Under the FIO terms, who is responsible for these charges?

The loading and unloading charges are ultimately specified through the loading and unloading terms in the charter party. Common loading and unloading terms in practice include:

1. FLT (Full Liner Terms, the shipowner is responsible for loading and unloading)

2. FIO (Free In and Out, the shipowner is not responsible for loading or unloading)

3. Filo (Free In and Liner Out, the shipowner is not responsible for loading but is responsible for unloading)

4. LIFO (Liner In and Free Out, the shipowner is responsible for loading but not unloading)

5. FIOST (Free In and Out, Stowed and Trimmed, the shipowner is not responsible for loading, unloading, stowage or trimming)

Through these terms, we can clearly understand who should bear the loading and unloading charges. However, apart from the loading and unloading charges, there are many other costs related to loading and unloading, such as stowage, trimming, tallying, lashing, dunnage, etc. How are these costs classified under various loading and unloading terms?

1. Stowage

Stowage mainly occurs during the handling of general cargo or bagged goods. It is done to ensure that the goods are properly stacked within the hold for safe navigation. Moreover, proper stacking of goods can also make full use of the ship's space and reduce the cost of broken stowage. The reasons for conducting stowage are many and still related to ship safety, load conditions, and stability. Therefore, under the lease agreement, it should be the responsibility of the shipowner. Unless otherwise agreed, such as in FIOST.

2. Trim

Trim is mainly for bulk cargo operations. Since this operation helps maintain the ship's stability and prevents the goods from moving halfway, and it also enables more efficient utilization of the ship's space, especially in the middle and both ends of the ship, trimming is similar to stowage in spirit. Under the common law, it is the responsibility of the shipowner. If the shipowner does not want to be responsible, he must clearly stipulate it in the lease agreement. This is clearly stated in the Jin Kang lease agreement. In the FIO method, it is explained that it includes stowage and trimming, meaning the charterer is responsible. For those who are not familiar with the Jin Kang lease agreement or other lease agreements, the best and safest approach is to explicitly state it, such as in FIOST or FIO SPOUT TRIM.

3. Tallying

Under the liner terms, the consignor only needs to transport the goods to the ship's side. The rest should be the responsibility of the shipowner. However, in most FIO practices, tallying (Tally) should clearly be the responsibility of the charterer. Nevertheless, there is a controversy in practice regarding this: When the consignor gathers the goods at the port, a port tallying company will count the goods. During loading, there will also be a tallying company boarding the ship for tallying, and this latter tallying is usually mandatory. All the costs are included in the shipowner's port charges. Since it is included in the port charges, it should naturally be the responsibility of the shipowner. The best way to resolve this dispute is to clarify the responsibilities through explicit terms. For example, many leases will explicitly state that tallying below the ship is the responsibility of the charterer, and tallying on board the ship is the responsibility of the shipowner, etc.

4. Lashing & Securing

Under the liner terms, undoubtedly, lashing and securing should be the responsibility of the shipowner. However, under the FIO terms, it is usually considered that lashing and securing should be the responsibility of the charterer. The charterer often complains about this. The lashing and securing work is closely related to the ship's seaworthiness, safety, and stability, and should therefore be the responsibility of the shipowner. In reality, the final work of ensuring the safety of the ship and cargo is reviewed by the chief mate on board. The charterer often wastes a lot of time and money communicating with the shipboard. As the old saying goes, the best way to resolve this dispute is to clarify the responsibilities through explicit terms. Therefore, many leases will include similar clauses such as "FIO, but lashing and securing are the responsibility of the shipowner".

5. Dunnage

To secure, or to position properly, or for ventilation and drainage during the voyage, general cargo or bagged goods often require dunnage. The dunnage materials can be planks, battens, mats, etc. There are different opinions regarding who is responsible for the dunnage work. One view holds that as a necessary condition for providing a seaworthy vessel, the dunnage materials should be provided by the shipowner; another view holds that the responsibility for providing the dunnage materials lies with the party responsible for stowage under the lease agreement. In other words, under the FIOS or FIOST practices, it should be the charterer who provides the dunnage. This dunnage material is a significant expense and is often only used once. Indeed, treating it as part of the ship's equipment and requiring the vessel to have dunnage materials for being seaworthy makes no sense at all. In the Jingkang lease, it is explicitly stated that the charterer is responsible for the dunnage materials.

In summary, under the liner terms, the port or berth is regarded as the choice of the shipowner, and the loading and unloading workers are also considered as the employees of the shipowner. The above-mentioned fees are relatively clearly attributed to the shipowner. However, under the FIO or FIOST terms, it is usually the responsibility of the charterer, but in actual practice, there are still many disputes and confusions. The solution is to specify it in the lease contract.

Therefore, in work, when we cannot determine the attribution of the cost, we should first check if there is a clear stipulation in the lease contract. If not, we must make a cautious conclusion. Different lease contract templates will have different interpretations.