Chartering

a type of commercial activity in which contracts are negotiated for the conveyance of cargo or passengers by maritime, river, air, or motor vehicle transport. Chartering is most common in maritime shipping, where it takes a variety of forms; vessels may be hired under a voyage charter (for one voyage or a series of voyages), under a contract arranged on a lump-sum basis, or under a time charter. In tramp operations, maritime shipping contracts usually take the form of a charter party; for liner operations, a bill of lading is used.

In capitalist countries, chartering is usually done through private specialized intermediaries, or brokers. In many countries, however, the state’s role in chartering is gradually increasing.

In the USSR, chartering is a regulated activity carried out through the state chartering monopoly, which is part of the state monopoly of foreign trade. The following all-Union organizations handle charters: Sovfrakht, Sovinflot of the Ministry of Merchant Marine, Aeroflot, and Sovtransavto. The USSR belongs to several international organizations involved in international shipping and chartering, including the Committee of Shipping of the UN Conference on Trade and Development and the Inter-governmental Maritime Consultative Organization. Soviet shipping organizations are members of international nongovernmental organizations concerned with navigation, such as the Baltic and International Maritime Conference.

Chartering in the other socialist countries is also based on state monopoly. A special body, the Conference of Chartering and Ship-owning Organizations of the Member Countries of the Council for Mutual Economic Assistance (COMECON), has been functioning since 1963 within COMECON; its purpose is to develop and implement measures leading to cooperation among the socialist countries in maritime shipping and chartering, in accordance with the Comprehensive Program for Socialist Economic Integration Among the Members of COMECON, which was adopted in 1971.

Chartering has an important role in the developing countries. These nations, which do not have large fleets, must rely on the ships of capitalist monopolies. The high freight rates they are forced to pay impair the ability of their goods to compete on the world market. In an effort to join forces against the dominance of the capitalist ship-owning monopolies, the developing nations are forming regional international ship-owning companies; these include Namucar, in the Caribbean; the Arab Maritime Petroleum Transport Company of the member nations of the Organization of Arab Petroleum Exporting Countries (OAPEC); and the Malaysian International Snipping Corporation, in Southeast Asia.