CHARTERING

Types of Contract of Affreightment

Introduction

For the transportation of goods, a ship owner can operate his ship in different ways.

He can operate his ship himself for the transport of its own goods. This occurs mainly with large and powerfulcompanies such as oil companies, chemical companies and steel industries, which usually import their own raw materials.
He can let out his ship i.e. lend it to a third party.

Only in case of hire will it be necessary to conclude a contract of affreightment between the parties concerned .

In some countries, their Merchant Shipping Act refers to the charter party.

In Belgium for instance, article 115 of Book II of the Commercial Code stipulates the different ways of chartering: “ ….for the whole vessel or for a part of the vessel , for a complete voyage or for a limited duration, by weight, number or measure, against a fixed price or by quantity of cargo”.

The first and second subparagraph of the same article also gives the meaning of the term freight: “The rent of a ship or other seagoing vessel is called freight”.

If we refer to the enumeration of abovementioned article 115, we can distinguish the following main types of contracts of affreightment:

the voyage charter;
the time charter;
the demise charter or bareboat charter;
the lump sum charter or chartering against a fixed price;
the contract or affreightment;
the booking-note;
the forward voyage charter;

The chartering by weight, number or measure has become obsolete and is therefore no longer encountered.

On the other hand, the modern economic and commercial practices and transport methods such as the creation of consortia, containerization, etc. have introduced new types of contracts of affreightment, such as:

"cross charters", where the owner can also be the charterer of a part of the ship.
"storage chartering", where ships are chartered for temporary storing of goods.

Some contracts of affreightment are bound locally such as the net form - chartering, which is used in the U.S. and where in addition to the freight, the charterer must also pay for the handling of the cargo.

There are also contracts of affreightment which are not related to the transport of goods such as the chartering of passenger ships, tugs, ship for scientific research, etc.

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