Ship agents face an increasing risk of legal disputes over weekend port charges, primarily due to a lack of clear operational instructions from owners and charterers. The International Transport Intermediaries Club (ITIC) warns that ambiguity regarding working hours exposes agents to financial risk, even when costs are clearly communicated upfront.
Case Study of Agent Liability
ITIC recently handled a dispute involving a shipowner who refused to pay a 150% stevedoring surcharge incurred because a discharge operation extended into a Saturday.
- Owner’s Claim: The owner argued the agent should have deliberately delayed operations until Monday to avoid the higher weekend rates.
- Agent’s Position (Upheld by ITIC): ITIC supported the agent, finding they had acted correctly for several reasons:
- The Pro Forma Disbursement Account (PDA) had clearly outlined the weekend surcharge rates (150% for Saturday, 200% for Sunday/holidays).
- The Master (Captain) was aware of the progressing discharge operation.
- The owner failed to communicate any prior instructions to halt weekend work to save costs.
- The agent’s decision to proceed was reasonable to maintain the berth and avoid additional financial penalties and complications that would result from delaying the operation.
Lesson for Agents and Owners
This incident highlights that in the absence of explicit instructions to the contrary, the agent is deemed to be acting in the best interest of the principal by maintaining the efficiency of the operation.
- Agent’s Best Defense: ITIC advises that while the PDA sets out the potential costs, agents should proactively confirm any cost-sensitive operations in advance whenever reasonable and possible.
- Key Protection: Transparent communication and accurate written records remain the best protection against disputes, especially as narrow profit margins increase pressure on owners to minimize costs.
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Source: ITIC
