Introduction
Proper marine transportation is of utmost importance for any business with an international supply chain. Choosing a practical option for the charters is critical for this meat-exporting company to ensure that the products arrive at the supermarkets fresh and do not spoil during transportation. Overall, managing the charters should be thoroughly analyzed to ensure that Argentinian exporters can adequately transport the supplies to British supermarket chains.
The Setbacks of the Liner Charters
To begin with, the meat exporter currently uses the liner service option to transport the supplies to Britain. It is reasonable to consider the changes in transportation for this case, considering that the company ships products that can spoil if they are either stored inadequately or are en route for a long time. Since the liners have a fixed schedule and course, they tend to ship to different locations from various companies.
Besides, the major drawback of using this service is that the fixed transportation schedule forbids the company from quickly delivering the beef to the supermarkets. To elaborate, if supermarket chains urgently need the product as they have little meat in stock, the Argentinian supplier would not be able to deliver it in a few days. The Argentinian exporter not only needs to wait for the next scheduled departure, but the complicated route would take a considerable time for the beef to get to Britain. Thus, exploring the option of switching to time or bareboat charters is critical to tackling the aforementioned issues.
The Primary Characteristics of the Time and Bareboat Charters
The lease of an independent vessel is an effective solution to the transportation time problem and makes it more practical to maintain a contract with a British supermarket chain. The two suitable options are time and bareboat charters. The former is a time-bound vessel lease that allows the charterer to ship supplies to any destination over the paid period (Menon, 2021).
The significant benefit of this option is that the vessel’s maintenance is a ship’s owner’s responsibility, and one has to ensure that it meets maritime standards during this agreement. What is more, the owner and not the charterer would face legal action if the vessel is found to have a problem, which is a significant benefit (Menon, 2021). In other words, the company (or person) renting the ship would not face any legal issues if the transportation means are not up to standard. Naturally, other costs, including crew wages and fuel, are to be covered by the charterer.
As for the bareboat charters, the agreement between the vessel’s owner and charterer are relatively similar but still have some critical differences. For instance, the time-bound contract completely transfers the vehicle’s responsibility to the charterer (Jassal, 2019). In other words, the fuel, crew, insurance, and maintenance become the obligation of the leaser, unlike in time charters, where the owner takes care of one’s vessel (Hurst, 2021).
However, the leaser is free to choose the charter destinations and duration without settling the matter with the owner, which would be rather convenient for exporting beef to Britain (Hurst, 2021). In fact, the charterer becomes the ship’s owner for the chosen time and will be held accountable for any damage to the vehicle (Ross & Gendreau, 2022). This type of charter is a significant liability for the charterer. It is more beneficial to the owner as one can employ one’s ship without being financially responsible for its conditions.
The Legal Aspects of the Two Charter Options
Naturally, such complex time-bound contracts have many legal aspects that must be considered to adequately choose the charter option for the Argentinian meat-exporting company. Time charters primarily operate on daily payments that are calculated based on the time spent sailing (Menon, 2021). The delay reasons must be covered in the agreement so that the charterer is not asked to pay extra (Weve, 2022; Katroutsou, 2021).
Moreover, the contract allows weather-related delays, known as off-hire hours, and should not be covered by the leaser (Menon, 2021). Therefore, including the unforeseen clauses in the agreement is of utmost importance so that unexpected delays would count toward off-hire hours. The primary legal benefit of time charters is that the charterer is not held accountable for a vessel’s unacceptable conditions (Menon, 2021). If anything is not up to maritime standards, legal action will be taken against the owner, as it is one’s responsibility to ensure proper vehicle maintenance.
Unfortunately, the legal aspects of the bareboat charters are not that beneficial to the charterer. Trading warranties are essential and should be considered when delivering certain cargo to specific destinations (Gilabert Gascón, 2021). Besides, the charterer is expected to sail on only up to standard vehicles according to maritime guidelines and, otherwise, would be severely penalized (Gilabert Gascón, 2021).
Naturally, the leaser would be responsible for personal injuries of the crew according to Jones Act claims (Hurst, 2021). The pollution damage is also recognized as the accountability of the charterer based on OPA 90 (Hurst, 2021). The legal exposure of the vessel’s actual owner is almost absent compared to the charterer’s legal liability for bareboat charters.
Conclusion
To sum up, a thorough investigation of both time charter and bareboat charter characteristics concluded that the better option for the Argentinian meat exporter is the firmer. Not only does this option come with little legal exposure, but the aspects of the time-bound contract seem more beneficial to the charterer. Besides, the company would not be responsible for the vessel’s maintenance and would be able to deliver beef effectively to the British supermarket chain.
Also, the payment option appears more advantageous, along with off-hire hours, which can be covered in the contract prior to its signing. Another considerable benefit to the Argentinian exporter would be the freedom to choose the routes to deliver the cargo, even though they have to be discussed with the owner beforehand. In other words, the charterer has many rights when it comes to regulating the vessel and choosing the crew, insurance, and other critical aspects.
Reference List
Gilabert Gascón, A. (2021). Insurance related problems in bareboat charter agreements. Journal of Shipping and Trade, 6(1). Web.
Hurst, I. (2021). Bareboat Charters – What you need to know. International Maritime Group Attorneys at Law. Web.
Jassal, C.R. (2019). A Ship on Time Charter : Here is All a Seafarer need to know. MySeaTime. Web.
Katroutsou, N. (2021). Elements of Time Charter Contracts & Voyages – Veson. Veson Nautical. Web.
Menon, A. (2021). Voyage Charter vs Time Charter. Marine Insight. Web.
Ross, A. and Gendreau, S. (2022). Bareboat Charters: Things to Consider. Henderson Frankin Attorneys at Law. Web.
Weve, V. (2022). Voyage Charter Vs Time Charter. Dexter Offshore. Web.