© INSTITUTE " CHARTERED SHIPBROKERS ‘TUESDAY 19" NOVEMBER 2019 - MORNING INTRODUCTION TO SHIPPING Time allowed ~ three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Answer BOTH parts of the question. a) Describe TWO of the four main types of crude oil tankers and the deadweight capacity. b) Using the world map provided to support your answer, draw the crude oil trade routes identifying FOUR major crude oil load ports and FOUR discharge ports. Define and briefly discuss ALL these shipping terms. a) Nvocc b) Naabsa <) COA d) NOR fe) SHEX Explain the role of each of the following, and their function in shipping. a) IMO b) ITF c) P&I Clubs d) PSC Using the world map provided draw and name the main oceans, seas and canals. PLEASE TURN OVERIdentify and discuss the main functions of a Bill of Lading. ‘What is the role of a ship registry? Tropical revolving storms (hurricanes, typhoons, and cyclones) affect shipping in different parts of the world. Using the world map provided indicate the areas in which such storms can occur, the seasons when they occur and explain what steps a vessel may take to avoid such weather. Answer BOTH parts of the question. a) What is required to create a legally binding contract? b) Discuss how tort can provide legal recourse for an injured party where no contract is in place. Give an example of a type of tort.ype INSTITUTE oF Ni ee eX ) 3 SHIPPING BUSINESS General comments A high number of the papers received this exam session decided that it was a good idea to give their answers in bullet point. This is not a good idea, unless you are on the last question and only have 5 minutes left to try and get as many marks as possible. The reason it is not recommended as a method of writing the entire exam is that bullet points tend to be one fact points. you will at best get one mark for the point, but only if the way you have stated it makes rational sense. There was also a tendency to rote learn and regurgitate this information as an answer. The exams. are designed to test your understanding of the knowledge you have gained and to see if you are able to apply it to a work placed scenario. Simply reciting facts does not demonstrate an understanding of the topic. Students were guilty of assuming the examiner knew what they were referring to. We cannot mark what you do not say. Please avoid using words or phrases such as etc, various stakeholders, and so forth, or as per my previous answer. You need to give all of the details if you are to get the marks. Qi. Describe vertical and horizontal integration in business, and discuss the advantages and disadvantages of each of these. ‘This was a two part question that first asked you to give a definition of vertical integration ~ | Vertical integration is a strategy where a firm acquires business operations within the same production vertical e.g. BP. It can be forward or backward in nature. Firms expand into upstream or downstream activities, which are at different stages of production, ‘And a definition of horizontal integration. Horizontal integration is the acquisition of a business operating at the same level of the value chain ina similar e.g. Unilever, ‘Students than had to explain the advantages of each. Vertical integration can help companies reduce costs and improve efficiencies by decreasing transportation expenses and reducing turnaround time. Horizontal integration - Companies may choose to undergo horizontal integration in order toincrease their size, diversify product or services offerings, achieve economies of scale, or reduce competition. They may also wish to gain access to new customers or markets, including overseas. Horizontal integration - the ability to produce more revenue together compared to if they were to compete independently. In addition to this, a newly merged company can cut down on costs by sharing technology, marketing, research and development (R&D), production, and distribution. Then students had to discuss the disadvantages of each. Vertical integration ~ lower costs and efficiencies may be achieved if the company relies on the established expertise and economies of scale of other vendors rather than trying to become vertically integrated. Horizontal Integration - even though a horizontal integration may make sense from a business standpoint, there are downsides to horizontal integration for the market, especially when they succeed. By merging two companies that operate in the same supply chain together, it can cut down con competition, thereby reducing the choices available to consumers. And if that happens, it may lead to a monopoly, where one company plays a dominant force, controlling the availability, prices, and supply of products and services. In order to prevent monopolies, horizontal integrations are subject to anti-trust laws in the United States and the Enterprise Act 2002 in the UK. These laws are in place to protect consumers from a merged entity ift has too much influence and a high market concentration ‘Marks were also given for examples and mentioning a conglomerate integration involving the merging of two firms making different products. For example, a shipping company merging with a food processor. Where students went wrong \Very few answers looked at the advantages and disadvantages from a broader perspective than just how they impacted on the company. ‘Q2. Discuss the relevance of quality management systems in the mai and potential problems that may occur in implementation? time industry (eg.1509001) You needed to give a definition of a quality management system and to know that itis a documented process that records the company’s administrative functions, processes and operational procedures. It demonstrates quality; it tries to ensure that the same level of service is given every time. Anyone ‘coming into the company should be able to comply with the requirements by reading the ISO manual, It is independently audited usually by classification societies \tis an adaptive system designed for continuous improvement Problems are cost, resistance to change, staff buy in, the negative impact of losing the accreditation Where students went wrong ‘Not a lot of answers spoke about the advantages to new employees trying to learn the ropes being able to use the ISO manual as a good reference point on what the company expected‘Another point that was missed is that itis @ growing and adaptive document that must evolve as the | company does. What is acceptable practice today may not work in tomorrow's market and so itis important to have an ISO system that is adaptive A danger of having an ISO system is that ifit is not properly managed a company could well lose its, accreditation and the negative impact of that on the market will be detrimental to the company Q3. The IMO has five main conventions. Using ONE of these, 's implementation. iscuss its origins, and the effects of In order to answer this question, you needed knowledge of the IMO and the conventions Mention itis part of the UN established in 1948, operational in 1959 and is a specialised agency with responsibility for the safety and security and the prevention of marine pollution. The governing body being the Assembly, then the Council of 40, and the five committees, Maritime Safety, Marine Environment Protection, The Legal Committee, the Technical Co-operation committee and the Facilitation committee. ‘The second part of the question wanted you to discuss one of the following conventions ~ SOLAS, MARPOL. IMS, ISPS and STCW, giving an explanation of why it was agreed and the effect of its implementation. Where students went wrong if you are asked to give 1 example do not give three or five. All you are doing is wasting time that could be spent on another question. The examiner will only mark the first example you discuss, not the others. Alot of answers did not appreciate that its the flag state that needs to implement these rules. They accredited powers to the IMO which they do not have. Ifyou use the Titanic as an example, you had to explain how a ship that sank in 1911 had a role to play in an organisation that was only established in 1948. Otherwise it just appeared that you had either no idea as to when the Titanic sank, or when the IMO was founded, {Q4. On boarding the vessel shortly after its arrival at your port, you find the representative from the ITFis on board, What is the ITF and what is its functions? This question was asking you to demonstrate knowledge of an organisation that has an important role still to play in ship and crew welfare. The first thing required was to know what the acronym ITF stands for - International Transport Workers’ Federation, You then needed to give an explanation of its founding and aims, including when it was founded, The International Transport Workers' Federation is a democratic global union federation of transport workers’ trade unions, founded in 1896. Headquarters are in London, members: 19.7 million, 677 affliated unions. ‘The aims of the ITF are as follows: 1. Promote respect for trade union and human rights worldwide. 2. To work for peace based on social justice and economic progress.3, To help its affiliated unions defend the interests of their members. 4, To provide research and information services to its affiliates. 5. To provide general assistance to transport workers in difficulties, Plan of action to ensure owners adhere to a defined minimum condition for all seafarers. Stuttgart Congress. Problems with open registries and trying to force owners away from using them. 1971 Vienna conference standard agreement drawn up, Contribution to the ITF fund that goes towards seafarer welfare. Where students went wrong First and foremost, no one is simply permitted to walk on board a ship and start asking questions. There is the ISPS cade to consider as well as the fact that the ship is the crews’ home. It is only good manners to ask permission before coming on board, A large number of answers did not know what the initials ITF stood for and a number confused the ITF’s role with that of Port State Control ‘There was also a tendency to talk about truck and train drivers and other related industries and whilst the information was correct, itis not relevant to an exam paper on shipping business. ‘Q5. Explain how currency fluctuation and freight rate fluctuations can impact the vessel and cargo ‘owner, and how they can protect themselves? ‘This question asked you to explain first currency fluctuation and then freight market fluctuations and to give measures that could be used to mitigate against these fluctuations. Foreign exchange fluctuations. Neither party can accurately predict what the rate of exchange between the two currencies will be and so they need to look at taking some form of forward cover. Explanation of forward exchange contract, foreign currency options. Know that Spot contracts or spot exchange rate is not a form of protection, Freight rate changes — freight futures contract, charterers buy if they think the freight rate may rise, owners sell if they think the freight rate may fall FFA trading a specified time or voyage charter rate for a forward position. BOI and other indices are used for settlement agreements. FFABA — Know that if either the owner or the charterer gains in the one market they will lose in the other. The concept being that if the freight market rises the ‘owners benefit and pay In when the contract ends. Should the freight market fall the charterers will compensate owners. Forward Freight Agreements (FFAs) provide a means of hedging exposure to freight market risk through the trading of specified time charter and voyage rates for forward positions. Settlement is effected against the relevant route assessment. Forward Freight Agreements brokered by the FFA Broker's Association (FFABA) are ‘over the counter’ (OTC) products made on a principal-to-principal basis. As such, they are a flexible product and not traded on any Exchange. Contracts traded will normally be based on the terms and conditions of the FFABA standard contracts amended as agreed between the principals. ‘The main terms of an agreement will cover: | [a) The agreed route.[(b) The day, month and year of settlement. (c) Contract quantity {d) The contract rate at which differences will be settled. Settlement is between counter parties in cash within five days following the settlement date. Commissions will be agreed between principal and broker. Where students went wrong COA’s protect one party or the other from fluctuations in the freight market, but they cannot protect, both as elther the owner or the charterer is going to be wishing they did not commit to the contract depending on whether the freight rate rises or falls If you mentioned spot market, you had to give the reasons as to why this is a risk not just state it 2s an option. ‘Q6, What are the origins ofthe Baltic Exchange, why offer? important and what services does it Itis important that people in the industry are able to discuss with confidence, the organisations that play a role in the business that we are all involved in. A number of questions in the exam paper called on you to demonstrate that you are familiar with these institutions and the role they play. ‘The Baltic Exchange wes founded in 1823; mention Virginie and Maryland Coffee House, Virginia and Baltic 1744 merged with London Shipping Exchange 1900 and parent company the Singapore Exchange. Itis the only independent source of maritime market information for trading and settlement of physical and derivative contracts. ‘An explanation of the services offered by the Baltic Exchange include an independent source of maritime market info, freight indices using Freight Futures Agreements via electronic trading. The Baltic Dry Index incorporating ship sizes Capes, Panamax and Handysize. Also add that it has a Board (12 +3 Directors) and over 600 members. It maintains an ethical code, Our Word Our Bond with learning and training programmes. Mention that Singapore is looking to become a maritime financial hub and that the Singapore Exchange sees an opportunity to expand its derivatives trade. Where students went wrong \Very few mentioned Singapore and the new parent company of the Exchange, ‘Q7. Atime charter party has key clauses that must be agreed. Briefly explain what a time charter party is. Discuss FIVE of these clauses and why they are important. Explanation of what a time charter party is - taking vessel on hire from a point of delivery, usually within agreed laydays for a set period or for a specific trip on payment of hire in advance by the time charterer to the vessel owner. A reasonable explanation of clauses including the following: vessel description, period of hire, hire rate and frequency of payment, payment details, speed and consumption, delivery at a named location, delivery within an agreed laycan/ at the first location, amount of hire payable, payment terms, excluded products, trading limits, bunkers on delivery/redelivery, owner's duties, charterer'sduties 7 Where students went wrong. The question asked for an explanation of five clauses, any five would have gotten you the marks and yet students tended to look to discuss obscure or difficult clauses. Why make it dificult for yourself, stick to the basics. ‘students giving explanations of voyage and bareboat charters simply wasted their time as this was rot asked. Also giving explanations of more than the five clauses did not gain you any additional marks (QB, Answer BOTH parts of the question. a). Explain the hazards associated with carriage of grail b) Describe the types of ships grain is carried in and show THREE possible load and discharge ports, any hazards, and the routes the ship would follow. Use the world map provided to support your answer. What the examiners were looking for: {a) Hazards associated with the carriage of grain, shifting with the need for self-trimming ships, {gas emission from microbial action requiring ventilation, pests, heating requiring monitoring temperatures at sea, excessive moisture content resulting in swelling, mould and sprouting, ‘Add a stowage factor for a product type e.g. wheat 1.30 cubic metres per metric ton Mention Solas 1974 and Grain Carriage Regulations. (b) Specialist bulk carriers with self-trimming holds upto Kamsarmax, post panamax are used. (c) Load ports include — ‘Australia - Brisbane, Newcastle, Sydney, Port Kembla, Melbourne, Adelaide, Port Lincoln, Esperance, Albany, Freemantle and Geraldton. South America - Bahia Blanca, Necoshea, Buenos Aires, Rio Grande, Santos, Paranagua, Rio De Janeiro, Rosario, San Martin and San Lorenzo. Russia — Novorossisk, Ukraine - Odessa, USA - Corpus Christi Houston, New Orleans, Seattle, Portland, Puget Sound Canada - Vancouver, Prince Rupert, Duluth , Thunder Bay, Port Cartier, Quebec Europe - Southampton, Tilbury, Rouen. Nantes, Antwerp, Rotterdam, Hamburg etc. Identify main routes ports and countries of load discharge ~ USA/Canada/UK/Cont Med/Far East. Australia Far East/Med. ECSA/UK/Cont/Med Far East and identify Hazards. Where students went wrong. The description of the vessel cannot just be a bulk carrier. You needed to give details of what type of bulk carrier and the specifications of the ship you discussed. If you draw the ship you also need to give the main dimensions of the ship and label the drawing.It is important to know where ports are and when discussing routing you cannot give your answer as South America to China, you need to know the ports major commodities are exported from and which countries import them and through which ports Map drawing — lines should not cross over land and the route should go all the way from port to Port. A vague line in the middle of an ocean does not convey an understanding of the routes. With the hazards, it should include not just the hazards of the cargo, but also the routes you are going on. If you mention weather, give the type of weather and give the seasons or months when the phenomenon is experienced.wares INSTITUTE oF of }: CHARTERED SHIPBROKERS ‘THURSDAY 21" NOVEMBER 2019 - AFTERNOON DRY CARGO CHARTERING Time allowed - three hours Answer any FIVE que: Please read the questions carefully before answering ns — all questions carry equal marks Your vessel has been fixed to load a cargo of 45,000 5%MOLOO tonnes of steel products at a rate of S000pwwd SSHINC. Demurrage has been agreed at $10,000 per day and despatch at half demurrage. ‘The vessel has arrived at the loading port, tendered NOR and commenced loading in accordance with the terms of the charter party. After two days the charterer has advised that only 35,000 tonnes will be available due to a strike at the steelworks. Your ship can safely load this quantity and the charterer has agreed to pay deadfreight. Loading of the 35,000 tonnes completes after seven and a half working days. There have been no weather delays or other stoppages. What effect will the failure by the charterer to deliver a full cargo mean for laytime and demurrage/despatch calculations? Answer BOTH parts of the question A ship has been fixed on a time charter. The owner has received a speed and consumption claim from the charterer. The vessel is a bulk carrier and has been operating mostly in the Pacific for several periods of low activity. a) What is a speed and consumption claim? How might it occur? b) Explain FOUR other common reasons for disputes under time charters. Explain both ‘an arrived ship’ and ‘aytime commencement’ and draft a voyage charter clause covering Notice of Readiness/Laytime commencement. A prospective owner of dry bulk ships needs advice on market developments over the next 5 to 10 years and what class of vessel to invest in. Write a report giving reasons for your recommendations of tonnage and whether the company should order new or buy second hand? PLEASE TURN OVERAnswer ALL parts of the question. Using the graph paper and the world map provided to support your answer; a) Draw fully labelled profile and fully labelled cross section for a handy size bulk cartier b) Include the principal particulars and specifications of the vessel ©) Give a description of one principal trade route from load port to discharge port for the type of cargo carried. Give details of hazards and weather conditions for this route, Upon completion of loading a cargo of steel products on your ship, the Mate’s receipts have been claused. The Charterers, however, are requesting your Owner to sign Clean on Board Bills of Lading against Letter of Indemnity. Write a message to your Owner to explain a) What is the Mate's receipt and the meaning of the term ‘claused’ b) What the Master should do and whether LOI should be accepted. Use the Bill of Lading functions to support your advice. ©) What problems could arise by signing clean on board bills of lading? Discuss the use and significance of ALL of the following in a voyage CP. a) Demurrage and dispatch b) Loading and discharging range ) NOR and time counted. Answer BOTH parts of the question. You are a shipowner of Supramax vessels and have seen the following enquiry in the market AJC: ICS Shipping & Trading Co Ltd, Panama Looking for Supramax of max 20 yrs Time Charter period of 6+6 months ely: Indonesia fedely: trading area = UC: 1-5 December 2019 rading area: Worldwide 75% ttl comm incl 2.50% addeom a) Write a timecharter offer for the above enquiry for one of your vessels b) Write a timecharter clause covering all aspects of bunkers on delivery and redelivery.epee |NSTITUTE oF t \ CHARTERED s SHIPBROKERS ‘TUESDAY 26" NOVEMBER 2019 - MORNING SHIP OPERATIONS AND MANAGEMENT Time allowed - three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering. Answer ALL parts of the question. a) Describe the characteristics (for example dimensions, tonnages, cargo gear, equipment) of ONE of the following types of vessels, i. Capesize bulk carrier ii, MR tanker. iii, Modern Panamax container vessel. b) Drawa side profile and cross sectional of the vessel, ¢) Label the significant parts of the vessel. d) Give details of ONE trade the vessel operates in, where and how it will load, carry, and discharge its cargo. Use the world map provided to support your answer. Answer ALL parts of the question. a) Explain the difference between fixed costs, operating or daily running costs and voyage costs. How would you place the following costs in the above categories? i, Tug Charges ii. Supply of Paint for upcoming drydock iii, War Risk Insurance Premium iv. Additional War Risk Premium v. Crew joining costs vi. Annual Class survey of ISM system vii, Fuel Testing service fees viii, Registration Costs ix. Cost of LSFO for use in ECA. x. New Radar System for the vessel. b) What additional cost items would also be included in the above categories? PLEASE TURN OVER3. One of your vessels has been fixed to carry out the following voyage. Using the factors below calculate: a) What cargo quantity can be loaded? Show your calculations to support your answer. b) Where would you bunker? How much you would order? And your reasons for this. ) What daily net profit would you earn for this voyage? The vessel is currently completing discharge at Tampico (East Coast Mexico). Bunker ROB on completion S50 MT IFO 380 at US$ 425 pmt, and 200 MT LS 0.1% Gasoil at USS 640 pmt. Intention is to place vessel on spot market on completion Osaka with same quantity of bunkers as on completion Tampico. Vessel must have 200 MT Fuel safety margin on board at all times. At load or discharge ports bunkering is concurrent with cargo operations. Currently expecting and allowing maximum of one day's delay for transit of Panama Canal. SDWT 46,520 MT on 11.4 SW. Grain Cubic 59,755 m3, 5 HO/HA Constant including FW 650 MT Loaded speed / cons 13 KTS on 27 MT IFO 380/ LS Gasoil PD Ballast speed / cons 14 KTS on 27 MT IFO 380/ LS Gasoil PD Port consumption 4 MT IFO 380/ LS Gasoil PD Daily running cost USO $ 8,900 / day ‘The Cargo: - 45,000 MT +/-10% MOLOO Bulk Soya Beans (SF 1.36). Lake Charles - Osaka, Max draft load and disport 11.6 M SW. Max draft Panama 11.7 SW 14,000 SSHEX load/ 11,000 SSHINC disc. Freight US$28 PMT Commission 5%. Distances: Tampico - US ECA = 450 NM US ECA - Lake Charles = 220 NM Lake Charles to US ECA = 220 NM USECA ~ Balboa Panama including Panama Canal transit= 1305 NM Balboa to Osaka = 7971 NM Bunker Prices: ‘Tampico - USS430 PMT IFO 380 No LS Heavy Gasoil Lake Charles- US$390 PMT IFO 380. USS600 LS Heavy Gasoll 0.1% Balboa - USS385 PMT IFO 380. US$595 LS Heavy Gasol 0.1% (6 hours delay taking bunkers), (US$3,500 barge cost), Port Costs: Load port US$ 43,000 Discharge port US$ 58,000 Panama Canal Transit Fee USS 81,000Answer ALL parts of the question. Your VLCC is due to complete discharge at Yokohama, Japan in late November 2019 and will sail via Malacca Strait to Mina al Ahmadi, Kuwait where it is fixed to load 20-22 December 2019. You will need to take bunkers during the ballast passage. The subsequent loaded passage is via the Cape of Good Hope to the US Gulf for discharge. Your vessel uses conventional fuels and does not yet have a scrubber system. a) Explain the types of fuels you will need to have on board for this complete voyage to meet all the current SECA and ECA requirements, and the new regulations that will come into force during the loaded voyage. b) Using the world map provided, show the route your vessel will take indicating all the ports mentioned, including your chosen bunker ports and the main details of the voyage. ¢) Explain your reasons for your choice of the two bunker ports and why they have become major locations for bunkering, ‘Answer ALL parts of the question. a) Explain the role of a classification society in shipping. What services do they offer? b) What surveys are required by Class during the life of a vessel? Under what other circumstances might Class inspect the vessel? ©) Give details of five certificates issued by Class including their validity, verification requirements and what they certify. Answer ALL parts of the question Your handymax vessel is due to load a cargo of grain from South America in January for discharge Northern Europe. Your last cargo was mixed timber and wood products. To ensure the safety of your vessel and the proper carriage of the cargo; a) What information must you find out about the vessel and what preparations would you take before loading? b) What precautions would you take during and at completion of loading? ¢) What actions would you take during the loaded voyage? d) What weather and climate conditions would you expect to encounter during the voyage. Use the world map provided to support your answer. PLEASE TURN OVERYour vessel is moored alongside a berth and is close to completing discharge of a cargo of steel coils. A vessel approaching a berth to moor ahead of you with pilot on board and tugs in attendance loses control and makes contact with your vessel, penetrating a side ballast tank and causing other structural damage in No3 hold. A crewman and two stevedores suffer injuries while working in the hold. a) What immediate action should the crew take on board your vessel? b) What should the management company do to assist the vessel and the crew? cc) What assistance is available at the port and in the local area? d) What insurances does the vessel have to cover this incident? The International Maritime Solid Bulk Cargoes Code (iIMSBC) came into force in 2011. Your vessel has been fixed to load a solid bulk cargo of mineral concentrate which is listed as Group A under the code. a) What is a mineral concentrate and what specific hazard does a listing under this, group signify? b) What general information must be given to the vessel to enable the crew to prepare for this cargo? ©) What specific documentary information must be given by the suppliers/shippers to the vessel prior to loading? d) What must the vessel agree before loading with the terminal, and what must be checked during the load to ensure that the requirements of the IMSBC code are met.= INSTITUTE ) CHARTERED SHIPBROKERS MONDAY 25" NOVEMBER 2019 - MORNING SHIP SALE & PURCHASE Time allowed - three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering What are the functions of the seller’s and buyer’s mortgagees on a vessel sale? All shipbuilding contracts have liquidated damages provisions. Explain the purpose of these provisions and identify what types of deficiency are usually covered by such provisions. Using a Saleform of your choice, assess how the buyer's default and seller's default clauses operate Discuss the considerations that a broker should raise with his principal when recommending a flag state for a 15 year old bulk carrier operating in the Indian Ocean and Australasia Discuss the role of the supervisors in a newbuild contract and the factors that need to be taken into account when appointing them. ‘Analyse the impact of environmental issues in ship recycling contracts. Use examples to support your answer. ‘Answer ALL parts of the question. a) Provide a detailed description of a handymax bulk carrier including size, dimensions, machinery and other significant equipment and features. b) Draw a profile and cross-section of the vessel labelling the dimensions and other significant parts of the vessel. ¢) On the world map provided show THREE trade routes for appropriate cargoes for this vessel type. Show load and discharge ports. Your principal wants to make an offer for a Suezmax tanker on an outright basis. Draft a full terms offer for their approval.© INSTITUTE oF CHARTERED SHIPBROKERS WEDNESDAY 27" NOVEMBER 2019- MORNING TANKER CHARTERING Time allowed - three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering, Answer ALL parts of the question. a) Draw a profile and cross section of a modern Panamax tanker, showing the main details and dimensions. b) Describe TWO trade routes that this vessel is usually fixed, Use the world map provided to support your answer. ) What weather conditions could be anticipated for a vessel loading in June? Provide a crude oil and dirty tanker market report for a tanker owner that includes current market and future trends over the next 6 months. Draft a firm offer for a Contract of Affreightment (COA) including all the main terms with an explanation of the meaning of each. Explain why a COA is used by owners. Answer ALL parts of the question. ‘An owner is considering engaging a VLCC in a port operation involving the lighterage of cargo. a) Draft a notice clause for a tanker engaged in a ship to ship (STS) lightering operation in a voyage charter employment. b) What periods may be excluded from laytime in a fixture involving lighterage of cargo from a VLCC? c) When does laytime end for the above proposed fixture? Atime charterer has defaulted with the second hire payment for a fixture involving a sub-charterer employment. Recommend the actions the owner should take, given 2 good market for this vessel type. PLEASE TURN OVERDraft a full recap for an LR2 tanker loading crude oil from Bonny to Rotterdam explaining the main terms. Explain the agreed Worldscale laytime that will be used in this fixture at load and discharge ports and how WS 100 is calculated Prepare a voyage estimate (using your own data) for a typical chemical tanker with a cargo of vegetable oil using ports of your choice. Show calculations to support your answer. Include the details of proposed routes and gross voyage surplus. Answer BOTH parts of the question. a) Explain the role that the Hague Visby rules play in a voyage charter party for the use of a bill of lading. b) Describe the clauses that are incorporated in a fixture that makes provisions for bills of lading and explain their purposes.CHARTERED SHIPBROKERS ‘TUESDAY 26" NOVEMBER 2019 - AFTERNOON LINER TRADES Time allowed - three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Recent times have seen further consolidation of carriers in the deep sea and short sea container trades. There has also been a move from some carriers into the full logistics sector. Discuss these events and the latest structures that have arisen. Explain whether you would expect this trend to continue and the likely structure over the next five years. Choose TWO of the container trade routes listed below and identify the most important ports of call and main commodities carried in both directions. Discuss how services are structured and whether they are ‘end to end’, ‘hub and spoke’ or ‘pendulum’ style services and vessel capacities used. Explain why that structure is favoured for the route. Use the world map provided to support your answer. i, Europe to US East Coast (Transatlantic) ii. Asia to East Africa Asia to South Africa When a carrier enters a new trade lane there are many factors to consider when setting the pricing policy it will apply to this market, Discuss the important determining factors, from both a revenue and cost perspective, that is considered when drafting a liner carriers pricing policy for a new trade. Define and explain any FOUR Incoterms 2010 terms and where the selected terms would be best applied for specific cargo, PLEASE TURN OVER 15, Answer BOTH parts of the question. a) Draw a labelled profile and labelled cross section of ONE of the following vessels i. Handysize 1700 teu container vessel (geared or gearless) ji, 9000 teu containers iii, 4000-5000 teu Panamax containership b) Describe TWO main trade routes for this vessel, including main types of cargo carried on each route. Use the world map provided to support your answer. Refrigerated cargo represents a growing large volume of containerised freight globally. Select TWO cargo types and their requirements on a trade of your choice. Use examples to support your answer. Compare and contrast ALL the following types of bills of lading and how each are used differently, depending on the needs of the seller and buyer. a). Straight bill of lading b) ‘To Order’ bills of lading c) Sea Waybills d) Bearer Bills of lading The FONASBA standard liner and general agency agreement provides a good summary of the relationship between the carrier and their agents with duties each have to each other. Define the main terms of the agreement and comment on each of these from the agent's and principal's point of view.CHARTERED SHIPBROKERS TUESDAY 26" NOVEMBER 2019 - AFTERNOON LINER TRADES Time allowed three hours ‘Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Recent times have seen further consolidation of carriers in the deep sea and short sea container trades. There has also been a move from some carriers into the full logistics sector. Discuss these events and the latest structures that have arisen. Explain whether you would expect this trend to continue and the likely structure over the next five years. Choose TWO of the container trade routes listed below and identify the most important ports of call and main commodities carried in both directions. Discuss how services are structured and whether they are ‘end to end’, ‘hub and spoke’ or ‘pendulum’ style services and vessel capacities used. Explain why that structure is favoured for the route. Use the world map provided to support your answer. i. Europe to US East Coast (Transatlantic) ji, Asia to East Africa iii, Asia to South Africa When a carrier enters a new trade lane there are many factors to consider when setting the pricing policy it will apply to this market. Discuss the important determining factors, from both a revenue and cost perspective, that is considered when drafting a liner carriers pricing policy for a new trade. Define and explain any FOUR Incoterms 2010 terms and where the selected terms would be best applied for specific cargo. PLEASE TURN OVER 1Answer BOTH parts of the question. a) Draw a labelled profile and labelled cross section of ONE of the following vessels i. Handysize 1700 teu container vessel (geared or gearless) ii, 9000 teu containership iii, 4000-5000 teu Panamax containership b) Describe TWO main trade routes for this vessel, including main types of cargo carried on each route. Use the world map provided to support your answer. Refrigerated cargo represents a growing large volume of containerised freight globally. Select TWO cargo types and their requirements on a trade of your choice Use examples to support your answer. Compare and contrast ALL the following types of bills of lading and how each are used differently, depending on the needs of the seller and buyer. a). Straight bill of lading b) ‘To Order bills of lading ¢) Sea Waybills, d) Bearer Bills of lading The FONASBA standard liner and general agency agreement provides a good summary of the relationship between the carrier and their agents with duties each have to each other. Define the main terms of the agreement and comment on each of these from the agent's and principal's point of view.3 x @ INSTITUTE oF CHARTERED SHIPBROKERS ¥ Ces MONDAY 18"* NOVEMBER 2019 ~ AFTERNOON PORT AGENCY Time allowed — three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Explain EACH of the following. a) MOLCO b) ciF ©) u/Fo d) ARAG How do port agents manage cash flow? You are the charterer’s nominated agent for a vessel discharging a cargo of steel in a port of your choice. On behalf of the local receiver you have arranged stevedores and a fleet of vehicles to deliver the cargo direct to the receiver premises directly from the ship. However the vessel master has not agreed to open the hatches as the original bill of lading has not been presented and is not in your possession. Discuss your actions. Explain the terms ‘breach of warranty of authority with negligence’, and ‘breach of warranty of authority without negligence’. You have been approached by a tanker owner. They have requested that you supply a formal proposal for handling weekly port calls of a 10,000 dwt tanker discharging kerosene cargoes. The owners have asked you to provide a full package of agency and relevant added value services. Write a proposal offering your full agency services. How will new technologies affect the role and function of ship agency? PLEASE TURN OVERUsing the world map provided show appropriate load and discharge ports, suitable vessel types, dimensions and tonnages as well as voyage routes for ONE of the following cargoes. i Grain ii, Woodpulp iii, Bauxite Compile a detailed time sheet and calculate demurrage or despatch due from the information within the statement of facts. MV Tutorship Arrived Buenos Aires Roads (0400 Hours Monday 3" March NOR Tendered 1000 Hours Monday 3“ March Loading Commenced 0700 Hours Tuesday 4" March Loading Completed 0600 Hours Monday 10" March Vessel Sailed Buenos Aires 0900 Hours Monday 10" March Cargo Loaded 20,000 M/Tonnes Grain C/P States: ““Laytime to commence at 1300 Hours if notice is given before Noon, at 0700 Hours next working day if given after noon: Notice to be given in ordinary working hours” “Cargo to be loaded at the rate of S000 metric tonnes per weather working day of 24 consecutive hours.” Time from 1700 Friday or the day preceding a holiday to 0800 Hours Monday or next working day not to count unless used, but half of actual time used to count, unless vessel already on demurrage. The port loaded the vessel 24 hours per day. Demurrage rate USD 5000 Per Day and Pro Rata/Despatch at half demurrage rate on laytime saved. On Tuesday 4" March - Rain Stopped loading between 0900-1400 Hours, On Wednesday 5"" March - Rain stopped loading between 1000-1400 Hours. On Thursday 6” March - The vessel was unable to load cargo between 1200-1800 Hours, due to a technical problem with the conveyor stopping the supply of grain to the vessel from the silo. On Friday 7" March - Due to rain the vessel stopped loading between 1000-1100 Hours. (On Sunday 9" March - Rain stopped loading between 0900-1200 and 1300-1700 Hours. No local, national or international holidays occurred during this period of time.© INSTITUTE oF CHARTERED SHIPBROKERS WEDNESDAY 27" NOVEMBER 2019 - AFTERNOON PORT AND TERMINAL MANAGEMENT Time allowed ~ three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Describe the port equipment and facilities that you would find at a dedicated timber terminal, ‘What is a Freeport, and what are their benefits? Using a port of your choice, describe the management structure in the port. Use a diagram to support your answer. Discuss the advantages and disadvantages of private versus public port ownership. Discuss the health and safety practices you would expect to find in a container terminal Explain ALL of the following abbreviations a) Teu b) UNCTAD ¢) ISPS a) VTS Using the world map provided show the major trade routes for ONE of the following commodities. Draw an appropriate vessel type, including tonnages and dimensions which would be employed in carrying this commodity. i. Crude oil ii, Grain Describe the techniques which a port authority could use to improve its cash flow.© INSTITUTE OF CHARTERED SHIPBROKERS MONDAY 18" NOVEMBER 2019 - MORNING LOGISTICS AND MULTI-MODAL TRANSPORT Time allowed ~ three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Explain the role which distribution centres have for a company importing consumer goods into a country of your choice. Discuss, using examples, the advantages and disadvantages of operating with a single distribution centre, or several smaller distribution centres. Explain in detail FOUR of the following terms/abbreviations, and their significance in multimodal transport. i. NvocC ii, FMC iii. ADR code iv, Hague-Visby Rules v. UCP600 vi, CMR. Answer ALL parts of the question. Explain the main differences between each of the following a) Abillof lading and a waybill b) straight bill of fading and a ‘to order’ bill of lading, ©) A through transport bill of lading and a combined transport bill of lading. In each case, give examples of how you would use these different documents, ‘Answer BOTH parts of the question. a) Explain the origin and development of INCOTERMS, and the role which they play in international commerce b) Describe how the responsibilities and risks are divided between buyer and seller for both INCOTERMS 2010; i FCA i, CF PLEASE TURN OVERYou are a retailer of consumer goods, based in UK, importing clothing from a supplier in Turkey, Describe using examples the different modes of transport and routes you could use to transport your goods from the supplier to your distribution centre in the UK, together with the advantages and disadvantages of each mode/route. Use the world map provided to support your answer. Discuss the advantages and disadvantages of transport systems being in public or private ownership, with specific examples from two different modes of transport or modal interfaces. Container operators need effective systems to manage their inventory of containers and to ensure that they can both minimise their costs and provide a high quality service to their customers. Describe the key business functions carried out by a container management system, and highlight the benefits which they bring to the operators’ business. Answer ALL parts of the question Explain why a multi-modal operator might charge different freight rates for door to door FCL shipments in the following circumstances. Support your answer with examples, a) The same cargo, but shipped from A to 8, compared with a shipment from B to A ») The same cargo, but shipped on a direct port to port service, compared with a transhipment service ©) The same cargo between the same two points, but shipped by two different shippersWEDNESDAY 20" NOVEMBER 2019 - MORNING OFFSHORE SUPPORT INDUSTRY Time allowed - three hours ‘Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering 1, Explain FOUR of the following terms/acronyms and their use. i, Joystick ji, Marine Riser iii, Towmaster iv. ECA v. Saturation Diving vi. BOP 2. Explain the meaning and relevance of ALL the following on a vessels spe sheet; DNV # 1A1, Supply Vessel, SF, TUG, EO, DYNPOS-AUTR, Comf-V(3), Clean Design, NAUT OSV (A), DK(+), HELOK, OILREC, ICE (C) 3. Answer BOTH parts of the question. a) Describe using diagrams to support your answer, the general arrangement and operational concept of a jack-up drilling rig. b) Discuss and compare the operational parameters of these units with other MODUs. 4, Explain the primary differences between DP Classes 1, 2 and 3 and give examples of some of the types of vessels within each DP Class. 5. Arrange of cargoes are transported by supply vessels to offshore installations, Describe FIVE of these cargoes and provide a description of their use, methods used for their safe carriage and methods used for transfer to and from the installation. PLEASE TURN OVERDiscuss the advantages and disadvantages for an offshore oil company in operating their own chartered supply vessel fleet in comparison to contracting their cargo requirements to a marine logistics company. It has been suggested that the offshore renewable energy industry could create a rising demand for an existing OSV fleet supporting oil and gas installations. Discuss this suggestion and compile conclusions for a report to your existing OSV operating clients. Provide an explanation of FOUR standard Charter/Contract forms regularly used in offshore support.‘THURSDAY 28" NOVEMBER 2019 ~ MORNING SHIPPING LAW Time allowed - three hours ‘Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering While discharging a cargo in London, a vessel is arrested for non-payment of bunkers. The action is later on joined by other claimants, namely, a dockyard for non-payment for repairs carried out a year earlier, and also by the members of a repatriated crew from the year before for unpaid crew-wages. Discuss the ranking of the claims and liens brought before the Admiralty court by the various claimants, supporting your answer with suitable case laws. Avessel while on a time charter suffered engine problems, and was anchored off the coast of Somalia to undertake repairs. While the vessel was being attended to, hostilities broke out between pirates and the government operatives. Progress on the repairs was difficult, as there was the constant danger of destruction. Eventually the vessel arrived at the discharge port 60 days behind schedule. The charterers do not wish to pay the owners any hire charges for the period covering the various delays — particularly the period when the vessel was delayed due to hostilities, between the pirates and the government operatives. Please advise the charterers. The Athens Convention (Merchant Shipping Act 1995) has a significant impact on passenger claims. Discuss the carrier’ right to limit liability under the convention PLEASE TURN OVERWhen is a salvor entitled to reward under the Salvage Convention 1989, for saving or minimising damage to the environment? Discuss with suitable examples to support your answer. Using examples of case law to support your arguments, discuss how the Himalaya Clause extends defences that are available to carriers to third parties. Both the common law and The Hague-Visby rules require a shipowner to make the vessel seaworthy. Compare and contrast seaworthiness under common law and the Hague-Visby rules. Use examples to support your answer. What consequences are there for a sh ‘owner under the Hague-Visby rules if he fails to provide a seaworthy ship? Payment of hire is viewed as the primary obligation under a time charterparty contract, and commercial shipping practice imposes the rule ‘delayed payment is no payment’. The courts have taken differing views on the subject, with one expressing the view that payment of hire is a ‘condition’ and another describing the term as ‘innominate’. Analyse critically the above observation, with reference to case laws. Answer BOTH parts of the question. When the NOR is accepted, laytime commences obliging the charterer to either commence loading or discharging at the port. Discuss, with particular reference to case law, the following: a) when laytime starts for both port and berth charterparties, and b)_ what happens if the Notice of Readiness is invalid= INSTITUTE © CHARTERED SHIPBROKERS THURSDAY 28" NOVEMBER 2019 - AFTERNOON MARINE INSURANCE Time allowed - three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering ‘What is the duty of ‘fair presentation’ introduced under the Insurance Act 2015, and how has it modified the duty of ‘good faith’ which underpins a marine insurance contract? Discuss the difference between the concepts of ‘total loss’ and ‘constructive total loss ‘in relation to both the hull and the cargo policies. Explain the purpose and function of a Shipowners’ Protection & Indemnity Club, and how it benefits the shipowners ‘Answer BOTH parts of the question. Explain the use of a) floating Policy under S.29 of the Marine Insurance Act 1906 b) an Open Cover under the Marine Insurance Act 1906. Use suitable examples to support your answer, ‘Answer BOTH parts of the question with relevant examples. a) What is meant by ‘assignment of policy’ and the rights of an assignee under the assigned policy. b) What are ‘perils of the sea’ as per the Marine Insurance Act 1906? PLEASE TURN OVERAnalyse the doctrine of ‘proximate cause’ in marine insurance practice with relevant case laws. The doctrine of subrogation is statutorily recognised by the Marine Insurance Act 1906, and it is common practice for insurers to include subrogation provisions in a policy. Explain the rights of a subrogated insurer. Use examples to support your answer. The Insurance Act 2015 introduced changes to the Ml Act 1906 and modified the position that a breach of warranty would entitle the insurer to avoid all claims under the policy from the date of breach. Explain the change introduced in the Insurance Act 2015. In your opinion has this eliminated the significant effects of breaching a Warranty or, made it more complicated for the market?WEDNESDAY 20™ NOVEMBER 2019 - AFTERNOON SHIPPING FINANCE Time allowed three hours Answer any FIVE questions ~ all questions carry equal marks Please read the questions carefully before answering Identify the main components in a shipping company's balance sheet that a lender should ay particular attention to when deciding whether or not to make a loan. Identify possible weaknesses and how these may be reduced or managed. You are the marketing director for an Islamic bank looking to develop its client base in the shipping sector. Prepare a proposal to a Middle Eastern-based oll tanker owner, explaining the principles underpinning your business, and the specific instruments which may be suitable for its line of business. You should also explain the advantages the company may achieve from doing business with you compared with a non-Islamic bank ‘Answer ALL parts of the question, Advise an owner with regard to the most appropriate type of loan to refinance existing debt in ALL of the following circumstances. Risks to the lender should be discussed in the context of each type of loan proposed. a) Earnings are presently low and itis only possible to meet operating expenses. An upturn in the market is expected in two years’ time. ») Earnings are currently booming but rates are expected to decline soon, ¢) The market is in depression and there are under-priced vessels for sale due to corporate failures. The owner wants to buy up vessels but interest rates are presently high 4) The owner has high levels of floating rate debt in its capital structure: interest rates are expected to rise in the immediate future. Explain the characteristics of convertible bonds, describing the advantages for borrowers and opportunities to investors, and the risks to all parties concerned. In which ways could convertibles be suitable for shipping company borrower, taking into account share price behaviour at the different stages of the shipping cycle? PLEASE TURN OVERDescribe the forms of security which @ lender may take in respect of a loan made to a cash- rich parent company which owns all the shares in several one ship subsidiaries registered in different jurisdictions. In the case of each security, discuss the relevant procedure which must be followed, the potential risks to the lender, and how these risks may be reduced or managed, ‘Answer ALL parts of the questions. You are the Chief Finance Officer of a shipping company which intends making a syndicated bond issue. The company already has a high level of debt, and most of its vessels are old: a) Discuss the functions of all participants in a syndicated bond issue, with the aid of a diagram. b) Describe the typical factors a ratings agency will take into account when assigning a rating to the bond which will be issued, ¢) If potential investors are concerned that the company will be unable to meet repayment of principal on maturity, and that the value of the vessels may have fallen by this date, what measures could the company take to address these concerns? A family-owned shipping company headquartered in a developing country is exploring the feasibility of raising equity finance on the New York Stock Exchange. It has several long term charterparties with the state-owned oll company of the country in which it is based, but ‘most of its vessels are otherwise employed in local markets in East Africa, regularly sailing between Eritrea and Tanzania, through the Gulf of Aden and into the Indian Ocean. The shares are owned by the family, and the board is dominated by relatives of the company's founder. The company has several outstanding high interest-bearing loans in place, and made a seven year bond Issue five years earlier. Apart from a few recent acquisitions of ‘newbuilds, the fleet is old and repair and maintenance costs have been escalating. Prepare a briefing report for the founder, identifying the risks and opportunities which would need to be disclosed in a prospectus should the company want to raise equity on the New York Stock Exchange. You should also briefly discuss the legal framework (the statute or law] which applies, and the liabilities of officers. What information is held by each of the following, and how might this information affect a financial institution's decision whether or not to make a loan to a shipowner? a) Marine insurance companies b) Classification societies ©) Port state authorities ¢)_ Internationat Transport Workers Federation