Shipping Markets Ship Operations Case Studies in Ship

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Shipping Markets & Ship Operations Case Studies in Ship Operating Understanding beyond written words

Shipping Markets & Ship Operations Case Studies in Ship Operating Understanding beyond written words CK Sharma 29 th November 2012 Mumbai

Force Majeure at BIK – 1998 (page I) § § § NGC hired an

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: 1. 2. § Asked the Charterers when the repairs are likely to be completed & whether they would accept cancellation of CP. Asked the P&I 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 Club’s intervention to give advice before fixing vsl elsewhere.

Force Majeure at BIK – 1998 (page II) § § § The MD frowned,

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.

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

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…………. !!!!!

Bunkers as per C/P § § Chartering Managers often do not give much importance

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.

Bunkers as per C/P § Charterers advisor saved the situation by issuing message with

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.

Cargo discharge at wrong disport - 1 § Owner protecting unscrupulous Operator: § §

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.

Cargo discharge at wrong disport - 2 § § § This Shipper went to

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 P&I Club’s 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.

Declaring Option before time § § A VLCC was Chartered by Oil Industry to

Declaring Option before time § § A VLCC was Chartered by Oil Industry to transport Crude from PG to WCI with Charterer’s 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.

The case of 6 hrs after “NOR” § § § The Buyers in Mumbai

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 00: 01 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.

Reducing Demurrage Incidence § § § § About 300, 000 mts of Ethylene was

Reducing Demurrage Incidence § § § § About 300, 000 mts of Ethylene was being imported on C&F 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.

Golden Kiku § A case of Part II of Gencon C/P: § § §

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 enroute 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.