What Makes a Charter? Part Two of a Two-Part Series

by Philip Rankin

Part One of this series examined the need for shipowners and their bankers to look wider than just the ship in putting themselves out on the chartering market. Part Two examines what influences freight rates and who gets Commissions out of the freight bill.

It is worth remembering that the documented charterer on a Charterparty very regularly is not the owner, shipper or consignee of the cargo being carried. Many trading companies, for numerous security and tax reasons, use wholly-owned subsidiary companies based in, say, Panama or Liberia for chartering purposes. The companies will be backed by a parent company guarantee, but may have the important consequence that the cargo cannot be arrested or detained on account of the default of the charterer.

This is only an excerpt of What Makes a Charter? Part Two of a Two-Part Series

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