PREVENTING BUNKER CLAIMS - a free guide – part 1 of 2
September 19, 2019, revised Jan 3 2020.
by Irene Notias
Using the new compliant fuels VLSFO 0.50% max Sulphur limit iis very likely going to increase bunker claims.
To make work life easier and for the sake of good order, Prime’s Bunkersplus is offering the Greek Shipping community a free brief guide to Prevent Bunker Claims, in two parts.
“We care about using valuable time and energy for more productive aims rather than arguing/negotiating a claim with a Supplier or Trader”, says Managing Director, Ms. Notias.
Most disputes are avoidable when the proper steps are taken, and all parties involved leave out emotion/prejudgments, get to the facts swiftly and in concise & clear documentation.
Gain Bunker Knowledge.
The Bunker Industry functions under ISO 8217 specs and has a set of General Terms & Conditions which have been adopted by ever supplier and trader. First and foremost, know them. Understand the Suppliers Terms & Conditions and the Bunker Confirmations and that the suppliers are ship owners who deal with logistics and personnel too. Suppliers must also understand that customers are king and not the other way around. Bunker Broker, Irene Notias always says, “without customers there are no suppliers.”
As all buyers, suppliers, traders and brokers say: it is far easier to avoid a disagreement than to try to resolve one afterwards. Both stakeholders must play ethically by the common rules. Take bunker courses offered by the International Bunker Industry or Petrospot.
A brief Guide to effectively managing bunker disputes is available, but “Preventing Bunker Claims” is best to learn first.
Types of claims:
Owner side:
- Quality
- Quantity
- Demurrage, Vessel delay due to Bunker barge
Supplier side:
- Barge delay by vessel (demurrage)
- Cancellation charge due to cancelled stem
- Change in price due to Postings change
- Interest charge for delayed payment
Checklist to prevent problems:
1. Quality
ensure suppliers specs are provided & know the spec minimums
ensure that the vsls rep (surveyor or vsls staff) witness the sampling collection from the barge
avoid suppliers that are known to have questionable fuel sources and blending techniques
even if fuel is not within the spec, it can be used if treated in accordance with guidelines issued by the major fuel testing organizations because resolution of pumping out of the bunkers delivered and replacing with fresh product is rare.
If the fuel oil is off spec containing phenols, oxygenated material, fatty acids and chemical waste then it's not treatable at all, it's a safety risk and the only sound and logical solution is de-bunkering
Always provide documentation in case needed in a more legal arena.
2. Quantity
ensure that the receiving vessel carries out “the before & after checks on the delivery on the suppliers’ barge or tanker” by having the vsls rep (surveyor or vsls staff) witness the measurements of the barge tanks figures, opening and closing of barge tank gauges
ensure the conversion of agreed volume delivered into the invoiced weight, accurate measurements of the temperature of the fuel at time of delivery
if there are differences in quantity or unusual practices, or behavior, it is to be reported on the spot to all parties concerned including the broker or trader. Simultaneously, it is noted in a Letter of Protest (LOP) immediately and/or if applicable, noted on the BDR where permitted. (Depending on Supplier one can either attach to the BDR the LOP or check a box that there is one attached.) The deliverer should sign for receipt of the LOP, although it does not mean acceptance of the content. The intermediary’s job is to smooth out the differences and help find amicable solutions.
Details of any complaint by either party must be in writing and notification carried out without delays to the other. A broker can perform the exchange more effectively as it is an independent party which can maintain the balance between the receiver and deliverer, speed up and guide the process to amicable resolution.
Sometimes the P&I clubs must get involved.
3. & 4. - Vessels Delay / Barge delay
The speed of supply and duration of bunkering – pumping rates – must be disclosed from the beginning
Recommendation to buyers to place stem with sufficient advance notice depending on port, price trend, (i.e.: Singapore – 4-5 working days Nigeria 3-5 working days, Los Angeles 3-5 working days)
- Ensure the Agent coordinates between vessel, supplier and barge co. For example, agents coordinate the barge co not the suppliers in South Africa or in any port when stem was placed on: Short notice, Friday, Before national holidays
- Ensure that Agent contacts the Supplier for the coordination of the delivery dates by giving ample notice of 72, 48, 36, 24, 12, 8, 6, 4 hours notices.
An experienced bunker broker service can perform the exchange effectively & diligently, as it is an independent party who can maintain the balance, speed up and guide the process to amicable resolution.
Sometimes the P&I clubs must get involved.
Prime’s Bunkersplus Services www.primeinc.gr
