Task 1: Voyage Cash flow Analysis and Vessel Chartering
You are a trader in charge of physical grain trading in GrainCo. In addition to regular trading activities you look after transportation requirements of the company too. The company is involved in grain trading and transportation across the world and hires ships under voyage, trip, and time charter-contracts for transportation of cargo.
It is 24 October 2017 and you have identified an opportunity to buy a cargo of 50,000mt of Hard Red Winter Wheat based on FOB price of $162/mt, from sellers in the US Gulf (New Orleans). This cargo can be lifted early November 2017 (5-10). At the same time, you have found that a Far East grain importer who is willing to buy 50,000mt of Winter Wheat from you at $197/mt CFR basis, delivery Nagoya or Mizushima. Moreover, stowage factor of this cargo is 1.15 and loading or discharge is expected to take 3 days each.
Your ship broker has been active and provided you with the following information.
24 October 2017: Available vessels
Vega II:
- Supramax, 56,000dwt (62,000cbm) delivery Rotterdam on 24-25 October 2017, redelivery Japan-SK, $8,500/day for 50 to 60 days hire
- Speed: 13knts;
- Consumption: Fuel Oil: 25mt/day laden, 23mt/day ballast
- Consumption: MDO: 2mt/day in port
- Constants: 400mt
Oceans 11:
- Panamax, 64,000dwt (70,000cbm) delivery Cape Passero (Italy) on 24-26 October 2017, redelivery Japan-SK, $8,250/ day for 50 to 60 days hire
- Speed: 13.5knts;
- Consumption: Fuel Oil: 33mt/day laden, 30mt/day ballast
- Consumption: MDO: 2.5mt/day in port
- Constants: 500mt
Pacific Dream:
- 50,000mt Cargo of grain New Orleans to Japan (Nagoya or Mizushima), laycan 5-7 November 2017, $19.5/mt, basis 4 days for loading & discharge.
Port charges:
New Orleans: Supramax Vessel =80,000 $US Panamax Vessel: 75,000 $US
Nagoya: Supramax Vessel =90,000 $US Panamax Vessel: 80,000 $US
Mizushima: Supramax Vessel =90,000 $US Panamax Vessel: 80,000 $US
Canal Transits
Panama Canal; Panamax Laden = 177,500 $US Ballast=78,600 $US
Panama Canal; Supramax Laden = 167,500 $US Ballast=68,600 $US
Bunker prices
New Orleans Nagoya/Mizushima Rotterdam Gibraltar
IFO = $ 335/mt IFO = $352/mt IFO = $345 /mt IFO = $347 /mt
MDO = $ 610/mt MDO = $648/ mt MDO = $680 /mt MDO = $605/mt
Using the above information as well as make any necessary assumptions
Discuss the options available to you in order to transport the cargo from loading port to destination.
1- Perform appropriate analysis to verify and show which option you should choose.
2- Calculate the overall cost of transportation for this trade.
Task 2: Tanker Freight Calculation & Chartering
It is 23 Jan 2014 and as a chartering manager of a tanker company, you are in charge of operating a clean product tanker (Isabella). The tanker is mainly operating in Euromed regain. The vessel is currently heading to Lavera (Marseille, France) to discharge 30,000mt of gasoline. The ETA of the vessel to Lavera is 12:00 noon on 25 January 2014 and is expected to complete discharge 36 hours after. Therefore, you are trying to negotiate and fix her next cargo through a broker. The broker has informed you about the following two opportunities for your vessel:
1- A cargo of 30,000mt of gasoline Rotterdam (the Netherlands) to Philadelphia (US East Coast) for WS 160, laycan of 4-6 February 2014, charterer Sonoco
2- A cargo of 28,000mt of Naphtha from Genoa (Italy) to Rotterdam (the Netherlands) for WS 170, laycan 1-2 February 2014.
Given the following information and the attached sheets, and assuming that the running costs of the tanker is $6000/day,
a) Calculate the "Net Daily Earnings" and "TCE" of each voyage. Assume 2 days for loading and 2 days for discharge, 2.5% commission.
b) Discuss what other factors you consider in accepting to undertake the voyage.
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AGISILAOS
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ICE CLASS IA OIL, PRODUCT & CHEMICAL TANKER, IMO II/III
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Built 2006
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VESSEL PARTICULARS
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Speed:
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13knts laden
14knts ballast
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Consumption:
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HFO:
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45mt/day laden
40mt/day ballast
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MDO
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5mt/day only in port
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Constants:
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500mt
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Summer deadweight:
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36,700 MT
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Cargo / slop tanks:
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Summer draft:
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11.316 m
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Cargo capacity (98% ex slop tanks):
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40,600 m³
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Summer freeboard:
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5.913 m
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Slop tank capacity (98%):
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1,034 m³
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GRT / NRT:
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23,270 / 9,925
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Cargo tank coating:
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Phenolic epoxy
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LOA:
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184.22 m
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Heating arrangement:
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cargo tanks heating coils
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Beam:
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27.4 m
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SBT / IGS / COW:
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Yes
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Depth:
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17.2 m
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Number of manifolds on each side:
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6 x 12" cargo + 2 x 8" slop
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Keel to mast:
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45.51 m
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Distance bow to mid-point manifold:
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92.63 m
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Port charges:
Rotterdam =130,000 $US Philadelphia = 85,000 $US
Lavera = 95,000 $US Genoa = 65,000 $US
Canal Transits
Panama Canal; Laden = 310,000 $US Ballast=280,000 $US
Bunker prices
Rotterdam Lavera Philadelphia Genoa
IFO = $ 356/mt IFO = $382/mt IFO = $365 /mt IFO = $345 /mt
MDO = $ 510/mt MDO = $548/ mt MDO = $ 540 /mt MDO = $ 525 /mt
Task 3: A Chartering Problem
On 30 August 2017, you bought a cargo of 15,000mt of grain, FOB basis on the GAFTA 64 contract from seller (EXP Grain) in Ukraine. The agreed delivery time was 20 to 30 September 2017 both dates inclusive (GAFTA period of delivery clause 6). You have hired the vessel on the basis of Graincon charter party and instructed the vessel to arrive at loading port based on a voyage charter party with a laycan of 25-30 September 2017. The vessel's previous cargo was coal but the ship-owner has agreed to clean the cargo holds and make sure the vessel be ready to load the cargo. The vessel arrives at the loading port at 9:00 am on 30th September and issues the notice of readiness. The seller (EXP Grain) inspects the vessel and find traces of coal in two of the cargo holds, therefore, rejects the NOR and refuses to load. After contacting the chartering manager of the shipping company, the master orders the hold to be cleaned and issues the second NOR the next day. However, by this time there is another vessel taken alongside for loading and the ship has missed the loading slot and should wait for 5 more days to be able to start loading. The sellers then claim that you, as the buyer, are in breach of the contract by not providing the vessel to load the cargo on time and hence liable to compensate the seller for missing the loading period. However, you are also considering filing for damages against the seller regarding the breach of contract.
1- Discuss what could be the main issue and what counter argument or claim you may provide in this case.
2- Discuss possible alternative options you may have in this case?
Task 4: Theory Question
Discuss different factors that affect the supply and demand for shipping freight market. Then explain the formation of shipping freight rate in tramp market based on the interaction between supply and demand forces under different time frames.