On/Off hire survey

On/Off hire survey. When a ship commences a time charter it is said to be “delivered” to the Charterer.

When the use of the ship has come to an end it is said to be “redelivered” to the shipowner. Although these words are used, it is not really physical delivery and redelivery that are contemplated. Delivery means that the ship is being placed under the charterer’s control as to its employment. Redelivery means that the ship is being returned to the owner’s control. During the period of the time charter the Charterer provides the bunkers for the ship to use. These bunkers must be provided at the commencement of the charter or the Charterer takes over the bunkers that are on board at the commencement or on delivery. When he returns the use of the ship to the owner (redelivery) the owner takes over the bunkers that are still remaining on board.

A clause in the charterparty will ensure this transfer of “ownership” of the bunkers on board. This is the “Bunkers on delivery and redelivery clause”. Naturally, each party will want to state the quantity of bunkers on board at the appropriate time and disputes can arise, especially if there is no qualification in the “bunker clauses” specifying the price to be paid by each party for the bunkers on board.

To minimise this source of dispute between the shipowner and the charterer, independent surveyors may be employed to carry out an on-hire survey on delivery and to carry out an off hire survey on redelivery. The surveyors will sound the tanks, calculate and certify the fuel that is on board.

In addition to bunkers on delivery and redelivery surveyors could also be employed to survey the condition of the ship on delivery and redelivery.

In a time charter the charterer is obliged to redeliver the vessel in β€œ . . . good order and condition, ordinary wear and tear excepted, to the Owners . . .”. The good order and condition must be the same as when the ship was delivered to the charterer. When the ship is delivered (“placed at the disposal of the Charterers”) it must be β€œ . . . ready to receive cargo with clean-swept holds and tight, staunch, strong and in every way fitted for the service . . . to be employed in carrying lawful merchandise . . .” (New York Produce Exchange form).

Therefore on redelivery the ship must be in similar good order and condition with the exception of ordinary wear and tear. For example, if a ship has been time-chartered for a voyage (“Trip charter”) and the cargo was petroleum coke, a very dirty cargo, it will have to be redelivered to the owner with “cleanswept holds”. A surveyor should be able to certify that the ship is in such a condition.

In the ASBATIME charterparty a suggested “Rider clause” deals with the procedure and costs of the on/off hire survey. It states:

“Prior to delivery and redelivery the parties shall each appoint surveyors, for their respective accounts, who shall conduct joint on hire/off hire surveys. A single report shall be prepared on each occasion and signed by each surveyor, without prejudice to his right to file a separate report setting forth items upon which the surveyors cannot agree. If either party fails to have a representative attend the survey and sign the joint survey report, such party shall nevertheless be bound for the purposes by the findings in any report prepared by the other party. On hire survey shall be on Charterers’ time and off hire survey on Owners’ time.”


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