About the contract for shipchandler services (contract for the supply of food and equipment to the ship) + contract template with attachments

A large number of participants work in the shipping industry. Each of them performs its functions and ensures the execution of certain processes to ensure the vital activity of the vessel. These include ship owners, carriers, charterers, freight forwarders, maritime agents, customs brokers, etc.

A special place among the participants is occupied by ship chandlers ( English ship chandler — "ship supplier").

A shipchandler is a person who supplies food and ship's equipment, which is needed by the ship's crew for its normal operation and ensuring the safety of navigation.

The following duties may be assigned to a shipchandler as a maritime transport specialist:

• provision of ship service in the port;
• receiving, according to orders, applications and other documents, goods and material values necessary for the ship: products, raw materials, materials, equipment, products, inventory, stationery, etc.;
• assistance of the ship's administration in establishing contacts with local authorities and trade and supply organizations;
• ensuring timely delivery of goods and material values to the ship, control over their storage;
• control of compliance with labor protection requirements during loading and unloading operations and delivery of goods purchased for the ship;
• preparation of the necessary documentation for goods received and sent;
• making payment at the order of the shipowner and the ship's captain for the goods that were purchased;
• execution of various orders of the ship owner or captain, helping to save costs for the purchase of material resources.

If we talk about international shipping, then the shipowner does not have the opportunity to have a representative office in every port or every country. A constant supply of food and equipment is necessary to ensure the survival of the ship.

To solve this kind of issue, the shipowner must enter into contracts for the supply of food or equipment with different shipchandlers in different countries (ports) that are convenient for him.

That is why the shipchandler is a very important figure in maritime shipping and, in particular, for the shipping company.

Let's consider in more detail the specifics of concluding an agreement on shipchandler services.

Who can be parties to the contract?

In this type of contract, the parties are the customer and the executor.

The customer is the shipping company, the owner of the ship, or the charterers who manage the ship and who ensure the livelihood of the ship and its crew.

Usually, activities related to shipping are large-scale and are carried out by organizations and companies that have the status of a legal entity.

The executor can be a legal entity or an individual entrepreneur who is registered and conducts business in the territory of the relevant state, and has the ability to deliver to the territory of the required port.

It should be noted that if the customer and the owner do not operate exclusively on the territory of Ukraine, then their duties will be related to foreign economic activity. All provisions of the legislation of Ukraine on foreign trade will be applied to such relations.

Based on this, when concluding the contract, it is necessary to specify whether the customer (or contractor) is a resident of Ukraine or not, as well as whether the parties are VAT payers.

Scope of the contract

The subject of this contract is the provision of comprehensive shipchandler services by the contractor, namely services for the supply of food and equipment to the customer's facility (vessel).

Under this contract, the executor undertakes all the obligations of finding, purchasing (or manufacturing), transporting and delivering to the customer's ship all the necessary equipment.

In turn, the customer undertakes to pay for the shipchandler's services in a timely manner, and to fulfill other conditions under the contract.

Among such conditions, it is important to submit a request for delivery in a timely manner, because before the ship arrives at the port, the shipchandler must have time to process the request, prepare the food for transportation, pack it, and draw up the necessary documents, etc.

Therefore, the contract must provide for the terms of submission of such an application, the method of its submission and the addressee.

Taking into account the fact that the operation of the vessel is a rather complex process, representatives of the customer can take part in it. For example, when receiving food, the captain of the ship will sign the receipt-handover act or form an application together with a representative of the company's equipment department

That is why the contract must specify all representatives and persons authorized to perform certain actions in the interests of the customer.

Also, mandatory conditions on the part of the customer include the location of the vessel in the specified port, the need to moor to the berth and resolve all the permit and organizational issues of the ship owner with the port administration.

On the part of the customer, all documents and permits must be issued, all conditions must be created for the smooth and safe delivery of goods by the contractor on board the ship.

Basic terms of the content of the contract.

The main provisions that must be noted in the shipchandler contract include the following:

• List of food and equipment.

During the conclusion of the contract, the shipowner and the shipchandler agree on a general list of food and equipment, which, at the request of the customer, the contractor will be obliged to deliver to the ship. This list may or may not be exhaustive. The name, full description of the product, unit of measurement and method of packaging are indicated in the list. Together with the list of food items, the final delivery price of each item is determined. The specified price must include all costs incurred by the contractor (for example: costs of transportation, packaging, etc.).

The price specified in the contract must be approved for the entire period of validity of the contract. The terms and conditions for revision of the price policy by the executor should also be specified in the contract, if possible.

In the list, it is desirable to indicate the requirements for the quality and packaging of certain types of products, especially for food products, explosive and flammable goods.

In addition, the contract specifies methods of solving issues when the executor cannot provide a certain position in case of its absence. In such cases, he can offer either a similar replacement of the item, or postpone its delivery to the next delivery.

• List of ports to which delivery will be made.

It is very important to indicate the ports to which the ship will ship. A shipchandler can be a local company that will deliver to the territory of one port or several ports of the same state. In other cases, it can be an international company that can provide a vessel on the territory of a certain continent or part of it.

In such cases, the contract must specify a list of all ports, their country of location and the address of the location where delivery is possible.

In the contract, it is also possible to specify the list of ships, indicating their name, home port and IMO number, to which the supply will be made upon application.

• The order of mutual settlements.

The specificity of shipchandler activity is that usually the request for supply is agreed by the captain of the ship, based on the needs of the ship. After that, it is agreed with the supply department of the company or directly with the shipowner, after which it is sent to the shipchandler.

The application is formed in advance, before the ship arrives at the port, and that is why the model of mutual settlements on the spot at the time of receipt of the goods is not convenient, as in the case of the usual delivery contract that we can meet in economic activity.

In addition, very often when receiving food, the ship's representatives can check whether exactly that item, product, or item is suitable. And if not, then they are excluded from the application. The possibility of such a return of the goods and the obligation of the executor to accept it without hindrance should also be specified in the contract.

Therefore, the shipchandler makes the delivery, records the fact of delivery in the act of acceptance of the transfer, which is signed by the captain (or another representative of the ship), and further settlements between the shipchandler and the financial department of the company take place.

The model of such mutual calculations is also important to provide in the contract. You can use the method of advance payment on the balance of the shipchandler's company, and at the end of the reporting period (month, quarter) display the summary of the services provided and the remaining funds on the customer's balance.

• Responsibilities of the parties.

International shipping is a very complex and highly organized process involving many people and institutions. The period of the ship's stay in the port is paid for by the port administration, the owner state and costs quite a lot of money for the company. Penalties for violation of state regulations, rules of stay at the port, overdue deadlines are also very significant in this area. Therefore, any delays of the ship in order to wait for the delivery of food are simply not possible.

That is why the obligations, terms and responsibility for the shipchandler's non-fulfillment of his duties should be written down in detail in the contract, because their non-fulfillment can be very expensive for the shipowner. In this area, everything should work clearly and without delays like a "Swiss watch".

Thus, it can be concluded that the contract for shipchandler services is multifaceted and quite complex in its content. The parties must foresee many points and nuances, so that in the future no controversial issues arise.

In this contract, for fruitful cooperation and avoiding disagreements in the work process, it is desirable for the Parties to agree on the following:

• provide for the possibility of the customer returning certain goods, parts that were ordered and did not fit according to specifications;
• to provide for the possibility of returning goods at other ports, different from the port of receipt of a certain goods;
• the ability of the customer to transfer products for storage in case of temporary impossibility of safe storage on board the ship;
• the possibility of independent replacement by the performer of products with similar characteristics in case of their absence;
• specify by whose forces the loading of food on board the ship should be carried out;
• the possibility of returning the container or packaging of goods to the performer after their use for disposal, etc.

You can draw up and download a template of a shipchandler contract at the link . Or use the extended functionality of the system in terms of keeping a register of counterparties, generate a contract, deed, account filled with data and sign with a qualified electronic digital signature.