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A Captain’s View on Navigating Charter Parties

By Capt. Errol Gonsalves, The Marcura Group

‘A Rather Crypt’, ‘RecapHart Try’, ‘Act Harp Retry’

Those are some strange sentences! Perhaps they make some more sense when you learn that they are anagrams of ‘charter party’.

Nothing more cryptic to a beginner in shipping than looking through a 50-page document and trying to make sense of it.

 

That every charter party comes from a Recap and contains the heart of the contract is ironic. Every CP-related dispute harps on contractual clauses yet the ubiquitous ‘as per last’ persists and is repeatedly given a retry  – a potential trap that can make one cry. Thanks for the poetic license.

But seriously, an ancient document leading back to Byzantine Rhodesian laws; “Where a man hires a ship, the contract to be binding must be in writing and subscribed by the parties, otherwise it is void”.

We seem to have forgotten the essence of the origins of this document.

Over the years some parts of the industry have even done away with drafting a charter party by using the CP admin clause. Recently however, for compliance and housekeeping reasons there appears to be a groundswell towards preparing CPs.

Brokers signing charter parties has been accepted practice for eons, but with some pitfalls nevertheless. And in some regions, such as the United States, Brokers just don’t sign on behalf of their principals.

The great meltdown in 2008 caused much financial hardship in the shipping sector with many instances of multimillion dollar contractual default.

That set in motion a flurry of risk management practices, and as an immediate response to requests from DA-Desk customers, CP-Desk was born, circa 2011.

Now our customers; Ship Owners, Operators, Charterers and Brokers experience the pioneering services in the realm of maritime contract administration.

Charter parties are not nearly as fun as they sound. But they are our core business and our sole focus. That’s what our staff live every hour of every day.

There is no substitute to a manual process – strange as it may sound in a world overrun with technology. No Rocket science or fancy OCR software. OCR technology just doesn’t work on an image document that’s been faxed a few times.

Three sets of documents:

–       The recap;

–       The proforma;

–       The Working CP;

–       A pencil, a ruler and a highlighter

Those are the tools of the trade.

That is, until a revolution occurs in the way charter parties capture the agreed terms. Coming soon!

Watch this space for updates. 

 

 

 

 

 

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