Shipping Markets

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Shipping Markets Ship Operations

• Case Studies in Ship Operating
• Understanding beyond written words
• CK Sharma
• 29th November 2012
• Mumbai

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Force Majeure at BIK 1998 (page I)

• NGC hired an Ethylene vessel on Voyage Charter
  (ASBATANKVOY C/P) to load Ethylene from BIK to
  Far East.
• One day after tendering NOR at loadport, there
  was an explosion in the pipeline from Plant to
  the Port. Shippers/Charterers declared Force
  Majeure.
• Chartering Manager in Owners office kept the
  vessel waiting at BIK took 2 actions
• Asked the Charterers when the repairs are likely
  to be completed whether they would accept
  cancellation of CP.
• Asked the PI Club to give further advice in the
  matter.
• The MD for Asia in Ship Owning Co. ordered the
  vessel to be fixed elsewhere immediately but the
  Chartering Mgr protested asked Clubs
  intervention to give advice before fixing vsl
  elsewhere.

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Force Majeure at BIK 1998 (page II)

• The MD frowned, threatened to take action against
  the Chartering Mgr as a very good alternate
  business was lost.
• The Club strictly advised the Owners not to fix
  the vessel elsewhere until the CP with Iranians
  was formally cancelled.
• As the luck would have it, the Pipeline was
  repaired in 3 days and Charterers insisted the
  vessel to be placed for loading immediately as
  the Petrochemical plant had no space left in
  tanks to store Ethylene the Plant would shut
  down in absence of the vessel.
• Had the Owners employed the vessel elsewhere
  without cancelling the previous CP due to Force
  Majeure being declared, they would have faced a
  huge claim.
• MD thanked the Chartering Mgr for his insistence.

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Suitability of the vessel at the Ports The case
of mt CV Raman at Vizag

• In 1981/82 SCI had purchased a new vessel mt CV
  Raman (MR-I) being operated by a new Asstt. Mgr
  Operations.
• This vessel was doing regular voyages from Mumbai
  to Cochin with Crude Oil.
• Suddenly, the Ministry (OCC) ordered SCI to send
  this vessel to Vizag with full load of Crude
  which was desperately needed by HPC Refinery.
• The action was taken very promptly and vessel was
  sent at full speed.
• On arrival the Harbour Master refused to berth
  her as it was discovered that her beam was 10
  inches more than max allowed at
  Vizag.!!!!!!!!!!

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Bunkers as per C/P

• Chartering Managers often do not give much
  importance to Bunker Clause in C/Ps. In hands of
  a cunning Owner it can be a deadly weapon.
• In a coastal voyage from ECI to WCI a Clause was
  agreed mainly as under
• Charterers to redeliver the vessel with same
  quantity bunkers as on delivery. Bunkers to be
  supplied from an a reputed Supplier such as
  Chevron/Texaco/Shell etc.
• Vessel loaded at Vizag where the only supplier of
  bunkers is IOC. Owner refused to take bunkers.
• Upon completion discharge at an anchorage point
  in WCI, where bunker supply is not possible, the
  Owner invoked the bunker clause and refused to
  accept redelivery of the vessel till bunkers were
  supplied OR Charterers to pay full ballast cost
  up to Fujairah.

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Bunkers as per C/P

• Charterers advisor saved the situation by issuing
  message with following points
• The C/P provided for a reputed supplier like
  Chevron/Texaco/Shell, etc
• Indian Oil is covered under ETC.
• Indian Oil is a fortune 500 company and has
  supplied bunkers to millions of vessel calls in
  Indian Coast. Therefore, IOC is equivalent to
  Chevron/Texaco/BP, etc for the bunker to be
  supplied.
• Chevron/Texaco/Shell have never supplied bunkers
  at Indian Coast nor are likely to supply in
  foreseeable future. This makes the contract
  condition impossible to perform, thereby VOID as
  per English Law.
• Owners withdrew the case and settled amicably.

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Cargo discharge at wrong disport - 1

• Owner protecting unscrupulous Operator
• A Dubai Operator Hired a vessel from a reputed
  Owner loaded Containers from Bombay for Umm
  Quasar from 5 shippers for carrying project
  cargoes. He got extra set of OBLs prepared at
  loadport showing Dubai as disport. Agent was
  unaware of the purpose was conned.
• Cargo was discharged in Bandar Abbas vessel
  returned to Head Owners showing the fake
  documents to Owners.
• Then the Operator asked the Shippers to pay
  freight again for reaching the cargo to Umm
  Quasar.
• Some of the Shippers paid the freight again but
  one of them went tough.

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Cargo discharge at wrong disport - 2

• This Shipper went to Bandar Abbas and hired a
  vessel to ship the cargo himself to Umm Quasar.
  Then filed a case against the Head Owner for all
  costs.
• Head Owners fearing difficulty, changed the name
  of the vessel and stopped her trading in India.
• Shipper got the vessel arrested at Singapore
  Anchorage during her bunkering obtained PI
  Clubs Guarantee.
• Head Owner contested the case on the strength of
  documents given by the Operator.
• The Operator closed his shop in Sharjah and
  disappeared.
• Head Owner lost the case had to pay up full
  costs including legal costs to the Shipper.

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Declaring Option before time

• A VLCC was Chartered by Oil Industry to transport
  Crude from PG to WCI with Charterers option to
  discharge at Mumbai Lighterage point or at
  Vadinar declarable latest passing Quoin Island
  after loading.
• The concerned company officer declared the
  disport as Vadinar when loading had just
  commenced based on old information.
• But later there was a need to send the vessel to
  Mumbai. The Charterers advised the Owner before
  reaching Quoin Island that the vessel is required
  at Mumbai.
• Owner refused saying that there no provision for
  multiple declaration of disport option.
  Charterers had no choice but to pay USD 50,000
  demanded by Owners to bring the vessel to Mumbai.

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The case of 6 hrs after NOR

• The Buyers in Mumbai were importing Chemicals
  from well known Japanese Traders. The receivers
  always had an agreed Laycan for discharging. The
  governing C/P was ASBATANKVOY which provides for
  6 hours free time before laytime starts counting.
• Very often the vessels were arriving before
  commencement of laycan and would tender NOR on
  arrival.
• The Traders would start counting laytime from
  0001 hrs on the date of commencement of laycan
  Receivers were happily paying Demurrage based on
  same for years.
• New Chartering Manager insisted that the NOR can
  validly be tendered at Mumbai only on
  commencement of laycan and Buyers had right to
  have 6 hours Free Time before the laytime
  starts counting.
• Traders protested saying that they have been
  getting this for last many years but ultimately
  agreed to giving 6 hours free time.
• Buyers gained a lot of permanent savings on
  Demurrage incidence.

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Reducing Demurrage Incidence

• About 300,000 mts of Ethylene was being imported
  on CF basis by a Company via Hazira in 1991.
• The sources of loading were Venezuela, Med, PG.
• It was impossible to control arrival date of
  ships as the time taken on long voyages was
  variable.
• The discharge was by ship to ship transfer at
  Hazira where only about 2,000 tons could be
  unloaded in a day due to the tidal conditions in
  the port.
• There was often a bunching of vessels at Hazira
  which resulted in huge demurrages.
• The New Chartering Manager changed the situation
  by altering buying pattern to FOB basis for
  cargoes ex PG. This resulted in taking control of
  the Shipping part for short voyages (4 days) and
  vessels were loaded keeping in mind the open
  Lighterage windows at Hazira.
• The demurrage incidence was reduced to USD 0.5
  Million as against USD 4.0 million.

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Golden Kiku

• A case of Part II of Gencon C/P
• The vessel was fixed to load Iron Ore from ECI to
  China under Gencon 94 C/P.
• At Chinese Discharge Port, pilot Anchored at a
  safe place during river transit for 8 hours due
  to fog.
• Charterers raised Despatch claim of USD 3000/-
  deducting Shifting time from Anchorage to Berth.
• On deep scrutiny of Line 115 of Part II of Gencon
  CP it was revealed that the wording is MOVING
  TIME from anchorage to berth will not count as
  used laytime. Therefore, 8 hours of time lost
  waiting at a place en-route from Anchorage to
  berth was used laytime.
• Owners denied Charterers claim and counter
  claimed USD 15,000 Demurrage invoking line 115 of
  the Gencon Part II. This was paid by Charterers
  without protest.

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