- Charterers face challenges dealing with off-spec bunkers in the shipping industry.
- Caught between ship owners and suppliers, charterers may encounter various costs and liabilities, including engine damage claims and fines.
- Proactive steps, such as timely contractual reviews and engaging experts, are recommended.
- Clear communication and tailored insurance coverage, like P&I cover from Gard, play crucial roles in mitigating risks for charterers.
While off-specification bunker claims can lead to severe consequences, elevated levels of sediment, cat fines, acid number, pour point, and aluminium often result in minor fuel consumption issues when precautions are observed. Neglecting these concerns initially can swiftly escalate into challenging contractual situations for charterers. It’s crucial to note that sulfur, requiring distinct regulatory considerations due to environmental concerns, is not elaborated upon in this article.
Balancing Owner and Supplier Dynamics
Charterers supplying bunkers find themselves in a delicate position between ship owners and bunker suppliers. Ship owners may refuse to use bunkers or pass on claims for engine damage, while suppliers may assert that the fuel meets specifications, relying on short time bars and final testing. This tug of war leaves charterers facing potential costs, claims, and fines.
Loss and Liability
Off-spec bunkers can lead to various costs and liabilities for charterers, including engine damage claims, de-bunkering expenses, losses on bunker resale, time-related claims, testing costs, fines (especially for sulphur), and legal fees. A proactive approach involves timely contractual reviews, understanding fuel specifications, and aligning parties on sampling and testing protocols.
Proactive Measures and Communication
To navigate challenges effectively, charterers are advised to take the following steps:
1. Timely Contractual Review
- Adhering to time bars in the bunker supplier’s terms is crucial.
- Understanding fuel specifications and standards in the charter party and sale contract is vital.
- Aligning parties on sampling, testing, and protocols or challenging final and binding testing is recommended.
2. Early Expert Engagement
- Early expert engagement aids in understanding and resolving issues.
- Expert assessment is essential when considering alternatives to marginally off-spec bunkers.
3. Timely Sample Testing
- Timely sample testing enhances understanding of the fuel supplied and informs solutions.
4. Operational Management Considerations
- Understanding crew-operational management prevents potential operational issues.
Factors like commingling, extended storage times, and inappropriate storage temperatures should be considered.
5. Ship’s Trading Pattern
- The ship’s trading pattern is crucial to be considered for potential de-bunkering and resale decisions.
In the end, talking openly and clearly with everyone involved is essential to figure out the best way forward and avoid losses for everyone.
It’s good if a charterer has insurance that covers their risks. Gard provides insurance for charterers, protecting against ship damage from bad bunkers and some de-bunkering costs. Keep in mind, though, that this insurance doesn’t cover the actual cost of the bunkers, which is a significant part of the potential loss. Charterers with Defense cover get help with disputes, supplier claims, expert costs, and legal fees related to issues from bad bunkers.
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Source: Gard
