Tanker Chartering

Tanker Chartering

A Group Two Subject/Course : NB: No exemption is permitted from this subject.


  1. To ensure a thorough knowledge and understanding of Tanker Chartering.
  2. To develop relevant communication skills.

Ships And Cargoes

  • The basics of oil refining and its products.
  • Crude Oil – characteristics.
  • Crude Carriers, VLCC, ULCC, OBO, O/O, Suezmax, Aframax
  • Petroleum Products – product carriers, dirty and clean – characteristics of cargoes
  • Vessel systems: Pumps, Pipelines, Manifolds, Cargo Heating (coils/heat exchangers),
  • Crude Oil Washing (COW), Inert Gas Systems (IGS), Segregated Ballast Tanks (SBT), Double Hulls.
  • Chemicals – Tank coatings, IMO Certification. Commodities and handling systems.
  • Compatibility of grades and coatings.
  • Parcel cargoes and carriers.
  • Gas – Liquid natural gas (LNG), liquid petroleum gas (LPG); awareness of cargo tank types; pressure, semi-refrigerated, refrigerated; typical size ranges.
  • Vegetable oils and juice, wine.
  • Basic constructional details and approximate tonnes and dimensions of vessels employed in the tanker trades.
  • Classification; the importance of oil company vetting inspections and oil company acceptability.

The Trades

  • Main routes for crude oil, products, chemicals, gas. Essential geography of the tanker trades understanding of location of production areas, refineries, pipelines, oil terminals. Typical locations of offshore loading and discharging facilities.
  • Environmental protection, pollution liability.

Freight Markets

  • Market Practitioners; Shipowners, Oil Companies, State Companies and Trading Companies. The role of the broker.
  • Factors affecting the market; political issues, sanctions, the role of OPEC, natural and political crises.
  • Methods of communication and market reporting.
  • International organisations relevant to the tanker trades especially International Maritime
  • Organisation (IMO), Worldscale, Oil Companies International Maritime Forum (OCIMF),
  • Intertanko, International Tanker Operators Pollution Fund (ITOPF).
  • The impact of e-commerce on market practice.

The Contracts

  • Standard voyage and time charter parties and standard additional clauses.
  • Consecutive voyage charters and Contract of Affreightment, Bareboat Charters.
  • Rights, responsibilities and liabilities of owners and charterers.
  • Drafting additional clauses and addenda.

Bill Of Lading

The functions of the Bill of Lading, risk of fraud and non production of original at discharge port or change of discharge port and practical solutions including Letters of indemnity.

Chartering Market Practice

  • Procedure of negotiations; offer and counter offer, essential details to be included in offers, subjects and fully fixed. Legal, tactical and ethical requirements.
  • The role of the post fixture department.
  • Breach of Warranty of Authority (with and without negligence).
  • Professional negligence and indemnity insurance. Defaulting Principals

The Financial Elements Of Charter Parties

    • Freight and Hire calculation and payment methods.
    • Voyage charters – deadfreight, demurrage.
    • Time charters – late hire payment, payment for bunkers and associated clauses;
    • Performance claims, off-hire events; delivery, final voyage and re-delivery.
    • Commissions and brokerage
    • The use of freight market derivatives.


  • Importance of clarity of valid notice of readiness clauses. Tendering valid NOR.
  • Commencement, interruption and pumping warranty; Statement of Facts, Laytime Statement, calculation of Laytime and Demurrage.


  • The structure and use of Worldscale.
  • Voyage Estimating – making the calculation using Worldscale, $/tonne and lump-sum rates.
  • Comparing alternative voyages, comparing voyage with time charter.
  • For Time Charter calculation of Ballast Bonus; comparison of $/day with DWT/month.


Resolution of Disputes; commercial courts, arbitration and Alternative Dispute Resolution (ADR), how arbitration works, resort to the courts. Role of the Shipowners and intermediaries P&I associations.

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