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For Beginners

For Beginners

Want to fix a Vessel?

Let’s decode the Chaos: Main Terms, Rider Clauses, Recap vs CP — Here’s the Real Flow!

 

Understanding the step-by-step process of fixing (especially for bulk cargoes) is essential if you’re working in broking, operations, or chartering.

 

Let me break it down for you in simple flow with focus on what comes when (rider clauses, recap, fixture note, CP etc)

Step-by-Step Process of Fixing

Negotiation Phase

This is where both parties (charterer – broker – owner) exchange terms via email/phone/chat

Discuss main terms like:

  • Freight rate
  • Load/discharge ports
  • Cargo quantity & type
  • Laycan
  • Demurrage/Despatch
  • Payment terms
At this point, each counter/quote builds the foundation

These are additional clauses charterers or owners want to add to protect their interest

Examples:

  • NOR tendering condition
  • Weather working days
  • Stowage plan submission timelines
  • War/sanction risks
  • Draft restrictions
  • Waiting clause etc.
Riders are discussed before fixture is concluded. They get negotiated along with the main terms
Once all terms (main + riders) are agreed — a clean recap is sent by broker or party concluding the fixture

This recap is the summary of the entire fixture and includes:

  • All main terms
  • Agreed rider clauses
  • Applicable charter party form (e.g. GENCON 1994)
  • Any special conditions etc.
This is considered a binding agreement once both sides say “subs lifted” or “fixture confirmed”

Some brokers/charterers create a Fixture Note (short format) for internal or system recording, not a legal document.

 

It’s like a snapshot of the recap.

The final step

  • Based on the recap, the full Charter Party is drafted using the agreed charter party form (e.g. GENCON, NYPE)
  • Rider clauses from the recap are inserted in the rider section
  • Both parties (or their legal/ops teams) review, amend if necessary, and sign the CP
Sometimes the ship is already loading by the time CP is signed – the clean recap holds legal value in such cases

Summary

What Comes When?

  • Main terms discussed
  • Rider clauses added as per the requirement
  • Clean Recap is issued after all terms are agreed
  • Fixture Note (optional) after recap
  • CP drafted & signed by charterer and owner
Quick Tip

The Recap = Legally binding. CP just formalizes the details. Never treat the recap casually!

Quick Tip

The Recap = Legally binding. CP just formalizes the details. Never treat the recap casually!

Cost Responsibilities

Understanding Cost Responsibilities in Shipping Contracts – Simplified for Operations & Chartering Professionals.

 

In shipping, knowing who pays for what isn’t just about cost—it’s about clarity, negotiation, and efficiency.

 

If you’re in operations or chartering, you’ve likely come across terms like FI / FO / FIO / FIOS / FIOST or FILO / LIFO / LILO / FLT

But what do they really mean in practice?

Here’s a quick, simplified breakdown of these terms

FI (Free In)

  • Charterer pays for loading
  • Owner pays for discharge
  • Charterer handles loading extras (dunnage, lashing)
  • Vessel port charges: Owner (POL & POD)
  • Cargo port charges: Charterer (load port)

FO (Free Out)

  • Owner pays for loading
  • Charterer pays for discharge
  • Charterer covers discharge extras (unlashing, dunnage)
  • Vessel port charges: Owner (POL & POD)
  • Cargo port charges: Charterer (discharge port)

FIO (Free In & Out)

  • Charterer pays for both loading and discharge
  • Charterer handles cargo operations (dunnage, lashing)
  • Vessel port charges: Owner (POL & POD)
  • Cargo port charges: Charterer

FIOS (Free In, Out, Stowed)

  • Same as FIO + Charterer arranges stowage
  • Vessel port charges: Owner (POL & POD)
  • Cargo port charges: Charterer

FIOST (Free In, Out, Stowed, Trimmed)

  • All cargo handling (including trimming) by Charterer
  • Vessel port charges: Owner (POL & POD)
  • Cargo port charges: Charterer

FILO / LIFO / LILO / FLT

Common in liner shipping, general cargo and breakbulk trades

FILO – Free In, Liner Out

  • Charterer pays for loading
  • Owner pays for discharging
  • Stowage: Owner
  • Dunnage/lashing at load port: Charterer
  • Port charges:

Vessel-related

Owner (POL & POD)

Cargo-related

Charterer (load port)

LIFO – Liner In, Free Out

  • Owner pays for loading
  • Charterer pays for discharging
  • Stowage: Owner
  • Dunnage/lashing at discharge port: Charterer
  • Port charges:

Vessel-related

Owner (POL & POD)

Cargo-related

Charterer (discharge port)

LILO – Liner In, Liner Out

  • Owner pays for loading & discharging
  • Owner handles all stowage, lashing, dunnage
  • Port charges (vessel + cargo): Owner
  • Full-service liner shipping. Charterer just delivers cargo and waits for discharge

FLT – Full Liner Terms

  • Owner pays for everything: loading, discharging, stowage, securing
  • Vessel port charges - owners (POL & POD)
  • Charterer may pay cargo port charges (if not included in freight)
  • Standard for project cargo and breakbulk shipments.

Key Takeaway

Knowing these terms inside out helps avoid disputes, improves planning, and supports better negotiations in voyage fixtures and COA contracts
Whether you're fixing dry bulk or handling liner shipments, clarity on these cost responsibilities is a game-changer