CHARTER PARTIES

GENCON - Clause 1

Cargo

The correct description of the cargo is extremely important. The Ship Owner must obtain from the Charterer all possible details concerning the cargo in order to ascertain that they are suitable for his ship. Where appropriate the Ship Owner must be able to form an idea concerning the cargo handling cost (e.g. in case of "gross term").

The details concerning the cargo, which the Ship Owner must have during the negotiations (fixture), depends to a large degree on the type of goods. If the Ship Owner is accustomed to negotiate with a certain Charterer for the transport of goods which are very well known to both parties, then the information on the cargo will be limited to the strict minimum. For goods which are less well known by the Ship Owner, an elaborate description of both the physical and chemical specifications is necessary as well as the particular precautionary measures which must be observed with regard to the handling of the goods on board.

The Ship Owner can eventually refer to a number of specialized works such as: Dangerous goods by Aeby, Stowage by R.E. Thomas, international Maritime Dangerous Goods code (IMDG) published by IMO, etc.

Example

For the carriage of scrap, the following description of the goods can often be found:

"Nr. 1 + 2 Steel Scrap, stowing 55 cubic feet per ton, No Turnings, No Motor Blocks, Non-oily scrap".

The Owner has the right to receive compensation if the goods don’t correspond to their description. In some extreme cases, he even has the right to cancel the charter party and to introduce a claim for loss of freight.
The Ship Owner must be especially attentive with vague expressions such as "general cargo" and especially in case of dangerous goods where he must require that the Charterer gives an elaborate description of the goods in a separate clause such as the "Dangerous to Cargo Clause" (Ihre, R., Gorton, L. en Sandevärn, A., Shipbroking and Chartering practice, London, Lloyd's of London Press, 1980, 131).
Since freight is generally calculated in function of the quantity of goods it is important for the Ship Owner to indicate in the charter party (box 12) the quantity of goods as precisely as possible and to state a minimum of quantity of goods to be loaded.
The quantity of goods is not only important for the Ship Owner but also for the Charterer, especially if the Ship Owner cannot load the full quantity indicated in which case the Charterer has the right to an indemnity.

The quantity of goods can be indicated in several ways:

a. X metric tons

This is the simplest way to indicate the quantity of goods, without any possibility of discussion afterwards. If the Charterer does not load the stated quantity then he must he simply pay for deadfreight.

b. About X metric tons

The term about allows for a certain margin which depends on the type and the quantity of the goods. In certain countries the margin can amount to 5% and in other countries (e.g. Belgium) it can go up to 10%.

Generally the margin is clearly mentioned in the charter party. It is however important to stipulate in whose advantage the margin applies:

-   5% more or less in Owners' option (moloo) of
-   5% more or less in Charterers' option (molco) of
-   5% more or less in master's option (molmo).

The formula "5% more or less in Owners' option" can sometimes entail some difficulties for the Charterer so that the latter sometimes inserts the "ETA clause" or the "radio clause" in the charter party i.e. the EXPECTED TIME OF ARRIVAL that must be sent a number of days in advance to the Charterer together with the quantity of goods to be loaded:

"Captain or Owners shall advise Charterers X days in advance of the date upon which the steamer will be ready to load under this charter, stating also the exact quantity guaranteed to load".

c. "Between X and Y metric tons"

d. "Between about X and about Y metric tons"

e. "Not less than X metric tons"

Another agreement, more to the advantage of the Charterer, is:

"... about 7.000 tons, not exceeding 7.700 tons, nor less than 6.300 tons ....".

Under a lump sum charter, a more detailed statement of the goods to be loaded is demanded, to avoid difficulties when the Charterer wants to load more than the safety of the ship allows. For this reason the following clause is inserted in a lump sum charter:

"Not exceeding what she can reasonably stow and carry over and above her coal, tackle, apparel, provisions and furniture".

Sometimes the terms “minimum” and/or “maximum” are used.

f. "A full and complete cargo"

This means that the Charterer is obliged to load a quantity of goods as large as possible, that the ship can carry, so that in case of heavy goods the maximum deadweight cargo capacity of the ship must be used and in case of light goods the maximum bale capacity must be used.

Here, the terms “about” can also be used or for instance "A full and complete cargo of ..... 10% more or less in master's option".

It is very important, during the negotiations to underline which type of tons are considered: metric tons, long tons or short tons. It is important which stowage factor is used which sometimes is given in long tons and sometimes in metric tons.

The stowage factor represents the number of cubic feet that one ton of a certain commodity occupies, exclusive of loss of stowage. The stowage factor depends therefore on the type of cargo. Average commodities have a stowage factor of 40 cft. Above 40 cft. goods are considered as light and below 40 cft. as heavy.

With regard to the supply of material necessary for the proper stowage of the cargo on board, clause 1 of the GENCON charter party (as revised 1976), is very clear:

"Charterers to provide all mats and/or wood for dunnage and any separations required, the Owners allowing the use of any dunnage wood on board if required".

A similar arrangement is made in the GENCON charter party revised in 1994 in clause 5, Loading/Discharging, Paragraph (a) Costs/Risks.

If the Charterer loads nothing then the Ship Owner can file a complaint to obtain compensation. The size of the compensation depends on the applied legislation. In some cases it amounts to the loss suffered. According to Article 120 of Book II, of the Belgian Commercial Code, it will amount to half the freight and according to clause 12 of the GENCON charter party (as revised 1976) it can never exceed the estimated amount of freight.

For deck cargoes the uses and customs of the place must be observed and if bills of lading are issued, the Hague-Visby Rules apply.

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