July 31, 2018
With all the abbreviations and acronyms, yacht charter contracts can often seem a little confusing. But a charter agreement is actually relatively simple as its main purpose is to set out your rights as a charterer.
One of the most common terms you’ll see mentioned in your contract is the APA or Advance Provisioning Allowance. Designed to simplify the charter experience, the APA ensures that your onboard expenses are covered from the start.
Read on to discover everything you need to know about this useful arrangement and just how it works.
What is advanced provisioning allowance (APA)?
Advanced provisioning allowance (APA) is the extra fee that you pay in advance to cover the cost of provisions for your charter. The APA is paid on top of the charter fee. It helps to think of the advanced provisioning allowance as like opening a petty cash account for your captain and chef, because it's the simplest way of tracking charter expenses while you're on board.
What does APA cover?
The APA covers all the day-to-day operating expenses for your yacht charter. Everything from your food and fuel to port and customs fees. It also covers any special requirements or requests you might have while you’re onboard. The main costs to expect are:
Food and drink
Before your charter, your broker will send you a preference sheet so you can request all your favourite food and beverages. This will then be used to calculate your APA estimation.
Your fuel costs will depend on your itinerary and whether you choose to cruise or stay at anchor. Fuel costs will also be included for any toys and tenders you use during your charter.
Harbour fees and dockage
The harbour fees and dockage costs will also depend on where and when you want to charter. For example, you can expect to pay more for a berth in Monaco during Grand Prix week.
If you plan to use the Internet or the yacht’s satellite communications while you’re onboard, this will also be factored into the APA.
This doesn’t always apply. But if you board or disembark the yacht outside of her usual port, you may need to pay a delivery fee.
While the yacht laundry costs are included in the charter fee, to have personal items laundered you may need to pay extra.
How is APA calculated?
You’ll receive an APA estimation from your broker before you leave for your charter. As a general rule, the APA is calculated as a percentage of the charter fee.
Expect to pay between 20-25% if you’re chartering a sailing yacht and 30-35% for a motor yacht. Note: this can be higher for day charters and depending on multiple factors.
For example, it’s worth bearing in mind that your APA may be higher if you plan to spend your time island hopping. If you’re cruising more than 4 hours a day, you will need to cover that extra fuel consumption with your APA.
Where and when do you need to pay it?
The APA is due at the same time as your final charter payment, so roughly one month before you set sail. The transfer is made directly to the yacht captain. Your broker will provide all the necessary bank details ahead of time.
Who will handle the purchasing for the charter?
The captain will oversee all the purchases made before and during your charter. He will be responsible for ensuring the crew stay within budget and will provide receipts and expense accounts upon request. All expenses will be charged at cost and at the end of your charter you’ll receive an itemised breakdown of all expenditures.
What happens if the APA doesn’t cover all expenses?
Charter cost estimation is fairly accurate, but there’s always a chance that you might decide to blow the budget while at sea. Should your outgoings exceed the initial payment, you can top up the APA in cash while you’re onboard. The captain will keep you updated throughout the trip, and if there are any outstanding costs, you’ll need to settle up before disembarking.
What if we don’t use the full APA?
If there’s any credit remaining on the APA account at the end of the charter, the captain will issue a refund. You will receive the outstanding balance in cash before you leave the yacht.
Finally, does the APA apply to all charters?
When it comes to luxury yacht charter, the APA is usually applied as standard. Simple and straightforward, the APA is the easiest way to keep track of your outgoings while at sea.