CHARTERING
Dinesh N. Kutty
Peculiarities in tanker trade.
Tanker trades are generally unidirectional.
Tankers : DPP, CPP & Chemical Gas Carriers : LPG
and LNG.
Quality of tonnage is critical : Oil Major Approvals.
STS operations are rampant.
Chartering negotiations are brisk and fast.
Freights are calculated on Worldscale.
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CONCEPT OF WORLDSCALE
WORLDSCALE - INTRODUCTION
THE FULL FORM IS NEW WORLDWIDE TANKER NOMINAL FREIGHT
SCALE
SCHEDULE OF FREIGHT RATES.
WORLDSCALE IS AVAILABLE ONLY ON A SUBSCRIPTION BASIS,
PUBLISHED ANNUALLY ON 1ST JANUARY EACH YEAR.
WORLDSCALE RATES ARE CONSOLIDATED & FINALIZED BY TWO
NON-PROFIT MAKING ORGANISATIONS KNOWN AS WORLDSCALE
ASSOCIATION (LONDON) LIMITED AND WORLDSCALE ASSOCIATION
(NYC) INC.
ABBREVIATED AS WS IN WRITTEN COMMUNICATION , FOR EG:- WS
50, WS 100.
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HOW IS THE RATE EXPRESSED?
THE RATE IS EXPRESSED IN $ / METRIC TONNE USING A STANDARD
VESSEL
RATE GIVEN IN THE WORLDSCALE BOOK IS REFERRED AS FLAT
RATE OR WS 100
WS 300 WOULD MEAN 300% OF PUBLISHED RATES AND WS 50
WOULD MEAN 50% OF PUBLISHED RATES.
FOR EXAMPLE:
VOYAGE : RASTANURA TO MUMBAI
WS 100 (PUBLISHED RATE): USD 7.13 PMT
IF THE FIXUTURE IS CONCLUDED AT WS 120, THEN APPLICABLE
FREIGHT RATE WOULD BE : 7.13 X 120% I.E. USD. 8.556 PMT
IF THE FIXUTURE IS CONCLUDED AT WS 70, THEN APPLICABLE
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FREIGHT RATE WOULD BE : 7.13 X 70% I.E. USD. 4.991 PMT
BASIS OF CALCULATION.
1.
STANDARD VESSEL:
75,000 MT
2.
AVERAGE SERVI CE SPEED:
14.5 KNOTS
3.
BUNKER CONSUMPTION :
STEAMING
55 TONNES PER DAY
PURPOSES OTHER THAN STEAMING 100 TONNES PER ROUND VOYAGE.
IN PORT
5 TONNES FOR EACH PORT
GRADE OF FUEL
380 CST
4.
PORT TIME
4 DAYS (1 LOADING & 1 DISCHARGE)
(12 HOURS ADDITIONAL FOR EVERY
PORT)
5.
FIXED HIRE ELEMENT:
USD. 12,000 PER DAY
6
BASIS OF CALCULATION.
6.
BUNKER PRICE:
USD. 328.75 PER TONNE
7.
PORT COSTS:
DEPENDING ON PORTS
8.
CANAL TRANSIT TIME:
24 HRS FOR PANAMA CANAL
30 HRS FOR SUEZ CANAL
ADVANTAGES OF THE SCHEDULE
SIMPLIFICATION OF NEGOTIATIONS.
WORLDSCALE PUBLISHES TRANSHIPMENT AREAS.
WSHTC (Worldscale Hours, Terms & Conditions) TO APPLY.
SAVINGS OF TIME AS WORLDSCALE COVERS FREIGHT DYNAMICS
FOR WIDER LOADPORT RANGE AND WIDER DISPORT RANGE.
UNDERSTANDING MARKET FIGURES BETTER.
EXAMPLES OF CALCULATIONS
ILLUSTRATION 1 : CALCULATE TOTAL FREIGHT?
LOADPORT:
DISPORT:
QUANTITY:
FREIGHT:
RASTANURA
MUMBAI
80,000 MT
WS 65
WS 100 (FLAT RATE) :
USD. 7.13 PMT
ANSWER:
QUANTITY X FREIGHT RATE PMT
FREIGHT FIXED = WS 65
RATE AT WS 65 = $7.13 X 65 / 100 = $4.6345 PMT
SO, WS 65 = $ 4.6345 PMT
TOTAL FREIGHT : 80,000 MT X $4.6345 = USD. 370,760
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EXAMPLES OF CALCULATIONS
ILLUSTRATION 2 : CALCULATE TOTAL FREIGHT?
LOADPORT:
DISPORT:
QUANTITY:
FREIGHT:
MINA AL AHMADI
SINGAPORE
90,000 MT
WS 90
WS 100 (FLAT RATE) :
USD. 11.16 PMT
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EXAMPLES OF CALCULATIONS
ANSWER:
FREIGHT FIXED :
WS 90
FLAT RATE (WS 100):
USD. 11.16 PMT
RATE AT WS 90:
$11.16 X 90/100
RATE AT WS 90:
$10.044 PMT
TOTAL FREIGHT : 90,000 MT X $10.044 = USD. 903,960
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CONCEPT OF DIFFERENTIALS.
FIXED RATE DIFFERENTIALS
Differentials to be included as part of the freight payment as a fixed amount
in respect of costs incurred by owners. Such differentials are not subject to
any percentage variation which the contracting parties have agreed to apply
to Worldscale rates.
For example :
Panama Canal transit USD. 3.57 per ton of net tonnage for Ballast transit
Jebel Ali USD. 0.68 per tone of cargo loaded or discharged at Jebel Ali
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CONCEPT OF DIFFERENTIALS.
VARIABLE RATE DIFFERENTIALS
Differentials to be added to or deducted from, the applicable rate of freight.
Such variable rate differentials are subject to the percentage variation which
the contracting parties have agreed to apply to worldscale rates.
For example :
Barbers Point (USA) When cargo is loaded or discharged at the Tesoro
SPM an addition of USD. 0.19 must be made to the Barbers Point rate
applicable to the voyage in question.
When the cargo is discharged at the Durban SBM crude oil terminal, a
deduction of USD. 0.28 must be made to the Durban rate applicable to the
voyage in question.
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EXAMPLE OF FIXED RATE DIFFERENTIAL
ILLUSTRATION #3 :
LOADPORT:
YANBU
DISPORT:
SINGAPORE
QUANTITY:
80,000 MT
FREIGHT:
WS 90
WS 100 (FLAT RATE) :
USD. 16.85 PMT
WS STATES USD. 0.27 PER TONNE TO BE ADDED AS FIXED RATE
DIFFERENTIAL ON CARGO LOADED OR DISCHARGED AT YANBU
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EXAMPLE OF FIXED RATE DIFFERENTIAL
ANSWER TO ILLUSTRATION #3 :
FREIGHT FIXED :
WS 90
FLAT RATE (WS 100):
USD. 16.85 PMT ( VOY. FROM YANBU TO SINGAPORE)
RATE AT WS 90:
$16.85 X 90 / 100
= $ 15.165 PMT
TOTAL FREIGHT :
80,000 MT X $ 15.165 PMT
PLUS : $ 0.27 X 80,000 MT
=
=
$ 1213200-00
$ 21600-00
$ 1234800-00
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EXAMPLE OF VARIABLE RATE DIFFERENTIAL
ILLUSTRATION #4 :
LOADPORT:
RAS GHARIB
DISPORT:
JAMNAGAR (SPM)
QUANTITY:
80,000 MT
FREIGHT:
WS 110
WS 100 (FLAT RATE) :
USD. 11.36 PMT
WS STATES when cargo is loaded or discharged at the Jamnagar SPM
Terminal, a variable rate differential of $ 0.49 to added to WS published rate.
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EXAMPLE OF VARIABLE DIFFERENTIAL RATE
ANSWER TO ILLUSTRATION # 4 :
FREIGHT FIXED :
WS 110
FLAT RATE (WS 100):
(+) V.R.D:
USD. 11.36 PMT ( VOY. FROM RAS GHARIB TO JAMNAGAR )
USD. 0.49
USD. 11.85
RATE AT WS 110:
$11.85 X 110 / 100
= $ 13.035 PMT
TOTAL FREIGHT :
80,000 MT X $ 13.035 PMT
= $ 104,2800-00
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EXAMPLES OF FREIGHT CALCULATIONS
ILLUSTRATION # 5:
VESSEL: M.T. CINTA TRADER (DWT: 118263 MT)
LOADPORT:
JEBELDHANA
DISPORT:
MOMBASSA
MIN. QUANTITY:
100,000 MT
FREIGHT:
WS 70 O/A 50%
B/L QUANTITY:
105,100 MT
WS 100 (FLAT RATE) :
USD. 10.94 PMT
PLEASE CALCULATE FREIGHT FOR THE TOTAL LOADED QUANTITY?
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EXAMPLES OF CALCULATIONS
ANSWER TO ILLUSTRATION # 5 :
FREIGHT FIXED :
WS 70
FLAT RATE (WS 100):
USD. 10.94 PMT
RATE AT WS 70:
$10.94 X 70 / 100
=
(FOR VOY FROM JEBELDHANA TO MOMBASSA)
$ 7.658 PMT
TOTAL FREIGHT :
A) 100,000 MT X $ 7.658
B)
5,100 MT X $ 7.658 X 50%
=
=
$ 765800-00
$ 19527-90
TOTAL FREIGHT
$ 785327-90
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EXAMPLES OF FREIGHT CALCULATIONS
ILLUSTRATION # 6:
VESSEL:
LOADPORT:
DISPORT:
MIN. QUANTITY:
FREIGHT:
B/L QUANTITY:
FLAT RATE :
M.T. SEA QUEEN (DWT: 2,91,850 MT)
KHARG ISLAND (IRAN)
ULSAN (SBM NO.1)
200,000 MT
WS 50 O/A 50% UPTO 2,40,000 MT
O/A 25% FOR QUANTITY ABOVE 2,40,000 MT
261,400 MT
USD. 23.66 PMT
FOR LOADING AT ANY PORT IN IRAN, FIXED RATE DIFFERENTIAL OF USD. 0.22
PMT ON LOADED QUANTITY TO BE ADDED.
FOR CARGO OPERATION AT ULSAN SBM NO.1 A VARIABLE RATE DIFFERENTIAL
OF USD. 0.22 TO BE DEDUCTED FROM WS PUBLISHED RATE.
PLEASE CALCULATE FREIGHT FOR THE TOTAL LOADED QUANTITY?
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EXAMPLES OF CALCULATIONS
ANSWER TO ILLUSTRATION # 6 :
FREIGHT FIXED :
WS 50
FLAT RATE (WS 100):
Less : V.R.D
USD. 23.66 PMT
0.22 PMT
USD. 23.44 PMT
RATE AT WS 50:
$ 23.44 X 50 / 100
= $ 11.72
$ 11.72 PMT
RATE AT WS 70:
(FOR VOY FROM KHARG TO ULSAN)
TOTAL FREIGHT :
A)
200,000 MT X $ 11.72
B)
40,000 MT X $ 11.72 X 50%
C)
21,400 MT X $ 11.72 X 25%
=
=
=
$ 2344000-00
$ 234400-00
$ 62702-00
DIFFERENTIAL (FRD of $ 0.22 on Quantuty loaded)
D) 261,400 MT X $ 0.22
TOTAL FREIGHT
$ 2698610-00
57508-00
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