For many members, the market has been difficult over the past 10 years. We have seen that, as a result, Charterparty terms were increasingly fixed in favor of the charterers. This was also noticeable during the early stages of the COVID-19 pandemic. Fortunately, the market has picked up significantly in the recent months. There is currently a lot of demand for cargo capacity and freight and hire rates are increasing as a result. This positive development in the market gives the members of the NNPC a better position when negotiating new contracts.
When concluding new contracts parties will however often use old contracts which will often date from before the improvements in the market. It is important to remember that in addition to higher hire or freight rates one should also reconsider the other terms and conditions of the contract. Important matters such as who is responsible for the cargo operations, demurrage and the issuance of bills of lading are issued that have often been fixed in favor of the charterer in past years, but as a result of the improving market are once again open for negotiation. In addition, there are many “minor” items which should be considered, including but not limited to:
- Laytime and demurrage
- Stevedore damages
- Guarantees regarding cargo quantities and deadfreight
- Payment conditions and the right of lien
- Applicable law and choice of forum
In the past we have designed two “cheatsheets” (“Check before Fixing” and “Fixing Voyage Charters) that can be used when concluding new charterparties to check the most important terms and conditions. One is specifically designed for voyage charters and the other for time-charters. Please feel free to contact us to obtain a copy or to obtain legal advice on specific terms of clauses.