Tanker Chartering Flashcards
Describe worldscale
- Wsc is able to calculate freight rates in dollars for almost any conceivable voyage (60,000 in total), taking into consideration round voyage distance, port costs and canal dues
- Bunker costs are updated yearly with the goal that the income per day of a vessel would be the same regardless of voyage
- This means that tanker owners are content to be more flexible with wide redelivery options as their daily rate when employed won’t be affected as much as a dry bulk carrier
- To accommodate market fluctuations, the wsc is followed by a number which represents a percentage (eg wsc100 = worldscale flat, wsc170 = 70% more etc)
- Wsc lends itself well to COAs as it allows for a long term commitment with reasonable flexibility for a charterer without the risk of paying for delays or breakdowns (as in the case of TCs)
What is intertanko?
As oil companies’ fleets shrank, independent owners grew; they are represented by Intertanko (the International association of independent tanker owners)
Describe the design of a crude carrier
- All have their own pumps which must be capable of fully charging the vessel in no more than 2 days
- Each tank has its own pipes/valves/instruments so specific tanks can be filled/emptied separately
- Their design also incorporates a system to remove viscous residues from the sides of their tanks; usually COW (crude oil washing) which operate like large sprinklers to wash residues towards the pump intake
- Those designed to carry the heaviest crudes have heating coils
- To accommodate crudes with volatile gases they also contain an inert gas system; this creates a layer between the top of the oil in the tank and the air to prevent possible reactions. This gas is generally scrubbed exhaust gasses from the main engine and most have an additional backup generator
- Crude oil tankers generally have to ballast more than other vessel types, and therefore they have developed an advanced ballast tank system; these are fully segregated from their cargo tanks to prevent pollution, and instead fill the void between the two hulls (they are double hulled)
Describe the design of product tankers
- Split into clean/dirty
- Clean tankers are highly specialised in cleanliness and cargo segregation as their cargo may not be further refined/filtered at discharge – average around 60k dwt
- Dirty tankers are less specialised, and generally bigger, up to crude sizes
Describe the design of chems carriers
- Cleanliness and avoiding contamination are absolutely paramount
- Tanks will be lined to both protect the metal from corrosive materials and help prevent contamination via a reaction with the metal (e.g. epoxy, but varies based on intended cargo)
- The most specialised will also have stainless steel pipes/systems to further avoid contamination
Describe the design of parcel carriers
- Specialised chems carriers with a greater focus on segregation – each tank will have individual pipeline systems and individual pumps
- Able to load several parcels of different chemicals for different shippers, meaning smaller qtys can still be economic to ship
- Operators and seafarers for parcel ships have greatly specialised knowledge of the chems they carry
Besides oil/related products, what can be carried in tankers?
Other chems such as phosphoric acid, sulphuric acid, ammonia; or edible oils such as veg oils, molasses and wine.
These are very individualised and don’t follow standardised design basics
Describe the tanker specific terms in SHELLVOY 6 v1.1
- Heating coils in lines 18-19
- Tank coatings in line 20 (it’s designed to be used with any liquid cargo - heating coils and coated tanks are rarely both applicable)
- Cranes to handle hoses in lines 21-22
- Previous cargoes in lines 29-33 (as this may be important to avoid contamination of prods/chems)
- COW and inert gas sytems are covered in lines 34-38 (COW is also covered in detail in clause 20, detailing the rights to request cargo washing and its impact on laytime)
- The vessel’s obligation to follow the **latest guidelines
not usually a requirement in dry bulk) **and carry current publications regarding best practises are in lines 44-51 (notable as this is **latest guidelines
not usually a requirement in dry bulk) ** - Laytime is covered from line 85 – this is notable because rather than $/day as with dry bulk, it specifies running hours (almost always 72) as due to their nature oil terminals do not stop for breaks as with SHEX. It also doesn’t include dispatch money (the bonus paid to dry bulk charterers if they return the ship early)
- Terms are also set out for pollution incidents
What IMO conventions cover the compensation regime for damage caused by spills of persistent oil from laden tankers?
The 1969 international convention of civil liability for oil pollution damage (1969 CLC)
1971 international convention on the establishment of an international fund for compensation for oil pollution damage (1971 fund convention)
These were further amended in 1992 by two protocols broadening the scope and increasing compensation limits; 1992 CLC and 1992 fund convention. This came into effect in 1998, eventually replacing the older two altogether in 2002.
What are the main differences in negotiating a tanker charter rather than dry bulk?
- Offer/counter offer system work the same
- Prices negotiated in % wsc
- Usually only 1 broker, rather than having an agent for both the owner and charterer
- Usually far faster; as all parties specialise in oil already, there are fewer T&Cs to agree, and as only 1 broker is dealing directly with decision makers on both sides, the time limit on offers is usually far shorter
- Unlike dry bulk, tanker chartering has never been face-to-face, and is instead desk based due to extreme specialisation of brokers (e.g. brokers will only work in crude OR prods OR chems)
Describe the use of charterparties in tanker chartering
Increasingly, fewer charter parties are being fully drawn up and signed (or executed)
Instead a recap (fixture recapitulation) is sent to both principles, and if they agree that the terms are as discussed, this forms the legal documentation for the fixture
A full charter party is only drawn up if requested
The exceptions are Brazilian, South Korean and Indian charters, where a full C/P is generally required
