lloyds list

journal of commece

fairplay

Trade winds
Chapter 2:
1. Pipelines are prone to problems which are: (1) Vulnerability to attack
(2) Damage at one point will affect the whole line (3) Increased
handling of oil, number of pumping stations en route (4) Low capacity
thereby requiring storage at each end (5) Fees charged on transit (6)
The above points lead to increased cost of transport.

P14

2. Crude oil types (1) Heavy and light (2) Sweet and sour( by the
quantity of hydrogen sulphide it contains, large amounts of H2S
would make a crude sour, little H2S is a sweet crude) (3) Yellow and
black in colour.

P15

3. Three classifications are used with respect to crude (1) Asphalt-base,

often high in sulphur nigrogen and oxygen contain little paraffin, used
for making gasoline and asphalt (2) Paraffin based, crudes high in
paraffin wax, can be refined into motor fuels, lube oil and kerosene (3)
Mixed based, crudes which have some asphalt as well as paraffin may
be refined into all products

P15

4. Upon discharging the tanker usually pumps the crude into storage
where it may be left to allow water to separate and be drawn off. This
process may also have been carried out prior to loading. P16
5. We need only look at whether the products is clean or dirty, which are
sometimes referred to as white oils or black oils.
6. LPG ( Liquid Petroleum Gases): separated in distillation process,
consists of propane, iso-butane and normal butane.

Light Gasoline: quality varies depending on crude oil source

Naphtha: mainly used as feedstocks for production of high quality
motor gasolines blending components also petroleum chemical
feedstock.
Kerosene: main use Aviation Turbine Kerosene fuel( ATK) with
smaller useage as burning kerosene and fuel oil dilutant.
Diesel Fuel: residue of distillation of crude oil at atmospheric
pressure, this would itself distil above temperatures of about 350C.
Major component of fuel oil blends-or maybe further distilled at lower
pressures- vacuum distillation- avoid thermal degredation.

P17

Chapter 3
7. ULCC: 300,000 dwt+ 2million bbls+
VLCC: 200/300,000 dwt

1.4/2 million bbls

Suezmax: 130/170,000 dwt

0.7/1 million bbls

Aframax: 70/120,000 dwt

0.5 million bbls/+

Panamax: 50/70,000 dwt

Handy: 30/50,000 dwt

Cargoes are traded in lots of 500,000 bbls so knowing the barrel

capacity of a particular tanker is useful.
8. Deep offshore loading/discharging facilities: lightening areas/zones,
single buoy moorings(SBMs) or single point moorings(SPMs).
9. Crude oil carriers have a number of important features
(1) Machinery and accommodation aft

(2) Cargo section divided by 2 longitudinal (fore+aft) bulkheads and

with transverse (athwartship) bulkheads creating cargo tanks
(3) On modern tankers certain tanks set aside as Clean Ballast or
Segregated Ballast Tanks. To reduce the chances of pollution
through dirty ballast water as well as allowing simultaneous ballast
water and cargo handling.
(4) Straightforward pump and pipeline system, 2 or 3 cargo pumps,
some older designs have Freeflow where oil tight sluices are
fitted in the after bulkhead of each tank so the cargo can run aft to
be pumped from the suction of an after tank.
(5) High capacity cargo pumps fitted in pumproom aft of cargo
section, forward of engine room forming part of the cofferdam
(6) Slop tanks adjacent to pumproom
(7) Tank venting system with pressure/vacuum valves fitted may be a
common line on older vessels or independent for each tank on
modern designs.
(8) Inert Gas System (IGS) a requirement for crude oil tankers over
100,000 dwt since 1975 and now required for all tankers.
(9) Cargo control room, remote control of valves, pumps and
ullage/sounding monitoring.
(10)

Fixed tank cleaning system, high pressure nozzles for Crude

Oil Washing( COW) and water washing tanks when empty.

(11)

Fixed fir fighting system

(12)

Air conditioned accommodation

(13)

Not fitted with heating coils

(14)

Cargo tanks not coated

10.Dirty products carried on Suezmax and smaller-usually needs heating

to keep it in a pumpable condition. Some heavy crudes need heating
so they will be carried on Suemaxes and smaller.
11. Fuel Oil needs to be at a minimum temperature of 57.2C ( 135F) for
pumping. Around 165F is usually the maximum permitted
temperature.
12. Product carrier regulation:
(1) accommodation and machinery aft
(2) cargo section divided by 2 longitudinal bulkheads and a number of
transverse bulkheads perhaps as many as 11 tanks fore and aft
(3) cargo tanks coated to control corrosion and assist in tank cleaning.
Great care is taken at the design stage to reduce the number of internal
structures within each tank
(4) segregated ballast tank system fitted
(5) Each tank fitted with independent pressure/vacuum venting system
(6) vessel capable of closed loading
(7) cargo heating system
(8) fixed tank cleaning system
(9) inert gas system
(10) no direct access from main deck to accommodation

(11) air conditioned accommodation so there is no need to open

doors/port holes to ventilate

P25

13. Modern product carriers must be fitted with Segregated Ballast

Tanks( SBT) to keep the cargo and ballast segregated in tanks, lines
and pumps.

P25

14. A vessel which is fitted with Clean Ballast Tanks( CBT), in this
configuration the ballast tanks will only ever carry clean ballast water
but the lines and pumps used will also be used for cargo so there is a
slightly higher chance of ballast water being contaminated with cargo
residues from the lines and pumps.

P25

15. Ore/bulk/oil- OBO may carry crude oil, petroleum products, grain,
coal or iron ore P31
16. OBO features
(1) Cargo spaces designed to carry wet or dry cargoes
(2) Cargo pipelines fitted in the duct keel
(3) Cargo pump room fitted between machinery space and aft cargo
space
(4) Inert gas system fitted
(5) Tank cleaning system must not interfere with loading/discharging
equipment for dry cargoes
(6) Heating coils will be removed from tank top and stored under
hatch cover or other accessible safe location
(7) Vapour lines fitted to each oil cargo space with pressure/vacuum
valves

(8) Segregated ballast tanks fitted

(9) Designed with double bottoms
(10)

Designed for alternate hold loading when carrying ores

P32
17. Ballast spaces in double hull tankers have surface areas 250% greater
than those in single hull ships
18. Double hull tankers features:
(1) Ballast tank coatings standards and suitable access arrangements to
carry out inspections are critical
(2) Proper application procedure of paint system maintenance will
ensure that steel replacement over the life of the ship is minimized.
(3) Light coloured ballast tank paint systems have proved effective in
facilitating inspections
(4) Cargo tank corrosion has proved to be more of a problem. Smooth
cargo tank surfaces were expected to result in less pitting but the
opposite has been the case. Several double hull tankers have
experienced pitting corrosion on the inner hull, although not
widespread the intensity of the corrosion in the reported cases has
prompted vigorous industry investigation. Theories includepresence of mill scale, use of certain types of steel, water dropout
from the sour crudes, possibility of sulphur producing bacteria
thriving in the cargo spaces of double hull tankers due to the benign
temperatures in the cargo tanks caused by the thermos effect of the
double hull. Coating of the horizontal surfaces in the cargo tanks
particularly the inner bottom plating.

(5) Adequate intact stability rules had to be introduced.

(6) Raking damage could lead to the capsize of double hull tankers so
in 1992 IMO introduced raking bottom damage criterion to the
MARPOL convention.

P34

19. Tanker equipment

(1) Crude oil washing (COW): the initial step of the tank cleaning
process is COW whereby after discharge has commenced a small
percentage (perhaps 10%).

P35

PS: the recirculation of the cargo reduces the discharge rate

achievable so extra time should be allowed in the charter party for the
pumping warranty typically 8-12 hours depending on ship size and the
number of tanks to be washed.
Washing with hot water is particular hazardous.
The oxygen content of the tank should be kept below 8% ( inject
inert gas). So vessel must be fitted with a inert gas system( IGS).
(2) Inert gas system: tanks will be kept inerted at all times

P36

Closed loading is a requirement at many ports whereby the venting

of hydrocarbon vapours is prohibited during the loading and
ballasting procedures.
(3) Load on top

P37

The arrival ballast tanks will be washed with sea water and
carefully stripped. The oily water will be transferred into the slop
tanks. The chartering department should be alert to the benefit of
discharging these slops whenever the occasion arises. Disposal of
slops ashore usually costs the owner money so if a charterer can

load on top of slops these will comingle and be discharged. Under

these circumstances the charterer will pay freight on slops( a few
cents per ton) and have more oil to refine. (new cargoes are now
loaded on top of all contaminated ballast and washings which are
later treated ashore at special installations)
(4) Pipelines

P37

Modern tankers are usually fitted with a direct pipeline system, the
tanks will be divided into groups with a different pump and line for
each.
Each tank will be fitted with a deepwell pump which only operates
in the one tank, through a dedicated line to the manifold.
A master valve is fitted where the bottom piping passes through
each tank which enables each tank to be isolated from the others in
its group.
(5) Stripping P39
Many tankers will have a separate system for removing the last few
barrels of oil out of the tank. Stripping systems are fitted with
smaller pumps and lines which could be rotary, reciprocating or
educators.
(6) Valves

P40

Gate valves are dependable and durable but occupy a great deal of
space. It could move the gate from fully open to fully closed.
Butterfly valves
(7) Pumps

P40

check valves

relief valves

Tankers are designed to discharge their cargoes in 24 hours, it

follows that larger ships will have high capacity pumps and smaller
ships can operate with lower capacity.
Centrifugal being the largest capacity, reciprocal being lower and
screw pumps perhaps the lowest.
Cargo pumps will be placed as near as practicable to the bottom of
the cargo tanks.
Deep Well Pumps are dedicated pumps for each tan so they will not
be fitted in a pumproom.
The pump and pipeline are dedicated to one tank which is
connected to its own manifold connection, thereby eliminating the
risk of pump and pipeline contamination of cargo from residues of
another tank.

Chapter 4
20. Subject stem:

P53

21.Subject shippers approval and subject receivers approval are selfevident, the charterers will need to check with shippers and
receivers(if know) that the vessel is acceptable at their respective
terminals.
22. Under UK law, a contract is made once all the points are agreed by
both parties, if there is still one point outstanding, even a minor point,
there is no binding contract

23.

P56

24. FOB: the buyer will be chartering the vessel, the shippers
responsibility is to supply the cargo within the agreed dates at the load
berth. The majority of the risk for the voyage is therefore transferred
to the buyer of the cargo.

P57

25. Selling CIF means that the responsibility rests with the seller until the
cargo crosses the ships rail at the discharge port. Thus the operational
aspects of the voyage, the voyage orders, cargo nomination,
demurrage, etc are dealt with by the seller.
26. Under worldscale terms the charterers will pay a fixed differential.
P57
27. Within the lumpsum owners will need to specify the number of load
and discharge ports, as well as the rotation of calling at the ports and,
for estimating purposes, take the ship on the longest voyage possible.
P57
28. The date of the charter party is the date that all subjects are lifted and
all terms are agreed. P57
Chapter 5
29. Worldscale is a schedule of freight rates applying to tankers carrying
oil in bulk.
30. Tanker broker company: clarksons, galbraiths, Gibson, braemar and
seascope shipping (London), poten, odin, seabrokers, McQuillings,
M.J.K., and Charles Webber( NYC)

31. Rates are regularly provided for voyages involving up to 3 loading

ports and up to 8 discharging ports but no limit is imposed as to the
number of ports for a voyage.
32. Trans-shipment are: the place which is miles off the coast, where
large ships transfer all or part of their cargo to smaller vessels.
Worldscale includes a supplement of rates involving such places.
33.The schedule contains a list of demurrage rates covering vessels of
between 15,000 and 50,000 tonnes dwt and 29 size ranges. Therefore
it is a simple matter to establish the demurrage rate to apply under a
charter party by agreeing a percentage adjustment to the worldscale
demurrage rate-typically the same percentage as the agreed freight,
but this is more a matter of negotiation.

But they are usually agreed

as a dollar per day rate of demurrage.

34. Another advantage of the Worldscale system is that comparision of
fixtures in different trades ( assuming sililar voyage lengths) can
readily be made.
35. Worldscale

WS

P68

36. Tonne= metric ton=1000KG

37. All rate calculations are for a full cargo for the standard vessel for a
round voyage commencing from the first, or only, load port to
discharging port, or ports, and returning to the first load port. P68
38. WS P68
39. Notes on calculations

p69

(1) It is assumed that the standard vessel can navigate the selected
route to reach and load or discharge at the selected ports
(2) Bunkers are deemed to be available at every port at the price
stated above and for the purpose of calculating the cargo quantity
it is assumed that the vessel will bunker for 50% of the voyage at
the first load port.
(3) Port time mentioned above, 4 days, includes the 72 hours laytime
(4) Rates are calculated for voyages with ports in whatever order is
requested even if that is not in geographical rotation
(5) No allowance is made for any tax on freight or income tax and no
provision is made as to whether these are for owners or
charterers account
(6) No allowance is made for any additional insurance premiums
which may be incurred for trading to certain areas
40. Except as otherwise explained, the route used for a rate shown in the
schedule is that which produces the lowest rate for the voyage in
question at WS100. WS
.
41. When assessing port costs for the standard vessel, certain assumptions
are made including: vessel proceeds direct to berth, any time related
costs are based on 48 hours, allowances for costs based on quantity of
cargo loaded or discharged is based upon full cargo, no matter how
many load/discharge ports are involved. Cost items which are assessed
as single trip or multi trip are based on single trip, deballasting
costs at certain nominated ports. No allowance for costs that would
not normally be incurred by a standard vessel. No allowance is made

for items or surcharges that are incurred at certain times of the year.
P71
42. WS the ws flat rate effective is that
as at date of charter party to apply

P71

43. Places other than those listed in WS may be designated as TSA and
rates involving these as SOLEload/discharge places are available
from the associations and will be regarded as official rates. However
where such unlisted areas involve PARTIAL load or discharge these
will be regarded as special rates and their use will be dependant upon
agreement between the contracting parties.---- worldscale Hours
Terms Conditions and Special Rates to apply
44. Terms

P71

P72

(1) Effective date: loading commencing on or after 1st January each

year
(2) Laytime: 72 hours and shall be subject to any conditions stated in
charter party
(3) Port and terminal combinations: simply put a list of ports in certain
geographical areas, which are regarded as berths within a single
port for demurrage and laytime purposes. Worldscale has no
terms and conditions relating to shifting costs---these will be
settled as dictated by the terms of the governing charter party
(4) Owners account: dues and other charges which are levied upon or
against the vessel, even when assessed on the quantity of cargo
loaded or discharged, shall be paid by owners and be for owners
account.

(5) Charterers account: dues and /or other charges which are levied
upon or against the cargo shall be paid by charterers and shall be
for charterers account.
45. If the vessel is fixed at WS50 then the demurrage rate applicable
would be 50% of the rate listed

P73

46. Fixed rate differentials: there are differentials, stated in US$ per tone
or perhaps per GT, to be included as part of the freight payment, as a
fixed amount, in respect of costs incurred, by owners. Typically fixed
differentials apply to canal transits, seaway transits, tonnage dues
assessed on the quantity of cargo loaded or discharged, way leave
charges, conservancy dues and oil pollution insurance.

P7

47. Variable rate differentials: the amount paid is varied according to the
WS rate agreed. In practice the variable differential will be added, or
subtracted, to the flat rate before the cost per tone is calculated. P74

48. They are unique in being the only assessments of their kind to be
recognised by taxation authorities as an acceptable method of charging
freight between affiliated companies of multi-national groups. AFRA
results are also used by oil traders and government agencies to assess
the freight element in various types of oil sale agreements.
AFRA: an average cost per tone in a given month or a given voyage,
for vessels of different sizes. P77
The monthly rates are calculated from the 16th of one month
through to the 15th of the following month inclusive and are the average
cost of commercially chartered tonnage employed in international
transportation of oil during the given period.

http://wiki.answers.com/Q/What_are_average_freight_rates_assessment
49. Rules to help you carry out a voyage estimate

P80

(1) Use the same estimate form

(2) Be neat, for easy checking
(3) Be accurate/logical and check calculations
(4) File estimates for easy reference
(5) Build up a file of port costs
50. (1) Capital costs are incurred by the owner whether or not the ship is
trading. These are the cost of the vessel plus any charges
(2) Operating costs include crew costs, stores, H&M insurance, P&I,
survey/dry dock repair, maintenance, management, and marketing.
These costs are incurred when the vessel is trading, but regardless of
whether or not the vessel is employed.
(3) Voyage costs are those which are incurred to carry out the voyage
in question, such as bunkers, tank preparation, port charges, canal
dues, heating, the cost of fuel for driving the pumps whilst
discharging, and sometimes insurances costs. These insurance costs
are those relating to the particular voyage such as breaking Institute
Warranty Limits(IWL) or calling at a war risk area ( in practice it is
not necessary to include the operating costs in a voyage estimate when
we are calculating the time charter equivalent)
51. Concept

P84-P91

P83

(1) Vessel specifications: details of the vessel such as name, speed,

consumptions at sea, in port and heating consumption and for some
voyages draft and TPC may be required

p84

(2) Cargo details: details of the cargo either dead-weight or volume

(3) Voyage legs: each leg of the voyage is entered with the
mileage( but the distances from WS book are the round voyage
distances). Having obtained the distances you should consider
whether allowance needs to be made.
(4) Bunkering port: (1) heating may involve maintaining the cargo at
its loaded temperature or upgrading the cargo from the loaded to its
required discharge temperature, it could involve heavy
consumption of fuel oil as well as perhaps some time at the
discharge port while the vessel upgrades the cargo temperature. (2)
In certain trades, time may be required for cleaning between
discharging one cargo and loading the next in order to prepare the
tanks for the next intended cargo to avoid contamination ( e.g.
white oils). (3) canal transit and anticipated waiting time needs to
be allowed for, together with the relevant consumptions ( laytime
does not run during the transit)

for tankers, the laytime will be

72h plus 6h notice of readiness at each port.

(5) Cargo calculations

p85

FWA: fresh water allowance, typically on a 60,000 tonne tanker the

FWA could be approximately 275mm.
BWA: brackish water allowance
BWA mm= FWA*((1025-D)/25)

(6) Bunkers: typically, tankers load at oil producing and/ or refining

ports where bunker prices are low enough to bunker for the round
voyage but if the vessel needs to bunker elsewhere the costs,
including deviation and port costs, must be included. Operation
department

p87

(7) Port disbursements; distinguish voyage cost and running cost; the
owner may protect himself by assuming a cost and stipulating this
as a maximum for owners account when offering

p88

(8) Insurance and crew expenses: (1) 3 types of additional insurance

premium which could be incurred for a voyage. Firstly, should a
vessel be required to break the Institute Warranty Limits(IWL)
possibly to enter the St Lawrence Seaway or the Baltic Sea in
winter time; secondly, war risk additional premium and finally
additional premium due to vessels age, flag or class. (2) if the
vessel enters an excluded area a check must be made with the
underwriters to establish the levels of additional premium before
proceeding.

P88

(9) Lump sum rate: there are a number of trades which do not use
worldscale freight rate, at this time, the calculation for the lump
sum rate needs to allow for the longest distance between the ports
that will be used together with the highest port expenses, and
should charterers need to option to load or discharge at more than
one port, such allowances must be included in the voyage estimate
before a firm offer is made. P91
If more than one port is to be involved at load or discharge
allowance needs to be made not only for the additional

disbursements but the deviation incurred in calling at the second

port.

P91
Chapter 7

52. Bareboat(demise) charters: the charterer manages and operates the

ship both technically and commercially. The charterer( disponent
owner) is responsible for crewing, managing and employing the ship.
P95
53. Time charter: the owner earns hire from which he pays his operating
cost whilst the charterer is responsible for the voyage costs. It is quite
likely that the charterer will re-let the ship at some stage during a
timecharter and is then the disponent owner. It is essential to ensure
that, regardless of the number of sub-charterers there may be, the first
charterer, remains responsible to the owner for the payment of hire
and operation of the vessel.

P96

54. Voyage charters: one or more load ports to one or more discharge
ports.

The owner will be paid freight either calculated per tonne of

cargo loaded or a lumpsum.

Charterers could favour the lumpsum

freight where they are not certain as to the exact quantity of cargo they
are likely to load.

The freight is paid at the discharge port.

The shipowner is responsible for the operating costs and voyage

expenses which are paid prior to receiving the freight

P97

55. The voyages will be considered as separate entities for the calculation
of freight and laytime but the owner may need to incorporate a clause
to cover bunker price escalation or additional insurance costs such as
war risk premium during the agreed period. The laycan for the second
and subsequent voyage may be based upon the vessels service speed

from the previous discharge port with an allowance for bad weather.
P98
56. Contracts of affreightment( COA): the agreement is unlikely to name
a ship.

P98

57. Parcel tankers, having the ability to carry many small parcels ,are
frequently carrying cargoes that are fixed under different charter party
contracts.

P99

58. Under UK law, the vessel may tender its notice of readiness prior to
the commencing date without charterers prior consent.
P102( laydays B)
59. Typically there will be given as a range of ports, such ranges will
often include 2 named ports at the extremities of the range-ensure that
it is clear whether or not these ports are to be included as an option
any excluded ports should be stipulated. P102( discharge port )
60. The cargo description should cover quantity, type, number of grades
and heating requirement

P102(cargo E)

61. If co-mingling is not possible then the ship has to shut out the
additional cargo because it cannot segregate within the tanks on board.
The charterer will be liable for any deadfreight that results from such
as a shut out. The grades will normally be described as loaded within
vessels natural segregation (WVNS). In the products trade this will
be taken to mean double valve segregation with independent lines and
pumps for each grade to prevent contamination.

P103( number

of grades)
62. The maximum loaded temperature of 160F or 165F is often agreed.
P104

63. If the freight is based on a minimum quantity provision will usually

be made for the charterer to pay 50% of the freight on the quantity of
cargo loaded in excess on the minimum called for.

P104

64. In the petrochemical trades, 72 hours is most common but some

charterers insisting on 96 hours argueing that the most common
demurrage claim is for less than 24 hours.
Worldscale laytime is 72hours

P105

65. Demurrage: dollars per day or pro rate!! pro

rata.
66. Under worldscale there are voyages where a fixed differential is paid
by charterers which is intended to reimburse the owner for actual costs
of transiting the canal.
transits

BROKER deviation cannal

P106

67. Tovalop:().
ITOPF: international tanker owners pollution federation, so we should
confirm vessesls membership of ITOPF

P106

68. Freight: no deduction of freight shall be made for water and/ or

sediment contained in the cargo.

P106

No freight is earned until the cargo is delivered

Owner may insert freight payable before breaking bulkfreight
BBB clause
69. Charterers liability for deadfreight will be limited by the agreement
of a minimum quantity as stated in the case description in Part 1E and

insertion of No Deadfrieght for Charterers Account Provided

Minimum Quantity SuppliedNDFCAPMQS

P107

70. The charterer shall have the option of cancelling the charter by giving
the owner 24 hours notice 24hours after such cancellation date:
otherwise the charter remains in full force and effect.

P107

71. Laytime shall commence upon expiration of 6 hours after receipt of

such notice, or upon the vessels arrival in berth.
72. When delay is caused to a vessel arriving at a berth after giving after
giving notice of readiness for any reason over which the charterer has
no control, such delay shall not count as used laytime.

P108

73. Any delay caused by the ship shall not count in laytime. Time spent
shifting in and out of first berth is not to count as laytime but any
subsequent shifting for additional berthing operations is for charters
account.

P108

74. Laytime P108

Time spent ballasting/ deballasting does not count as laytime
Any time lost through breakdown or inefficiency is not to count as
laytimethe pumping warranty also bears upon this subject.
If the port or ship prohibits night loading, such time is not to count as
laytime, but note this is not the same issue as berthing at night
75. Demurrage

P108

the rate of demurrage shall be reduced by one half of the

amount stated in part 1.

The charterer shall not be liable for any demurrage for delay caused
by strike, lockout, stoppage or restraint of labour for master, officers
and crew of the vessel, tugboat or pilots.
76. Pumping: this clause states that the cargo is to be loaded at charterers
expense and discharged at owners expense, the owner being
responsible for cargo up to the ships rail.

P109

77. When sea terminals are used the ship is to provide the hoses which at
other places would be provided by charterers.
78. Time lost at a port due to quarantine restriction will only count as
laytime if the quarantine restrictions were known before the start of
the voyage..
79. The vessel is not responsible for any cargo damage unless it was
caused by (1) lack of seaworthiness discoverable by due diligence at
the time of loading or the inception of the voyage (2) error or fault of
the servants of the owner in the loading care or discharge of the cargo.
P110
80. Any time lost due to faults in the IG system not to count as laytime.
P111
81. war clause

the additional insurance premium, at the

insured value of the hull will be paid by the charterer.

82. Reloading---- there is no allowance for freight to be paid so this
clause gives the charterer the possibility of moving a cargo cheaply.
P111
83. Exception clause: the master and owner shall not be responsible for
loss or damage to the cargo resulting from: any act or default of the

master or servants of the owner in the navigation or management of

the vessel; fire unless caused by the personal design or neglect of the
owner; collision, stranding or peril of the sea or navigable waters; or
from explosion, bursting of boilers or latent defects in hull equipment
or machinery

P112

84. Owner charter any loss or damage or delay or failure

in performing arising from: act of God; act of war; perils of the sea;
act of public enemies; strike or lockout; or riot or civil commotion..
P112
85. Sublet: ports cargo type, remain unaltered P113
86. Overage: any additional premium for cargo insurance incurred due to
vessels age is to be for owners account. This clause is usually
amended to limit the maximum premium payable by owners and that
same should be payable against presentation of proper documentation.
P113
87. Clean seas clause: the charterers shall pay freight on any slops which
are carried, up to 1% of the vessels deadweight. The charterer will
also pay deadfreight if he does not want to cargo loaded on top of the
slops.
Chapter 9
88. Tanker charter party (1) letter of indemnity (2) cargo
retention (3) in-transit loss clause (4) pumping warranty (5) speed up
(6) war risk premium (7) additional premium (8) cleaning (9) load on
top (10) clean ballast (11) black list (12) Conoco weather clause (13)
Exxon drug and alcohol abuse policy (14) additional oil pollution (15)
charter party administration clause

p129

89. Letter of indemnity: the vessel will have to commence discharge

before the original bills of lading arrive at the discharge port. So
charterers issue a letter of indemnity. So the owners broker must
ensure that the charter party includes the provision that, in the event
that the original bills of lading are not available at the discharge port,
or if the destination stated on the B/L is different to where the cargo is
being discharged, charterers will issue a letter of indemnity in
accordance with owners P&I CLUB wording signed by themselves
and countersigned by a first class bank. Letter of indemnity should be
countersigned by the consignee, or receiver, named in the B/L
No maximum monetary limit should be inserted in the LOI. No time
limit for the validity of the LOI should be inserted.

P130

90. Cargo retention: crude oil contains a lot of sediment and foreign
matter in suspension during loading, that is not liquid. In the clean
trades we can readily understand that the residues of cargoes are
liquid.
In cases where freight is payable BBB the cargo retention clause
should be amended to read claim against freight rather than deduct
from freight.

P131

91. In-transit loss clause: in transit loss not to exceed 0.5% of the bill of
lading quantity.

P133

92. Reduced speed means that the operating speed is less than the service
speed recorded in Lloyds register.
Speed-up clause gives the charterer the right to instruct the vessel to
speed-up, the vessel will consume more bunkers at the higher speed

and the owners should be compensated for the additional expense.

P135
93. Load on top: SLOPS

P138

94. Conoco weather clause: delays in berthing for loading and

discharging and any delays after berthing which are due to weather
conditions shall count as one half laytime or, if on demurrage, at one
halp demurrage rate.

P139

Chapter 10
95. Demurrage is paid by the charterer to the shipowner and is paid by
the shippers and receivers to the charterer.
96. 4 stages to the laytime calculation (1) commencement of laytime (2)
duration of available laytime (3) interruptions to laytime (4)
calculation of demurrage
97. Laytime is triggered by tendering a valid NOR.
98. Under the majority of tanker charter party forms, if the vessel anchors
because the berth is occupied, time starts 6 hours after NOR, whereas
if the vessel proceeds directly to the berth without any waiting time,
time will start on berthing or on commencement of loading or
discharging, depending on the charter party form.

P150

99.In practice, without anything to the country in the charter party, under
a berth charter party the risk of delay, for any reason is borne by the
shipowner

P151

100. Laytime will not start before the start of the laydays without
charterers agreement. The last day of the laydays is the cancelling
date.
101.

Many demurrage claims are for periods of less than 24 hours and it

is more cost effective to factor the additional 24 hours into the freight
than employ their claims executives to check and chase up relatively
small amounts of money.
102.

Conoco weather clause: it divides time lost due to bad weather

equally between shipowners and charterers.

103. Demurrage may be expressed as (1) a daily rate (2) reference to
worldscale
104.
105.
106.
107.
108.
109.