants to rent the ship.
Ship-owner
A ship owner is a person or company that owns registered commercial ships in their name with a ship registry. Merchant ships take goods or people for a fee.
Most ship-owners are members of either the regional chamber of shipping or the International Chamber of Shipping (ICS). This international group is in charge of making rules and running shipping businesses. The ICS also takes care of legal issues that come up in the shipping business.
Who makes these two groups meet?
Shipbrokers are very important because they find the right ship owner and charterer and help them agree on the terms of their deal.
Most of the time, someone who wants to lease a ship would go to a shipbroker to find the right ship for their needs.
As we can see, ship cargo involves three people: the ship owner, who owns the rented ship; the charterer, who wants to rent the ship cargo, and the shipbroker, who helped connect the two.
Ocean Cargo Charter
When discussing ocean cargo charter one needs to understand ship chartering. They are four main types of ship chartering and they are:
Voyage charter
This is the most common way to rent out a ship. Most of the time, a voyage charter involves renting both the ship and its crew for a trip between two or more ports. The rent depends on the amount or weight of the cargo carried on the trip, or a fixed amount.
The time charter
A time charter is when a ship is rented for a certain amount of time. As with other types of charter, you rent the boat and its crew for a certain amount of time. In the charter party, it will be clear what the terms and conditions of the trip are, as well as how long the ship will be hired for, what kind of cargo it will carry, etc.
In a time charter, the charterer may pay a rate based on the deadweight ton per day or per month for the ocean cargo charter. Also, under a time charter, the charterer is responsible for paying for the tanks and supplies used, while on a voyage charter, the owner is responsible for all costs associated with the journey (with respect to agreement for loading and unloading charges).
Bareboat charter
In a bareboat charter, the crew and management staff of the charterer are in charge of running and taking care of the boat. The ship owner will only be in charge of the ship’s technical management and things that have to do with how the port works.
During the charter party, it will be the charterer’s job to make sure the ship is safe and to settle
Cargo charter clause (Contract Charter)
The cargo charter clause is general in scope and demands the chief operator or despondent operator to submit a properly prepared fuel emission report in the appropriate format within seven days of the voyage’s conclusion. A yearly review process will be used to the sea cargo charter report.
Frequently asked question for sea cargo charter
How does the Poseidon Principle differ from Sea Cargo Charter?
The focus of the sea cargo charter is on the climate alignment focusing on chartering activities while the Poseidon principle focuses on the climate alignment with a focus on asset finance.
What are the four types of ship chartering?
- Voyager charter
- The time charter
- Bareboat charter
- Contract charter
Which is the most frequently used ship charter?
The voyager charter as it involves renting both the ship and its crew for a trip between two or more ports.
How does one charter a ship for cargo?
A contract is made between the charterer and the owner to use the ship, or a certain area of the ship, to carry his cargo. Sometimes the cargo is owned by the charterer, who works with a ship broker to locate an appropriate vessel to deliver the freight at a predetermined cost known as the freight cost.
How does a bill of lading differ from the charter party?
A charter party is a legal contract that specifies the requirements of leasing a vessel and is signed by the shipper and the ship owner. On the other hand, the bill of lading serves as a receipt and a title paperwork, proving that the items were received.
What is the difference between cargo and freight in the shipping industry?
‘Cargo’ implies goods that are sent overseas by maritime carriers as well as air providers, while ‘freight’ alludes to goods or items transported inland via truck or train.