Description
Only to answer the three questions, no need to write abstract,introduction and conclusion
Instructions
8. Your answer script should be 2200 words in total, ± 10%. You are required to include your word count on the title page.
10. Question numbers must be clearly shown beside each answer. References MUST be provided in-text and in a reference list as per the Harvard 2002 style of referencing. Please also include a Table of Contents. However, there is NO requirement to include an abstract, introduction or conclusion with your examination.
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Explanation & Answer
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Ship Chartering i
SHIP CHARTERING
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Ship Chartering ii
Table of Contents
Ship Chartering ............................................................................................................................... 1
Question One .............................................................................................................................. 1
The Aspect of Ship Valuation Certificate ............................................................................... 1
Question Two .............................................................................................................................. 4
Types and Sources of Market Information Available to Charterers and Ship Owners .......... 4
Question Three ............................................................................................................................ 6
Terms Used Commonly in Charter Parties and Liner Bills of Lading ................................... 6
Reference List ................................................................................................................................. 9
Ship Chartering 1
Ship Chartering
Question One
The Aspect of Ship Valuation Certificate
The process of constructing shipping vessels takes time and resources, which necessitates
the need to process a ship valuation certificate so that investors can have the final valuation of
the asset. The valuation process resembles the standard procedure of identifying the worth of
assets, such as land, vehicles, or houses. Ships play an essential role in the transport industry
since the vessels contribute to the movement of 90% of the world’s bulk goods from one port to
the next (Adland, Alger, Banyte, & Jia 2017, p.3). In this case, the shipowner needs to consider
all requirements in the maritime industry, age and current condition of the vessel, and size.
Although the valuation process may cap the price at a certain point, the seller can decide to
increase the cost or reduce it depending on the current market forces.
The process of acquiring the ship valuation certificate requires resources, which the
shipowner shares with other parties due to the high cost involved. Due to the time and
investment needed while constructing a new ship, investors need to ensure that the valuation
procedure takes the right course to avoid challenges in the future. The processes of performing
ship valuations arise if owners wish to seek funds from the banks or if they wish to sell. During
such periods, bank managers can order for independent assessments to determine its worth
before releasing money to the owners (Choi & Erikstad 2017, p.1129). Creditors ensure that the
valuation process involves professionals so that they can estimate the amount the ship can raise
in the case of a possible auction sale.
Marine surveyors have the mandate to conduct ship valuation, especially those with
marine engineering or naval architecture backgrounds. In order for the shipowner to sell the
Ship Chartering 2
vessel, he/she requests for condition survey, which determines the condition of the asset before
selling it to another person or company. After the valuation process, the shipowner seeks a ship
valuation certificate, which indicates the current condition of the vessel. The buyer demands the
document since it enables one to develop an understanding of the ship (Sødal, Koekebakker, &
Aadland 2008, p.184). Further, it allows the buyer to have adequate time to r...