Shipowners carrying oil in bulk may sometimes be asked to commingle or blend cargoes. The following article examines some of the risks involved in this practice and suggests a wording for an indemnity in case an owner decides to run this risk for commercial reasons, reports Gard.
Blending cargo on board
Commingling or blending is mostly associated with oil cargoes in bulk. Cargo interests may wish to blend cargoes loaded on different dates, at different places, or with different specifications.
Shipboard commingling or blending of cargo is not done without risk. The commingling or blending may affect the specification of the cargo already loaded and the carrier may be held liable under any bill of lading already issued for such cargo. The same liability may arise under the bill of lading to be issued for the second parcel of the cargo to be loaded.
While a remark can be inserted in the bill of lading for this parcel drawing attention to the commingling/blending, should the cargo be loaded in apparent good order and condition there will be no basis for clausing which casts doubt on its apparent order and condition. There may also be complications with the dates and places of shipment stated in the bills of lading. If dates and places are different, a single bill of lading should not be issued.
Most blending is performed in shore tanks and the greatest degree of accuracy is achieved when entire shipments are pre-mixed in shore tanks before transfer. However, within the industry, onboard blending is a recognized means by which the cargo may be prepared to specification in the vessel’s tanks, normally by volumetrically blending individual components.
Letters of indemnity
The starting point is that the charterer or shipper has no right to require commingling or blending unless this has already been agreed in the charter party. On the contrary, the law specifically requires the carrier to segregate parcels loaded at different times, even if they are of the same grade. As one will appreciate, shipboard commingling or blending is clearly outside the normal scope of the carrier’s obligations under the Hague/Hague-Visby Rules and as such it will most likely affect the P&I cover for any liability which may arise as a consequence.
A carrier who, for commercial reasons, wishes to comply with a request from a charterer to commingle or blend on board, should require a suitable LOI offering best possible security in terms of any liability that may be incurred and also in respect of costs and expenses incurred including loss of time. After all, additional costs or liabilities due to blending should be for the charterer’s account.
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Source: Gard
