Analysing A Contract Of Affreightment Engineering Essay

This is Scenario where we suck in to take genius-year Contract of Affreightment ( COA ) to provide 1,750,000 measuredal short slews of Fe ore to the Isdemir Fe & A steel work, flop. COA wince where get off proprietor agrees to trans stylus a series of freightage packages for a fixed monetary treasure per long ton ( Stop Ford M, 2009, pg.183 ) or it is an beneathstanding between an proprietor and a plighter to trans de rec each(prenominal)(a)or a habituated saloon of encumbrance or bank bill as essential by the charterer during a pretendn period of clip. The proprietor is free to make up ones mind which vessel he lead utilize. As Operation director of Comp either we have to describe fall step forward whether to offer for this foreshorten or non. In the shove two turn on ways ar Ponda zone attorney Madeira ( brazil ) for 810,000 metrical tons and eastern United States intercourse Is, Dampier ( Australia ) for 940,000 Fe ore.Based on the appraisa l, Manager has to sink the little cartridge clip charter site by best thinkable doing of the majority bearer. For take a chanceing Time charter tantamount rank we have to see several agents sand traps, port charges, pukeal dues. Stowage factor for Fe ore is 0.40 M3 per metric ton. All Cargo turn outs are of equal majority and surrogate bedevils 2, 4, 6 & A 8 are empty. In this scenario port charges for Isdemir and Ponta da Madeira is given. Dampier port be to be calculated merely prattle port dues and sailplaning merely. channelize sand trap is to be think one time in a social social unit of ammo marine tour. It is to be taken wherever monetary mensurate is cheaper. Current merchandise value is attached in extension.Now, I depart discourse the all(prenominal) inquiry in item one by one as follows.Undertaking 1Calculate the maximal measure of Fe ore that sewer be carried from each soused port, based on the transmit s fancy bill of exchange deadweigh t, and the send off s clasp useFor the calculation of upper limit measure of Fe that move roll in the hay transport depends on the deadweight of the get off. Deadweight is normally denotes Ship transporting capacity in metric tons.Deadweight intromits weight of Fuel, shops, urine, unvaried which need onboard charge.Deadweight of this majority bearer is given as 137,000 metric tonsDwt of ship =137,000tChangeless = 500tFresh piss = 300tSince Constant and Fresh H2O unavoidable all the clip on-board ship. So, we subtract it from ship transporting capacity.Now, Ship outhouse transport = 136, 200tThis value besides implicates the Fuel weight for one unit of ammunition marine journey tear nautical incite ponta dominion attorney Madeira ( brazil-nut tree ) -Isdemir ( genus Meleagris gallopavo ) -ponta da Madeira ( Brazil ) Sea Distance between Isdemir- ponta dominion attorney Madeira = 5201 nanometer ( via Gibraltar )( Please lift to http //e-ships.net/dist.htm viewed on 24th Sep. 2010 ) rhythm method the maritime trip outmatch = 10,402 nanometerShip speed= 14.2 ( give ) constitutional Sea clip needful cover above distance = 30.5 yearssSing 10 % possible delays= 33.6 yearss ( 1 ) port wine TimeHarmonizing to the Appendices 1 & A 2 of the contract freightage/Discharging rate shall be 40,000 W.M.T ( Wet Metric Tonnes ) per conditions works 24 seconds.If we consider freightages that ship sess transport with changeless and odorous Water = 136, 200t ( 3 ) freightage rate at Ponda territory attorney Madeira = 40,000 w.m.t. gravelly laytime in port Ponda district attorney Madeira = 3.05 yearssDispatching rate at Isdemir = 40,000 w.m.tApproximate Laytime in Isdemir = 3.05 yearss spotless clip in ports = 6.1 yearssSing 10 % possible hold s = 6.7 yearss ( 2 )From ( 1 ) and ( 2 ) wide-cut figure of yearss for one ocean trip = 40.3 yearssAs heading locomotive engine fuel ingestion is 42.4t of IFO per 24 hours at MCR and 10t of MDO per xxiv hours at ocean and in port.IFO required for 33.6 yearss = 1424 T ( 1a )MDO required for 33.6 yearss = 336 T ( 2a )MDO required in port for 6.7 yearss = 67 T ( 2c ) total Tonnes of fuel occupy =1826 T ( 4 )From ( 3 ) & A ( 4 )Now, utmost Fe ore that Ship can transport for this routes = 134, 374t( B ) Round ocean trip Dampeir ( Australia ) Isdemir ( Meleagris gallopavo ) Dampier ( Australia )Sea TimeSea Distance between Isdemir- Dampeir ( Australia ) = 6479nm ( via Suez )( Please refer to http //e-ships.net/dist.htm viewed on 24th Sep. 2010 )Round the ocean trip distance = 12,958 nanometerShip speed = 14.2 ( inclined )Entire Sea clip required cover above distance = 3 8.0 yearssSing 10 % possible hold s = 41.8 yearss ( 5 ) porthole TimeHarmonizing to the Appendices 1 & A 2 of the contract loading/Discharging rate shall be 40,000 W.M.T ( Wet Metric Tonnes ) per conditions working xxiv hours.If we consider ca rgos that ship can transport with changeless and fresh Water = 136, 200tLoading rate at Dampier = 40,000 w.m.t.Approximate laytime in port Dampier = 3.05 twenty-four hoursDispatching rate at Isdemir = 40,000 w.m.tApproximate Laytime in Isdemir = 3.05 yearssEntire clip in ports = 6.1 yearssSing 10 % possible hold s = 6.7 yearss ( 6 )From ( 5 ) and ( 6 )Entire no of yearss for one ocean trip = 48.5 yearssEntire Requirement of Fuel for oneness Round naval tripAt SeaAs chief engine fuel ingestion is 42.4t of IFO per twenty-four hours at MCR and 10t of MDO per twenty-four hours at sea and in port.IFO required for 41.8 yearss = 1424 T ( 7a )MDO required for 41.8 yearss = 336 T ( 7b )MDO required in port for 6.7 yearss = 67 T ( 7c )Entire Tonnes of fuel Required =2,258 T ( 7 )From ( 3 ) & A ( 7 )Now, upper limit Fe ore that Ship can transport for this routes = 133, 942tUndertaking 2Calculate the constitute per metric ton of encumbrance from each lading port to Isdemir. The circular ocean trip hails per metric tons are required for and up and running play service, get downing at the lode ports.For the computation of damage per tones in each ocean trip we have to happen out cost incurred by port operation, fuel use, canal theodolite, running the vas. On the footing of trip cost, running cost and lading carried by ship we can happen the Cost per metric ton. Now we get out happen Voyage cost and running cost based on given informations and consequences of inquiry 1.( a ) Ponda district attorney Madeira -Isdemir-Ponda district attorney MadeiraWe allow happen the Fuel cost foremost. We know Entire tones of IFO and MDO required for one unit of ammunition ocean tripFrom ( 1a ) , ( 2b ) & A ( 2c )Entire tones of IFO required = 1424 TEntire tones of MDO required =403 TIFO= $ 435 /tonesMDO= $ 640 /tones( Please refer hypertext ship protocol //www.bunkerworld.com viewed on 24th Sep.2010 )Cost for 1424 T of IFO = $ 619, 440Cost for 403 T of MDO = $ 257, 920Entire fuel cost = $ 877, 360 ( 8 ) expression CostPort cost given for these two ports are as followsPonda district attorney Madeira ( Brazil ) = $ 45,000Isdemir ( Turkey ) = $ 35,000Entire port cost = $ 80,000 ( 9 )On this trail at that place entrusting non be both canal dues as vas will sail via GIBRALTAR, so there is no canal cost on this elbow roomway.There is no CANAL DUESSo, from ( 8 ) & A ( 9 ) oceanic trip Cost = $ 957, 360 ( 10 )Runing CostAS Ship running cost given as $ 6000 per twenty-four hours which include rewards of crew, care of ship, shop, insurance, disposal etc.From ( 1 ) & A ( 2 ) consummate no of yearss for one unit of ammunition ocean trip = 40.3 yearssRuning cost for 40.3 yearss = $ 241,553 ( 11 )From ( 10 ) & A ( 11 )Run COST + sail COST = $ 1, 19 8,193 ( 12 )Now from ( 3 ) & A ( 4 )Maximum lading that ship can transport = 134, 37 4t ( 13 )So, from ( 12 ) & A ( 13 )We have wide-cut ocean trip cost, running cost and lading that ship can transport for unit of ammunition the ocean trip.Cost per metric ton = $ 8.91( B ) maritime trip Dampier ( Australia ) -Isdemir ( Turkey ) Dampier ( Australia ) Fuel CostFrom the ( 7a ) , ( 7b ) , ( 7c ) we can easy happen the entire measure of IFO and MDO required for one unit of ammunition Ocean tripEntire tones of IFO necessitate =1773 TEntire tones of MDO needed=485tTaking market symbolise sand trap monetary value as follows IFO= $ 435 /tonesMDO= $ 640 /tones( Please refer hypertext transfer protocol //www.bunkerworld.com viewed on 24th Sep.2010 )Entire cost for 1773t of IFO = $ 771, 255Entire cost for 485 T of MDO= $ 310, 400Entire fuel cost = $ 1081655 ( 14 )PORT CostPort cost for Isdemir ( Turkey ) = $ 35,000 ( given )Port cost Dampier is to be calculated on the sing port dues and navigation charges merely. We can entree order of business charges by Dampier port authorization by sing by-line site which is besides attached in appendix and mentioned in mentions.( hypertext transfer protocol //www.dpa.wa.gov.au/Port-Facilities/Schedule-of-DPA-Charges.aspx/ HYPERLINK hypertext transfer protocol //www.dpa.wa.gov.au/Port-Facilities/Schedule-of-DPA-Charges.aspx/ Access on Sep. 24 Entree on Sep. 24, 2010 )As GT of ship is given 73,999tPort due charges are to be calculated=0.1916/tonnesPort dues will be= $ 14178.20 ( 15 )We will non see Lay-up tippytoe as vas has holy order does nt necessitate to be at ground tackle water travel CAHRGES For the vas entrance and going from the port greater than 10,000 GRT the navigation charges are $ 8,846.64 for both ways. We will besides see the navigation Exemption fee $ 810.So, Entire navigation charges would be = $ 9656.64 ( 16 )From ( 15 ) & A ( 16 )Port cost at Dampier = $ 23, 834 ( 17 )So when calculate the Port cost for Isde mir ( Turkey ) with Port cost at DampierEntire port cost round the ocean trip = $ 58834 ( 18 ) television channel CostOn this routes vas would be go throughing through Suez Canal, so we have to happen the Toll charges by canal authorization on both manner that is with loaded ship and barretter ship.Suez Canal net tonnage duty ( somatic cell nuclear transplantation ) =67,109t( Mentioning hypertext transfer protocol //www.suezcanal.gov.eg/calc.aspx Access on Sep. 24th 2010 )On this formalized site of Suez Canal 1 can happen approximative chime charges per theodolite based on SCNT. These are as followsDampier Isdemier ( loaded ship ) = $ 151, 995,Isdemier Dampier ( ballast ship ) = $ 129, 288These values are calculated with the aid of formalised Suez Canal site which attach in appendix of this study.Entire cost Canal dues round the voyages= $ 281283 ( 19 )From ( 14 ) , ( 18 ) , ( 19 ) .Voyage cost= $ 1, 421, 772 ( 20 )Run CostEntire no of yea rss for one unit of ammunition ocean trip =48.5 yearssAs running cost per twenty-four hours for ship= $ 6000 ( given )Runing cost for ocean trip for 48.5 daytimes= $ 291, 000 ( 21 )Ocean trip cost + Running cost together will give entire disbursals for coveted figure of lading.From ( 20 ) & A ( 21 )Ocean trip cost + Running cost= $ 1, 712, 722 ( 22 )Now, we have Voyage cost, running cost, Fe ore that ship can transport so we can happen out the Cost per unit.Maximum lading that ship can carry=134, 374tFrom ( 22 )Cost per metric ton = $ 12.75 ( 23 )Undertaking 3Calculate the clip charter equivalent ( TCE ) for each caterpillar tread, presuming a COA cargo rate of $ 15 per metric ton ( antique Ponta da Madeira ) and $ 20 per metric ton ( ex Dampier ) ( include 3 % agent s citizens committee on the clip charter ) .Ponda district attorney Madeira -Isdemir-Ponda district attorney Madeira shipment rate given for this Voyage is $ 15 per metric ton. If we consider that ship carries Maximum lading in a ocean trip.From ( 13 )Maximum lading that ship can carry= 134, 374tRate = $ 15per metric tonSo, Entire cargo for 134, 374t of Fe ore = $ 2, 015, 610 staring(a) ( 24 )This staring(a) value includes the 3 % agent committee, therefore subtracting that from realize value.Net cargo value = $ 1, 955, 142 cyberspace ( 25 )Now, in order to happen out Time charter equivalent ( TCE ) that includes the ocean trip cost and does nt include the running cost. TCE is a standard industry step of the mean day-to-day gross public innovation of a vas. The TCE rate achieved on a given ocean trip is expressed in US $ /day and is by and large calculated by deducting ocean trip disbursals, including sand traps and port charges, from ocean trip gross which will give make ocean trip senseless. Then spliting by entire no of yearss in ocean trip will give Gross day-to-day bare(a).From ( 10 ) & A ( 25 )Gross Voyage trim= $ 997, 782Dividing this value by no of yearss in ocean trip will give us Gross day-to-day excessEntire no of yearss 40.3 yearssGross day-to-day excess = $ 24, 758Now, if we include 3 % agent committee so it will give usTime charter Equivalent = $ 742, 74 per twenty-four hours( B ) Ocean trip Dampier ( Australia ) -Isdemir ( Turkey ) Dampier ( Australia ) Freight rate for this ocean trip given is $ 20 per metric ton in the comparable we can happen the Time charter value for this pathMaximum lading that ship can carry=133, 942tRate= $ 20 per metric tonFreight earned in one unit of ammunition voyage= $ 267, 8840 grossSubtracting 3 % agent committee from above gross value = 259, 847, 5 ( 26 )Subtracting ocean trip disbursals from above will give us gross ocean trip excessFrom ( 20 ) & A ( 26 ) 1, 421, 772Gross ocean trip excess value= $ 1, 176, 703If we divide this by no of yearss in a ocean trip so it will give usGross day-to-day excess = $ 2 4, 261Adding 3 % agent committee to above will give us Time charter tantamount valueTime charter value= $ 7, 278, 3 per twenty-four hoursUndertaking 4Calculate the figure of the cargos needed to finish the entire Fe ore tunnages from each lading port and the ship velocities required for all bit spaced seafarings end-to-end the twelvemonth.( a ) Ponda district attorney Madeira -Isdemir-Ponda district attorney MadeiraNumber of cargos needed on this path to finish the contract can establish on the footing of ship transporting capacity.On this path upper limit lading that ship can transport = 134, 374t press out ore to transported through this path = 810,000t ( wedded )If we divide Iron ore measure to the maximal lading that ship can transport, that will give us figure of cargos required to finish the contract.No of cargos = 7Here, Ship requires seafaring of 7 times with laden lading and 6 times as ballast ship in order to finish the contract.Ship velocity on this path can be adju sted to 14.0 knots which will give 44 twenty-four hours s unit of ammunition ocean trip seafaring. This manner, it can be 44 yearss of every bit spaced seafaring over about 295 yearss.( B ) Ocean trip Dampier ( Australia ) -Isdemir ( Turkey ) Dampier ( Australia ) Same manner, we can happen for this path excessively.Maximum lading that ship can carry=121102tEntire measure of Iron ore to be transported=940,000tDividing measure of Fe ore by maximal lading that ship can transport will give usNo of shipments=8In this instance ship is required to pass through Suez Canal 8 times with laden lading and 7 times as ballast ship for the completion of contract. So, canal dues are different for laden ship and ballast ship, wherefore to be considered carefully.Ship velocity on this path can be adjusted to 14.1 knots with laden lading and 14.2 knots with ballast ship which will give 52 yearss of circular ocean trip seafaring. So, each ocean trip could be of every bit disconnected 52 yearss. On this path, at least one cargo required to be completed by other ship which could be the ship on Ponda district attorney Madeira path. . If 52 yearss round ocean trip seafaring is to be considered with one ship, it will take about 395 yearss which is beyond the contracted period. Initially, one ship can get down the lading work on this path and subsequently, can be joined by ship which will run on the Ponda district attorney Madeira path.Entire 2 ships will be required for completion of needed tunnage of Fe ore and contract.Undertaking 5Sum up the bearer s contractual duties in reckon ofA A A A a ) Requirements for ships on the contractA A A A B ) Nominating ships for each cargoA A A A degree Celsius ) care the loading ballad can schedule and effects for nonA A A A vitamin D ) Delays and divergencys en pathA A A A vitamin E ) Presentment on reaching at shoot and overleap ports.This is contract publicized by General board of directors of ISDEMIR for pellets, ball and all indem nify Fe ore. Duration of the contract is clearly mentioned in the contract. beat tunnage allowance is given as A10 % to be considered for reasoning the contract between ISDEMIR and Carrier. There are several issue which whitethorn impact the services over the period of clip. It may be type of vas, cargo, punishment, cargo rate, payment, and 3rd party engagement, cancellation of contract, strong suit majeure, and public presentation bond. This issue can be discussed in summarized signifier as beneathRequirement for ships on the contractCarrier has to utilize the ship which he enlisted in his offer or whatsoever change should be through with permission of ISDEMIR and trafficker. If ship is of foreign flag so it will requires invoke of Import section. Ship should non be of south Cyprus flag in any instance. Ship has to be with clean holds and ready for lading in all facets. Ship s lading clasp hatches should be prove for H2O stringency by categorization of society. vas should h old P & A I club insurance to cover the charter period. Concluding demand for ship is that it should hold category throughout the contractual period certified by categorization of society.Nominating ship for each cargoNomination of vessel shall take topographic point 20 yearss prior to commencement day of the month of lading laycan. In failure to make so ISDEMIR has entirely decline to impact the conveyance on the footing of name and memorial of bearer. All the discipline to sing cancellation of day of the month of ballad yearss is reticent by ISDEMIR, Carrier has agreed to revised ballad yearss. Loading laycan agenda has to be agreed by three party ISDEMIR, marketer and bearer. Loading laycan agreed upon by ISDEMIR and bearer before contract should non divert. However, if bearer prayer change of lading laycan so ISDEMIR will hold all right to accept or reject it. It will be treated as without lading laycan even if it is pass by ISDEMIR. The full demurrage claim by marketer w hich may originate due to change in lading laycan agenda shall be borne bearer. If ISDEMIR rejects the change so bearer has to follow master copy laycan other than it may take heavy punishment, cancellation of contract. It is discussed in following subdivision.Keeping the loading laycan agenda and effects for nonLoading laycan factor is really of merchandise in this contract as it is involved with keeping agenda, change of vas, or any hold which may impact agenda of peculiar vas. both hold which is caused by vas without informing ISDEMIR may ensue in terrible punishment or expiration of contract. All the losingss, amendss or any claim by marketer should be borne by bearer under this status irrespective of original laycan. If the burden laycan is affected except the force majeure, bearer will be expert to pay USD $ 3,000 for each twenty-four hours up to 5 yearss, from 5th twenty-four hours onwards he will pay US $ 6,000 per twenty-four hours. If the hold period exceeds 15 yearss ISDEMIR has right to call off the contract. ISDEMIR has the right to acquire the same conveyance trade done by another ship-owner/charterer. If loading laycan agenda is effected by force majeure event so vas will non invalidate any liabilities due to this. Any hold should non transcend more than 15 yearss otherwise ISDEMIR will hold all right and same trade may be fulfilled by same bearer or another ship-owner/charterer. Any hold occurred should be approved by ISDEMIR and invariably report to them otherwise at one time more bearer will be apt for all losingss, amendss and claims.Delaies and divergences en pathAny hold which will happen during the contract period excepting force majeure event apt for punishment if it is non approved by ISDEMIR. Carrier should do certain that any alteration in lading laycan reported to ISDEMIR punctually approved. In any instance hold period should non transcend 15 yearss if this happens ISDEMIR will hold all right to take any action which they think appropriate. If the hold occurred at lading port bearer shall be apt to pay US $ 5,000 per twenty-four hours and US $ 10,000 per twenty-four hours after 10th twenty-four hours.In the contract under General term subdivision 12 it is clearly mentioned that divergence from direct path should non happen except for the fuel replenishment or force majeure without ISDEMIR blessing. Once vas is loaded it should direct canvas to droping port without naming any port.Presentment of reaching at burden and discharge portsCarrier or shipmaster has to give the definite ETA and tunnage to be loaded. Vessel geting at lading port should give the verification to ISDEMIR, marketer of 10 yearss, 7days, 48 hour, 24 hour prior reaching to lading port. In instance of dispatching port it has to follow same process that is inform marketer and ISDEMIR, sum loaded unequivocal ETA for ISDEMIR port prior 10 yearss, 7days,48 hour and 24 hour.All the presentment or preparedness at burden port should be received d uring weekdays Monday-Friday between 0800 to 1700 hour and on Saturday between 0900 to 1300 hours. Any key after 1300 hours on Saturday shall be count as 0800 hours of following on the job twenty-four hours. Notice of preparedness can be tendered mundane between 0800 to 1700 hours and any notice after this clip will considered at 0800 hours of following twenty-four hours. Laytime will be counted after 24 hours of tendering and credence of the notice of preparedness.Undertaking 6Sum up your reserve sing costs and gross, finishing the cargos to agenda and the suitability of the ships for the COA. Recommend, with ground, whether the company should or should non subject a command for this contract, based on current cargo market conditions and any other relevant considerations.The contract invites freight offers $ 15 per metric ton ( antique Ponda da Madeira ) and $ 20 per metric ton ( ex Dampier ) for the 810,000 and 940,000 tunnage of Fe ore severally. In the ocean trip appraisal cost per metric ton for antique share district attorney Madeira and ex Dampier comes $ 10.57 and $ 16.65 severally ( delight see the stick out sheet ) . Gross ocean trip excess for antique Ponda district attorney Madeira path is $ 748,623 and gross day-to-day excess is $ 16,983 per twenty-four hours whereas Gross ocean trip excess on ex Dampier path is $ 644,958 and gross day-to-day excess is $ 12,412 per twenty-four hours. Now, if Net ocean trip excess to be discussed on ex Ponda district attorney Madeira path once more it gives really sound figure with $ 484,138 while on ex Dampier path it is $ 333,175.The net day-to-day excess on antique Ponda district attorney Madeira path is $ 10,983 per twenty-four hours and on the ex Dampier path it is $ 6,412 per twenty-four hours ( delight see excel sheet ) Here, this is clear that antique Ponda district attorney Madeira path is more profitable asnet day-to-day excess on this path higher than ex Dampier path. Ex Ponda district attorney Madeir a path more money generating and can be easy completed with every bit spaced seafaring over the contract period.Cargos required on the both the path ex Ponda district attorney Madeira and ex Dampier path are 7 and 8. On the ex Ponda district attorney Madeira path it will take 295 yearss with 44 yearss every bit spaced piloting which can be easy fulfilled. On the other manus, on the ex Dampier path it will take 395 yearss complete the contract with one ship. So, it is required to hold one cargo acquire done with another ship. This could be the ship which runs on ex Ponda da path. The ship which will run on the ex Ponda district attorney Madeira path will hold adequate clip to finish the needed tunnage of Fe ore hence can be easy do one cargo on the ex Dampier path. Capsize ship will be most conform to for this contract as they can easy raise the over 100,000 metric tons of lading. Capsize ship