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How to start a lucrative Ship Charter Business
Ship charter services is the service demanded by a person who
has a need for a vessel, when a person has a need for a ship but
does not have what it takes to acquire one, because aside from
the fact that the cost of a ship is on the high side, the cost
of maintaining a ship is far more expensive.
For someone who needs a ship once in a while when he considers
the cost of buying a ship, maintaining it and licensing it with
the documents up to date, he will opt for to charter a ship
rather than buying it. Ships are berth at jetties, and to buy a
piece of land at the water front is more expensive than any
ordinary plot of land, so most ship owners do not have their own
jetties and when their ship is not working it becomes very
expensive to maintain their ship because the cost for berthing
their vessel at a jetty drains most of what they have gathered.
That is why an individual may prefer a charter because the cost
of documentation, running the maintenance, and paying for jetty
can be very expensive, someone who does not get regular business
cannot consider buying a vessel, even those who have business,
in between the time they don’t have a job the daily payment to
rent space to berth the ship depletes most of what they have
saved.
What kind of vessel can be acquired on a charter?
It depends on what the customer wants, that is, the client,
because virtually all kind of vessels can be hired, some body
may need a tanker vessel because he has liquid to carry, another
person might need a container vessel because there is dry cargo
to carry from point A to point B, another person might require a
fast moving boat because he wants to carry security escort, or
it could be a vessel that can be used to survey an oil well
environment.
So, it depends largely on the purpose for the ship because
virtually all types of ship can be chartered. Some may need a
tugboat for towing another vessel at sea. So it all depends on
who needs the vessel and the function that the vessel is needed
for even a ferry can be chartered to convey a group of people.
Now, if the vessel in question is to carry cargo, at what
quantity? Is it a supply boat or a cargo boat, if it is a supply
vessel you might need the type that can carry up to three
containers at the same time.
What is the cost implication of chartering a vessel?
It depends on the size of the vessel, some vessels can be hired
for as much as $10,000 per day, it depends on the size of the
vessel and that depends also on the type of job the vessel is
being chartered for, take for instance, a cargo carrying vessel,
depending on its size can go up to between $25,000 to $30,000
per day, even tanker vessels for transporting fuel, depending on
the size of the tanker and the quantity of the fuel, can also be
hire at that amount per day
What are the things required from a charterer before he can
charter a vessel?
If a person approaches a vessel owner to charter his vessel, the
vessel owner wants to know the nature of the job, what kind of
job the vessel is going to be used for, is it for security or
cargo, he will want to know, if
it is for a surveyor at sea, you must have the
requirements to do the surveyor work and
present the right license to do the job, he wants to
ascertain that the job is a legal job and not an illegal job
that could lead to the vessel being seized.
He will present the charterer with a questionnaire and he will
have to answer all the questions, the answered questionnaire
will be attached to a form that the charterer will fill to proof
that he is a legally recognized operational organization and
that he also wants the vessel for an authorized purpose, then he
can now negotiate the cost for the charter of the vessel per
day.
Another responsibility of the charterer is to fuel the vessel
for the number of days the charter will last. He is responsible
for fueling the vessel, putting oil in the vessel, water that
the vessel and crew on board will use for the number of days
that they will be on the job, he is expected to put the number
of drums of engine oil that will be sufficient for the
number of
days for the job and if he has his men that coming on board, he
will make provision for the necessities that they will need.
So, all these, are the requirements a charterer must meet,
before he can charter a vessel from the vessel owner, he has to
know the amount of fuel that the vessel
consumes in a day and how much fuel it will consume for
the number of days that it is being hired.
So how is it financed?
Mostly, it is a bank to bank transaction, the charterer will
advice his bank to pay into the account of the vessel owner, in
marine business it is supposed to be pay before service but
sometimes when you are on a long time
job of up to one month you may not be able to pay ahead,
so there has to be a kind of mutual agreement to pay as the work
progresses until the work is concluded, then the last balance
payment is paid.
Of course, it will not be a cash transaction; it will be bank
cheque, draft or mutual agreement between the charterer’s
accountant and vessel owner’s banker. It is not done in cash,
you either authorize your bank to pay or you issue a cheque
which is cashed when the job is concluded.
First and foremost, the charterer gets a contract which shows
that he has a job to execute , he takes the authorized job
document and goes to the vessel owner that has the right vessel
for the job, he negotiate with the ship owner on the terms of
agreement of how much it will cost to hire the vessel, per day.
Get our training guide on how start a
successful Ship Charter
Business in Nigeria.
The body of this work is formed from consulting experienced and
relevant people running the Business,
to get first-hand information about the success secrets and
marketing strategies deployed to achieve business success
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