Homepage
PR Newswire
19-01-2015, 11:17 PM
Quote:I assume that in the event of a sinking, the ship operator (SSC in this case) will claim from insurance. Can the charterer impose any penalty on SSC if it cannot find another vessel to fulfill the charter?
AFAIK, It depends. When under a timecharter, the ship owner maintains ownership of the vessel and its crew. The charterer takes control of the voyages that the vessel sails.
If the sinking is due the the crew being drunk on the watch, then ship owner bears the costs. Charterparties (the contract) usually will stipulate that the ship owner has to supply another equivalent vessel in the event that the original vessel is unavailable.
If the sinking is because the charterer orders the crew to sail through treacherous weather or dangerous waters, against best practices, then the charterer will bear the costs.
Quote:That would mean that SSC will not benefit from the current drop in oil prices. As in, we cannot expect any decrease in the "Vessel operation and crew management costs".
SSC's revenue from the timecharter is fixed. Its main operational costs are maintenance and crew. They will not benefit from the drop in fuel price. The charterer will benefit from the drop in fuel price since they are the ones who pay in the timecharter. Unlike retail automobile fuel, bunker prices adjust very quickly in accordance with crude oil prices. But:
voyage revenue - voyage costs (including cost of charter and fuel) = net voyage result
If voyage revenue drops in line with the drop in cost of fuel such that voyage result is the same, the only benefit charterers will get from falling fuel prices is a reduction in working capital requirements. Last year saw the collapse in many commodities' prices and the baltic dry index has collapsed back to close to multi-year lows. So can charterers really benefit from falling prices?
Which ones can and which ones cannot?
