SOP Library
SOP NO:
GM.DL05
(List of Exhibits/Attachments)
Mission
:
Technical Support Services
Area:
Grains Marketing (GM)
Title:
SOP on the Hiring of Vessels for Domestic Operations Through Voyage Charter
Date Approved/Issued:
01/01/1999
Date Effective:
12/22/1998
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A. Accreditation of Ship Owners/ Charterers/Vessel Contractors
1. A Committee on Vessel Chartering (CVC) shall be created by the Regional Offices concerned to handle the evaluation and accreditation of all applicants who wish to enter into voyage charter with NFA.
2. The CVC shall be composed of the following members:
Chairman : Assistant Regional Manager
Vice-Chairman : Regional Operations Officer
Members : Regional Quality Assurance Officer
: Regional Investigator
: Regional Accountant
: Regional Economist
Observer : Commission on Audit
3. For economy measures, the Department for Marketing Operations (DMO) shall publish, at the outset of the implementation of this program, a Notice of Simultaneous Accreditation in NFA Regional Offices in at least two newspapers of general circulation for three consecutive days. The notice shall specify the scheduled date of meeting to discuss the accreditation policies, procedures and accreditation proper.
4. The accreditation shall be opened to all interested shipping companies/vessel owners/operators who are registered/licensed by MARINA . Application for and processing of accreditation shall be a continuing activity of the Regional Offices.
5. The applicant shall submit to CVC an accomplished application for accreditation for vessel chartering. This shall be accompanied by a formal letter indicating their intention to be accredited as NFA carrier of grains, corn, feed grains, empty sacks, by-products, sugar and other commodities.
6. Interested parties shall also submit the following documentary requirements to CVC:
6.1 Certified Photo Copy of Certificate of Marina
Registration/License.
6.2 List of vessels owned, managed or operated, with their corresponding capacities, which shall be committed to serve the hauling/dispersal requirements of NFA together with the following documents:
6.2.1 Latest Certificate of Inspection/Seaworthiness
6.2.2 Coastwise License
6.2.3 For Chartered Vessels - Bare Boat /Time Charter Contract which states that the liability of the vessel owner does not diminish on any shortage /damage that may be incurred while the cargoes of NFA are under his vessel's custody. Moreover, a certificate from the Registry of Deeds and / or MARINA stating that the vessel is not mortgaged twice shall also be submitted.
6.3 For Single Proprietorship
6.3.1 Registration of Business Name with the Department of Trade and Industry ; and
6.3.2 Special Power of Attorney authorizing a representative to represent the firm in all its transactions with NFA and to sign all documents relative thereto.
6.4 For Corporations/Partnerships/Cooperatives
6.4.1 SEC Registration or DTI Registration or
CDA Registration;
6.4.2 Articles of Incorporation and By-Laws/or
Articles of Partnership/By-Laws and Constitution; and
6.4.3 Board Resolution/Authority authorizing a representative to sign documents in all its transactions with NFA.
6.5 List of clients for the past two years of the firm’s operations
7. Upon receipt of the application and supporting documents, the CVC shall verify the submitted documents. It shall conduct a background check on the industry standing of the applicant.
8. The process of accreditation shall include the examination and evaluation of corporate records/documents as well as inquiring into the reputation and performance of the company.
9. A Certificate of Accreditation (Exhibit 1) shall be issued to accredited shipping companies/shipowners/operators. It shall be approved and signed by the Regional Manager and shall remain valid unless canceled in the event of a default by the shipping company /contractor. Shipping companies/ ship owners/operators with negative performance /records may be blacklisted by the CVC upon the recommendation of the Provincial Office.
10. The CVC shall submit to the Central Office-DMO the list of accredited applicants for reference/information of top management and for dissemination to other Regional Offices.
11. Only accredited shipping companies / vessel owners / operators shall be qualified to enter into a voyage charter with the NFA.
12. Shipowners of Liner Vessels need not be accredited by NFA considering that liner vessels have specific/regular routes and uniform freight rates as authorized/approved by MARINA/Philippine Ports Authority.
B. DISPERSAL AUTHORITY
The dispersal authority shall be the basis of the source province for the movement of stocks.
C. CONDUCT OF CANVASS
1. Upon receipt of the official dispersal schedule of the Province, the Provincial Office shall conduct a canvass of offers/request for quotation from all NFA accredited vessel owners/operators operating in its area, following the format of Exhibit 2.
2. The Provincial Manager shall evaluate and prepare the summary of offers/quotations and recommend for the approval of the Regional Manager the most favorable freight rate offer/quotation.
3. Based on the approved freight rate, the Regional Manager shall also issue a Freight Rate Bulletin (Exhibit 3 ), which shall be the basis of the source province for hiring of vessel and payment of freight claim.
4. Approved freight rate for the same route shall be considered valid for three (3) months and can be utilized by the region /province as long as it is still applicable/acceptable to the accredited shipowners/operators and to the NFA. If the freight rate is not anymore applicable/acceptable to the ship owners/operators or if the market situation warrants a decrease in freight, the source province shall conduct a re-canvass of offers /request for quotation for new freight rate approval. In case an accredited ship owner / operator offers a lower rate than the existing approved freight rate, the source province shall conduct another re-canvass of freight rates to be used as the basis for the approval of a new freight rate.
5. If the contractor is represented only by an authorized person, he shall be required to submit a Special Power of Attorney (SPA) authorizing him to transact with the NFA and to sign all documents relative thereto.
6. Upon receipt of the Notice of Readiness (NOR) to load and transport the stocks, a team composed of the Port Operations staff together with the Quality Assurance Officer (QAO), shall conduct an inspection to check if the vessel holds/hatches are suitable in all respects to receive the cargo.
The vessel should be free from:
6.1 Live insects;
6.2 Objectionable odors, droppings, spillages or
residues of the previously transported cargoes;
6.3 Water;
6.4 Protruding objects which could damage the
container (e.g. nails); and
6.5 Water/oil Leakage.
The hatch covers should be in good condition and provided with
efficient gaskets and/or tarpaulin.
7. A vessel found not ready to receive cargo shall be rejected, and its Notice of Readiness shall not be accepted by the Port Operations Officer (POO) unless the defects are corrected and necessary repairs / fumigation have been carried out to put the condition of the vessel in good order. However, if vessel is not ready to receive the cargo within the laydays agreed upon in the voyage charter, the NFA - P.O. shall issue a written notice to the carrier that NFA has opted to cancel the carrier's vessel. If a substitute vessel shall be provided by a carrier, the substitute vessel should be available within the same laydays allowed for the original vessel.
D. LETTER OF AGREEMENT FOR VOYAGE CHARTER
1. The Provincial Office shall ensure that all documents pertaining to the vessel to be contracted are in good order and that the vessel is free from any encumbrances that may compromise NFA’s cargo.
2. Upon completion of inspection, signing of the Letter of Agreement for the Hiring of Vessel /Barge (Exhibit 4) shall be set by the source province with the vessel owner or his duly authorized representative and the NFA Regional Manager as the signing authority for the NFA.
3. If the supply situation of vessels in the area is tight, the Letter of Agreement may be executed between the NFA and the ship owner/ operator, even if the vessel is not at berth for inspection. However, the source province shall ensure that the vessel provided for loading is the same as the one specified in the voyage charter contract and pre-inspection was conducted prior to its loading.
C. INSURANCE
Insurance coverage of NFA cargo shall be secured by the NFA through the Special Project Office (SPO) for the account of NFA without prejudice to the obligations and liabilities of the carrier under the Letter of Agreement and applicable laws.
D. FREIGHT CLAIMS/PAYMENTS
1. Freight payments shall be based on the vessel intake of cargo at loadport, in bags of 50 kg and net of NFA claims for losses / damages conformed to by the vessel owner / contractor.
2. Payment of freight shall be made by the NFA Provincial Office which issued the stocks for shipment. Fifty percent (50%) of the freight shall be paid upon completion of loading and the remaining 50% shall be paid within thirty (30) calendar days upon NFA's receipt of the carrier's bill subject to completeness of NFA documentary requirements. If the carrier fails to submit the complete set of documents, the reckoning date shall be from the date the documents were completed.
3. Payment of losses / damaged stocks:
3.1 If the seal is broken / tampered, the contractor shall be liable for any shortage both in the number of bags and in weight. Payment shall be based on NFA’s replacement cost.
3.2 If the seal is not broken or tampered, the contractor shall only be liable as to the number of bags lost which may be accounted in the course of loading and unloading period wherein vessel hatches are not sealed. Payment shall be based on NFA’s consumer price.
4. Payment of losses shall be made through the following schemes, according to hereunder order of prioritization, depending on the amount vis-s-vis collectible freight from NFA:
4.1 Deduction from the freight claim voucher;
4.2 Cash payment; and
4.3 Payment-in-kind or replacement with good or better quality stocks of the same type and specifications based on NFA consumer price or replacement cost, whichever is applicable.
5. The following shall be required from the carrier for payment of freight claims :
5.1 Bill of Lading; and
5.2 Statement of Account/Bill/Invoice.
The above shall be submitted in three (3) copies, including the original, to the NFA Provincial Office for the voucher preparation by the Marketing Operations Unit.
6. Documents shall be verified by the NFA Provincial Office and shall be counterchecked for authenticity/ accuracy per records.
7. Two (2) copies of the following documents shall be attached to the voucher and shall be submitted to the NFA Provincial Accounting Section for processing and payment:
7.1 Bill of Lading
7.2 Statement of Account/Bill / Invoice
7.3 Letter of Agreement for The Hiring of Vessel / Barge
7.4 Abstract of Offers/Proposals
7.5 Certificate of Loading issued and signed by the NFA-PM
7.6. Unloading Report of receiving province indicating volume received, quantity damaged, etc.
Payment shall be released by the NFA Provincial Accounting Section in accordance with
NFA’s and Commission on Audit’s accounting and auditing rules and regulations.
E. ACCOUNTING TREATMENT
1.
To set-up accrual of freight expense:
DR: B-TCV-II-Inter-island Vessel xxx
CR: Acrued Expense Payable-Inter-island Vessel xxx
2.
To record dispersal of stocks (Issuing Province)
CR: ROCA/HOCA (at STC) (xxx)
DR: B-Operating expense-TCV-I
(Difference bet. STC &BV) xxx
CR: Items for Sale Inventory (at BV) xxx
3.
To record transfer-in ( Receiving Province)
a) Shortage/losses within tolerable allowance:
DR: Inventory Items for Sale (QTY. received x
STC of Issuing Province) xxx
DR: OE-Spillages / Losses ( within TOLA) xxx
CR: ROCA / HOCA xxx
b) If shortlanded stocks:
DR: Inventory Items for sale (Qty. received x STC) xxx
DR: OE-Spillages/Losses (TOLA) xxx
CR: ROCA/HOCA (Losses in excess of TOLA
chargeable to Issuing Province x STC) (xxx)
CR: ROCA/HOCA ( Total volume per WSI of
issuing province x STC ) xxx
4.
Upon payment of freight , shortlanded to be deducted from claims
( Issuing Province):
DR: Accrued Expense Payable (previous set - up) xxx
DR: B-TCV-II-Inter-island Vessel (Adjustment) (xxx)
CR: ROCA/HOCA (Shortage charged by
Receiving Province) xxx
CR: Misc. Income-Difference bet. RC & STC xxx
CR: Vouchers Payable xxx
DR: Vouchers Payable xxx
CR: Cash In Bank xxx
Accounting for Marine Damaged Stocks:
5.
Receiving Province - Upon receipt of stocks based on WSR:
DR: Items for Sale Inventory (at STC) xxx
CR: ROCA / HOCA xxx
To reclassify to Miscellaneous Inventory:
DR: Misc. Inventory - Damaged Stocks xxx
DR: Inventory Items for Sale (xxx)
6.
Upon Withdrawal by the GSIS:
CR: HOA (xxx)
CR: Miscellaneous Inventory-Damaged Stocks xxx
7.
Central Office Books - Upon Billing:
DR: Miscellaneous Receivable-GSIS xxx
CR: FOA xxx
8.
Upon Collection - C.O.
DR: Cash w/ Collecting Officer xxx
CR: FOA (Adjustment: Amount collected against set-up) (xxx)
CR: Miscellaneous Receivable - GSIS xxx
9.
Field Office Books - Upon receipt of Advice:
CR: HOA (xxx)
DR/CR: Losses/Income xxx xxx
H. REPORTING
The Regional Office shall submit to DMO on a monthly basis a Summary of Approved Freight Rates and Vessel Utilization Report following the prescribed format (Exhibit 5).
III. RESPONSIBILITIES
IV. FLOW CHART
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