Canal transit clauses in charter parties
How charter parties allocate canal transit cost and delay between owner and charterer, and why reservation fees and slot auctions sit awkwardly in the standard forms.
A canal transit clause allocates the cost and the delay risk of a canal passage between owner and charterer. Under a voyage charter, canal dues are a voyage expense borne by the owner and waiting at a canal anchorage ordinarily falls outside laytime; under a time charter the charterer bears the transit cost and the ship remains on hire in the queue.
The full article will cover the treatment under the principal standard forms, the position of waiting time against laytime, demurrage and off hire, and the express clauses used where a canal is subject to restriction. It will pay particular attention to the charges that are not conventional canal dues, including transit reservation fees, slot auction bids and water surcharges, which can exceed the freight on a short voyage and which the printed clauses were not drafted to allocate.