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Wednesday, September 19, 2018


For the first time in recent years we have a sustained strong market across several segments of the tanker market. Owners may also be in a better position to negotiate more balanced charter terms than in periods of tanker market depression.

Reports from members suggest that it is indeed easier to secure the inclusion of balanced provisions than it was just a short while ago.

It is not INTERTANKO’s role, nor is it legal for INTERTANKO to organise any concerted effort on behalf of tanker owners, to secure the use of any specific charter party forms or chartering terms. It is, however, timely to remind owners of the importance of the charter party terms reflecting the real world operation of tankers and to continue to provide legal analyses of the implications of various forms and charter party clauses.

In times of good tanker market conditions we all know from the past that the focus on Worldscale points tend to take precedence over the continued work to ensure that unbalanced, open ended charter party provisions that expose the owners for unexpected liabilities are avoided. The main point both for owners and charterers when it comes to charter party terms must be predictability. If everybody understands properly the legal implications and consequences of the agreed chartering terms – the market will function better as negotiations can focus on the prize of the transportation and uncertainties as to the effect of the transportation contract can be avoided. 

For those with the eyes still squarely focused on the Wordscale points it may be interesting to note that previous research suggests that even the selection of standard charter party forms can have an impact of up to 4.5-5 Worldscale points if applied on a typical spot voyage scenario.

We have seen a great number of charter party provisions being used in the market which may have serious implications if not properly understood. The idea is to put a very close watch on such clauses and report them in the Weekly NEWS.

We would also like to focus on freight and demurrage payment provisions to highlight questionable clauses or practices. Part of the purpose with this initiative is to make sure that every INTERTANKO owner has a full overview of his rights in relation to freight and demurrage payments and that we provide our members with options for the situation when deviations from the normal practices are detected.

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