THE SHIP

INTRODUCTION TO S&P

(SALES AND PURCHASE)

C.P. ORPHANOS

� STRATEGY

� INNOVATION

� INFORMATION / INTELLIGENCE GATHERING

� PERSISTENCE

� PATIENCE

RELATIONSHIPS….RELATIONSHIPS…. RELATIONSHIPS…..

VICTORYVICTORYVICTORYVICTORY……..the sale

SIZE AND TONNAGE TERMS

WEIGHT MEASUREMENTS

� DEADWEIGHT (DWT)

� GROSS TONNAGE (GT)

� NET TONNAGE (NT)

� LIGHT DISPLACEMENT OR

LIGHTWEIGHT (LDT)

SIZE MEASUREMENTS

� CAPACITY

� GRAIN CAPACITY

� BALE CAPACITY

� TEU

� LANE METRES(LM)

� FREE BOARD

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TONNAGE AND LOAD LINES TONNAGE AND LOAD LINES

Measuring the Ship’s size / Carrying Capacity:

GRT (Gross Registered Tonnage) / GT (Gross Tonnage)NRT (Nett Registered Tonnage) / NT ( Net Tonnage)

Whereas:“Gross” – being the total enclosed space – including machinery & accommodation“Net” – just the total space for cargo – excluding machinery & accommodation

Still being used for calculating canal dues and passenger vessels…

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Displacement TonnageDisplacement Tonnage

“DT” – Displacement Tonnage

The actual loaded displacement of the ship. Useful in measuring Navy ships.

Light displacement Light displacement

“LT” – Light Tonnage

Is the actual weight of an empty ship, its ‘metal content’, useful in scrapping.

Deadweight Deadweight

“DWT” & “DWAT” – Deadweight All Told

Total carrying capacity of vessel incl. max. bunkers, stores, etc

or

“DWCC” – Deadweight Cargo Capacity

Same as above but provisions may fluctuate, thus cargo size

Note: Deadweight is the difference of DT less LT

� GRAIN CAPACITYGRAIN CAPACITYGRAIN CAPACITYGRAIN CAPACITY: : : : volume of cargo spaces measured to the outside of frames, to the top of the ceiling and to the top of beams.

� BALE CAPACITY: extends to the inside of cargo battens and to underside of beams. Bulk cargo like grain can flow around beams and frames and fill every part of the hold.

� TEU: carrying capacity of a container ship standing for twenty foot equivalent Units.

� LANE METRES: for ships designed to carry wheeled cargo are measured, these include car carriers and Roll-on Roll-off ships and as the name implies, the measure of the length of the lanes in cargo deck

� FREE BOARD: freeboard is the vertical distance between waterline and the uppermost continuous deck equipped with permanent means of closing all openings exposed to elements.

� LOAD LINE: all merchant ships must be marked with the load line. The upper edge of this line indicates the maximum permissible draught. The load lines known as Pimsoll Mark- are always on both sides of the ship.

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LoadlinesLoadlines

Markings amidships, at both sides, determine the vessels DWT or max. draft/

deepest loading. Different levels due exist for varying conditions (buoyancy)

• TF - Tropical Fresh Water

• F – Fresh Water

• T – Tropical Zone (salt water)

• S – Summer Zones

• W – Winter Zones

• WNA – Winter No. Atlantic

Draft : deepest part of hull to sea level

Freeboard: sea level to top of hull, the top of hull is marked on the hull above

Notes: a) GT – NT may vary depending on desired max Draft .

b) The more the ship loads the greater her Draft and less her

Freeboard.

c) Load Line Certificate, issued by Class

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Draft / Deadweight scale Draft / Deadweight scale

• Supplied by builder to class approval

• Shows state of Deadweight and Displacement

at all possible drafts

TPC - Tons Per Centimeter

TPI – Tons Per Inch

Notes: In both cases number of tons required to

change one line marking of Draft.

See Appendix 2

The waterline is the line where the hull of a ship meets the surface of the water, inconcept or reality. Specifically, it is also the name of a special marking, also known asthe National Load Line or Plimsoll Line, that indicates the draft of the ship and thelegal limit to which a ship may be loaded for specific water types and temperatures inorder to safely maintain buoyancy,particularly with regard to the hazard of waves thatmay arise. Temperature affects the level because warm water provides less buoyancy, being less dense than cold water, as does salinity because fresh water is less densethan salty seawater.

The purpose of a load line is to ensure that a ship has sufficient freeboard (the heightfrom the water line to the main deck) and thus sufficient reserve buoyancy .

The load line makes it easy for anyone to determine if a ship has been overloaded. Theexact location of the Load Line is calculated and/or verified by a ClassificationSociety and that society issues the relevant certificates. This marking was invented inthe 1870s by Samuel Plimsoll.

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Ship Measurement On Volume / Cubic CapacityShip Measurement On Volume / Cubic Capacity

- Grain Cubic Capacity

- Bale Cubic Capacity

Stowage Stowage

Different cargoes/products have different specific densities, which for shipping/

transport purposes is known as “Stowage Factor”.

Cargoes with around 40ft/ton are referred as deadweight cargo

Lighter cargoes, say 50ft/ton are referred as measurement cargo.

For example: 1 ton of ‘Coal’ is about 40 - 58 ft3

1 ton of ‘Cork’ is about 200 ft3

Notes : See Appendix #3 for a Summary table of Stowage Factors.

CARGO CATEGORIES

� GENERAL CARGO

� CONTAINER CARGO

� RO-RO CARGO

� BULK CARGO

CARGO HANDLING MODES

�LIFT ON/LIFT-OFF

�ROLL-ON/ROL-OFF

�PUMP-ON/PUM-OFF

BULK CARGO CARRIERS

BULK CARRIERS-DRY CARGO

� Ore Carriers

� Ore/Oil Carriers and Ore/Bulk/Oil Carriers (OBO’s)

� CAPESIZE BULK CARRIERS

� PANAMAX BULK CARRIERS

� HANDYMAX BULK CARRIERS

� HANDYSIZE BULK CARRIERS

SOME SIZES IN DWT

� Capesize and Newcastle Capes 120-210k dwtBrazilianmax 400k+

� Panamax (Post Panamax/Ultramax/Kamsarmax

60-82k dwt

� Handymax 40-60k dwtSupramax 52-60k dwt

� Handysize from 1k-40k

GENERAL CARGO SHIPS

Some features may include one or more of the following:

� Holds divided by one or more tween decks

� Cargo carried on deck or hatch covers

� Facilities for specific type of cargo (e.g. heavy lift derrick/crane, container securing arrangements, hoistable vehicle decks

� Strengthening for the carriage of heavy cargo

� Some cargo space for carriage of perishable cargo

� The carriage of liquid cargo, usually vegetable oil in special tanksloading cargo by way of side doors/side loader

� The simultaneous or alternative carriage of bulk cargo and other forms of cargo

TANKERS

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TANKERSTANKERS (Portfolio)(Portfolio)

Crude Oil - Product Carriers

CRUDE CARRIERS, PRODUCT TANKERS,

CHEMICAL TANKERS

� ULCC

� VLCC

� Panamax

� Aframax

� Handysize/MR (Medium Range)

� Smaller tankers (usually for bunkering or specialized trade)

STANDARD SIZES

1.000 to 550.000 dwt

Handsize: DWT 10000 – 60000

Panamax: DWT 60000 – 80000

Aframax: DWT 80000 – 120000

Suezmax: DWT 120000 – 200000

VLCC (very large crude carrier):

DWT 200000 – 350000

ULCC (ultra large crude carrier):

DWT 350000 – 500000

BREAKDOWN OF SIZES

� Product Carriers (MR, LR1/2)

� 10 – 100.000 dwt

� Clean Product

� 45-75.000 dwt

� Dirty Products

� 45-350.000 dwt

� Chemical / parcel tankers:

� 1 – 45.000 dwt

DEFINITIONS FOR CRUDE,

CLEAN, PRODUCT

� Crude:

� Clean

� Product

� Chemical

What is Crude?

What is Clean?

What is Product?

Chemical?

Product tankers carry refined petroleum products from oil refineries to ports around the world, where the products are transferred to trucks and rail cars to be distributed to consumers (Product Tankers, Ships Tankers Carry Refined Petroleum Products from Oil, Trucks, Rails, Cars, Ships).

Product tankers carry refined petroleum products from oil refineries to ports around the world, where the products are transferred to trucks and rail cars to be distributed to consumers (Product Tankers, Ships Tankers Carry Refined Petroleum Products from Oil, Trucks, Rails, Cars, Ships).

� Crude tankers move large quantities of unrefined crude oil from its point of extraction to

refineries. Product tankers, generally much smaller, are designed to move petrochemicals from refineries to points near consuming markets.

� Product tankers carry refined petroleum products from oil refineries to ports around the world,

where the products are transferred to trucks and rail cars to be distributed to consumers (Product Tankers, Ships Tankers Carry Refined Petroleum Products from Oil, Trucks, Rails, Cars, Ships).

� The design of a chemical tanker may allow the vessel to carry hundreds of different

liquid cargoes ranging from petroleum products,to inorganic acids,to fish oil,to specialty chemicals. The cargoes transported by chemical tankers can be categorized in several different ways. The cargoes may be divided into groups based on their chemical composition,such as inorganic and organic chemicals.

� The chemical cargoes may be divide into following four groups based on their origin and a specific heavy group.

1) Petro-chemical products

2) Coal tar products

3) Carbohydrate derivatives

4) Animal and vegetable oil, and

5) Heavy chemicals

� Petro-chemical products are those oil products and chemicals that are derived from the refining of crude oil and natural gas.

CRUDE CARRIERS ATTRIBUTES

� PIPELINES

� MANIFOLD

� PUMPROOM

� HEATING COILS (boilers/heating exchanges)

� SEGREGATED BALLAST TANKS (SBT’s)

� INERT GAS SYSTEM (IGS)

� CRUDE OIL WASHING SYSTEM (COW)

� DOUBLE HULL SKINS

CRUDE OIL WASHING (COW)

� Crude oil washing (COW) is washing out the residue from the tanks of an oil tanker using the crude oil cargo itself, after the cargo tanks have been emptied. Crude Oil is pumped back and preheated in the slop tanks, then sprayed back via high pressure nozzles in the cargo tanks on to the walls of the tank. Due to the sticky nature of the crude oil, the oil clings to the tank walls, and such oil adds to the cargo 'remaining on board' (the ROB). By COWingthe tanks, the amount of ROB is significantly reduced, and with the current high cost of oil, the financial savings are significant, both for the Charterer and the Shipowner. If the cargo ROB is deemed as 'liquid and pumpable' then the Charterers can claim from the owner for any cargo loss for normally between 0.3% up to 0.5%.

MANIFOLDS

SEGREGATED BALLAST TANKS

� Compartments at the bottom of a ship or on the sides which are filled with liquids for stability and to make the ship seaworthy. Any shipboard tank or compartment on a tanker normally used for carrying salt water ballast. When these compartments or tanks are not connected with the cargo system they are called segregated ballast tanks or systems.

CHEMICAL TANKERS

� Coatings {marine line, epoxy, zinc}

� Stainless Steel

� Parcel Tankers

� IMO I/II/III

� certificate of fitness

� Types of Coatings

� Benefits of Stainless Steel

GAS CARRIERS

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Gas Carriers LPG - LNG

Cargo tanks types•Spherical (moss system) – independent of vessel structure. •Prismatic (membrane system) – integral to ships structure.

Note: As cargo tank systems are not fully effective, cargo boils off and is collected as fuel “Boil Off Gas - BOG”. LNG’s & LPG’s trade over long term contracts.

� LIQUID PETROLEUM GAS (LPG) CARRIERS

� LPG IS FOUND WITHIN CRUDE OIL DEPOSITS AND A BI- PRODUCT OF THE REFINING OF CRUDE OIL. MAINLY BUTANE OR PROPANE.

� LPG CARRIERS CAN CARRY THEIR CARGO UNDER PRESSURE TO KEEP IT IN LIQUID FORM, AND OTHERS SEMI-REFRIGERATED/SEMI-PRESSURISED

LIQUEFIED NATURAL

GAS (LNG)

CARRIERS� LNG IS GAS AS IS FOUND IN IT’S NATURAL

STATE, MAINLY METHANE AND USED AS FUEL. LNG MUST BE REFIGERATED DOWN TO MINUS 160 DEGREES CELCIUS.

TANKERS AND OIL POLLUTION

� INTERTANKO

� DOUBLE HULLS

� OIL POLLUTION ACT OF 1990 (OPA 90)

� CERTIFICATES OF FINANCIAL RESPONSIBILITY (COFR’s)

� INTERNATIONAL MARITIME ORGANIZATION (IMO)

� MARINE POLLUTION CONVENTION (MARPOL) revised regulation of 13G of Annex I and introduced rules segregated ballast tanks.

� “DROP DEAD” PHASE OUT IN 2015

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TYPES OF SHIPS TYPES OF SHIPS (Portfolio)(Portfolio)

Container Vessel

Container

Cellular Guides

DESIGNED TO CARRY ONLY CONTAINERS AND SELDOM

REFERRED TO IN TONNAGE TERMS BUT IN THE NUMBER OF

CONTAINERS THEY HOLD

� TEU’s (twenty and forty) and the story-McLean in 1956

� Larger container ships have facilities for refrigerated containers

� Typical sizes range between 1000-8000 now as large as 14-15,000 teus (18k next?)

� Feeder ships and port facilities necessary

MISCELLANEOUS

�Cruise ship

�Ferry Boat

�RoRo/Passenger

�RoRo/Cargo

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TYPES OF SHIPS TYPES OF SHIPS (Portfolio)(Portfolio)

Ro-Ro - RoPax

Ro-Ro PCCC

Tweendecker / MPP

MISCALLANEOUS CONTINUED….

� Train/Vehicle/Passenger Ferries

� Vehicle Carriers

� Livestock Carriers

� Fishing Vessels

� Offshore Vessels such as supply ships, tugs, dredgers, sludge carriers, barges

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---- Other Types / Specialized VesselsOther Types / Specialized Vessels

RoPaxOBO / VLOOKamsarmaxFeedermaxReefersDrillship / FPSOsand on it goes….

TYPES OF MACHINERY

� B&W / PIELSTICK / WARSTILA-SULZER Engine power referred to in terms of Brake Horsepower (BHP) and often this is followed by its equivalent in kilowattas (kW). 1000kW=approx 1400 bhp.

� Fuel and Consumption: generally this refers to a number of tons of fuel-oil per day (usually detailing the grade of oil)

� GENERATORS: 2 or 3 in larger ships due to heavy dependence on electric power, which can use the same heavy fuel as main engines.

� CARGO HANDLING EQUIPMENT: cargo pumps for tankers and winches and derricks and cargo cranes.

� BOW THRUSTERS AND STERN THRUSTERS: small electrically driven propellers attached on the side of ships allowing for maneuvering in ports without the use of tugs and forward speed

� Ballast Pumps: dirty ballast water into oil/water separators to avoid any oil being pumped into the ocean.

� Sewage Treatment

GA PLAN (GENERAL ARRANGEMENT)

� This plan includes details of the hull shape, decks, holds, hatches and the main equipment and invariably includes a deadweight scale which shows the draft the ship will draw at every stage from empty to fully laden.

CHAPTER 1 ESSAY QUESTION

� What major event triggered and led to major legislation (name oflegislation) being passed in 1990 in the United States that affected the future of all tankers; describe in detail the difference between the various sizes and categories in the tanker segment i.e. difference between Product Tankers, Crude Carriers and Chemical tankers, Gas Carriers. Describe examples of dirty and clean cargo and descriptions of what type of ships normally carry which cargo.

� Also provide examples of Geared and Gearless Bulk Carriers and why some ships have gears and others do not.

CHAPTER II

SHIP REGISTRATION

� THE NEED FOR REGISTRATION

� THE GROWTH OF ‘OPEN’ REGISTRIES

� THE CURRENT SCENE

� POSITIVE AND NEGATIVE ELEMENTS OF FLAGS OF

CONVENIENCE (FOC’S)

� SHIP REGISTRATION AND THE SALES AND PURCHASE BROKER

ship registration is the process by which a ship is documented and given nationality of the country that the ship has been documented to. The nationality allows a ship to travel internationally as it is proof of ownership of the vessel.

International law requires that every merchant ship be registered in a country, called its flag state. Ship registration is similar to a person receiving a passport. A ship is bound to the law of its flag state. It is usual to say that the ship sails under the flag of the country of registration.

The organization which actually registers the ship is known as its registry. Registries may be governmental or private agencies.

A registry that is open only to ships of its own nation is known as a traditional or national registry. Registries that are open to foreign-owned ships are known as open registries, and some of these are classified as flags of convenience.

THE NEED FOR REGISTRATION

� Like Humans must have a name and nationality it’s the same with ships…which require a port of registration and nationality before setting forth on the oceans of the world. A certificate of Registration is issued which has an official number allotted to the ship together with her port of registry, details of tonnage and construction with details of her owners.

� The Registration Certificate is the most important of the ship’s papers and kept on board vessel under the custody of the Captain.

� The ship is considered part of the territory of the flag she sails and name of ship MUST appear on both sides of the bow and Port of Registry on the stern.

� The only acceptable evidence of identity with the legal protection and assistance from her country. Even in time of war unless she is violating neutrality or trying to run a blockade she is entitled to full protection under International Law.

� A ship without papers would be regarded as “STATELESS” and could be regarded as a “PIRATE” Ship.

THE GROWTH OF ‘OPEN’ REGISTRIES

� Traditional maritime nations impose regulations and conditions for all shipboard personnel. In many cases heavy burdens from powerful trade unions imposing wage levels. This combined with high rate of taxation from these more advanced countries makes registration under a traditional flag less popular. Ships owned in high-cost countries become uncompetitive in the international market of shipping business. The U.S. was one of the first to encounter this problem.

� Close links with Panama from the early 20th century created incentives through tax breaks and cheap labor, and neutrality during time of warmade it attractive for American companies to switch to Panama, Honduras and Liberia.

� Relaxed regulations and minimum taxation led to flags of convenience often leading to unscrupulous owners that often tarnish the reputation of FOC.

THE CURRENT SCENECOUNTRIES OFFERING FLAG OF CONVENIENCE HAVE

PROLIFERATED

Costa Rican, Cypriot, Haitian, Lebanese, Marshall Islands, Omani, San Marinese, Sierra Leonian, Somalian, Vanuatuan and many more. The reason for this explosion of FOC’s is to create incentive for ship owners under continuously changing market conditions where profit margins are thin.

INCENTIVES:

1.No taxes on profit; no fiscal control

2.No labor restrictions

3.No political restrictions

4.Flexible corporate laws

5.Easy financing because of simple mortgage laws

6.No risk of political instability or nationalism

7.Minimum safety laws and regulations

POSITIVE AND NEGATIVE ELEMENTS OF

FLAGS OF CONVENIENCE (FOC’S)

� INTERNATIONALITY AND PERFECT COMPETITION THAT SHIPPING OPERATES IN

� RELAXED FOC’S HAVE LED TO SUB STANDARD SHIPS AND OWNERS

� PORT STATE CONTROLS (power to immobilize ship if surveyors find safety, seaworthiness and/or crew welfare issues)

� TAX ISSUES, RECENT CHANGES IN GREECE REGARDING FLAG

MORE REPUTABLE FLAGS FOCUS MORE ON INTERNATIONAL

CONVENTIONS DEVISED BY THE International Maritime Organization (IMO) a United Nations Organization

�SAFETY OF LIFE AT SEA (SOLAS)

�INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING,

CERTIFICATION AND WATCHKEEPING (ITCW)

�INTERNATIONAL SHIP MANAGEMENT CODE (ISM)

�MARPOL BASED ON 1990 OIL POLUTION ACT (OPA 90)

SHIP REGISTRATION AND THE SALES AND

PURCHASE BROKER

WHAT’S EXPECTED FROM S&P BROKER

� Familiarity in brokers own National Flag

� Basic knowledge of who’s who in registration and access

WHAT NORMALLY HAPPENS?

CHAPTER 2 ESSAY QUESTION

What is the purpose of ship registration and the role that flag plays for ships? Describe in the best detail you can why ship owners register under FOC’s (Flags of Convenience) and the pros and cons related to this; describe some incentives/reasons that principles of shipping companies follow.