Navig8 Awareness Booklet

OPERATIONS AWARENESS BOOKLET

2021

CHAPTER 1: Demurrage

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 As Time Charterers and Pool managers, we at Navig8 welcome you, your Officers and Crew on
board into this Charter

AIM OF THIS BOOKLET VOYAGE INSTRUCTIONS

In order to ensure smooth sailing, Please note, Voyage Instruc ons
this booklet will highlight the most and standard Navig8 Instruc ons
important aspects that can impact are overriding and should always
the profitability of a fixture. be followed, unless Operator
advises otherwise.
It is vital that Master and Operator
work together to avoid common This booklet is for guidance only;
pi alls and guarantee a safe and and intended as an insight into
successful voyage. commercially focused items that
can add value to the voyages.

INTRODUCTION TO DEMURRAGE
It is without doubt that demurrage is one of the most important sources of
income for Shipowners that can on occasions be the difference between
profit or loss for a fixture.
Demurrage is a payment for an extension of loading or unloading outside the
me period specified with the charterers in their contractual allowance. As
this payment can make up a large part of voyage revenue it is important that
the demurrage claim to the charterers is correct and valid.
To ensure this, the Master must ensure that the relevant provisions in the
charter party are followed and that the logs and statement of facts are
accurate and provide sufficient informa on.

DEMURRAGE PROTOCOL OVERVIEW

This sec on will highlight what we at Navig8 perceive to be best prac ce in
aspects rela ng to demurrage, most notably:

 NOR (No ce of Readiness)

 LOP (Le er of Protest)

 SOF (Statement of Facts)

We will first look at the key areas before looking at some relevant examples.

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 Demurrage Best Prac ce

Unless instructed otherwise please follow the points below:

1. Follow port requirements regarding NOR 4. Important to avoid any reference of

tendering and dri ing. “awai ng pilot” on SOF.
2. Always re-tender NOR a er shi ing/ 5. All documents should be signed from
anchoring/free pra que/COC. terminal. If documents are not signed,
please issue a LOP for missing signatures.
 Re-tendered NORs should be sent via
email and hard copy as per Navig8’s 6. Issue separate sets of cargo docs for every
standard instruc ons. parcel / Charterer.
3. LOP for Free Pra que should be sent 7. Upon Vessel departure from each
immediately a er NOR via email followed opera onal port, please send all cargo
by hard copy. documents amongst with relevant checklist
(Annex IV).

We’ll now take a look at a few examples and how they could effect the profitability of the voyage

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 Demurrage Example 1 — Late NOR

This example looks at a scenario where NOR is incorrectly tendered or is tendered late

SCENARIO
Laycan with charterers is specified as 28/11 00:01 as per the fixture note and the Master is
unable to load before this me and date.
Charterers’ laycan with supplier is 30/11 00:01 as per the voyage orders.

2 Days of Lost Demurrage

28/11 00:01 29/11 00:01 30/11 00:01

Laycan Charterers’ Laycan

Master should tender NOR to charterers upon arrival

Incorrect: however due to confusion between the dates he waits un l
the later date.

As result the vessel misses out on two days on its demurrage

Risk:
claim.

This issue can be resolved by spo ng the difference in the

Solu on:
fixture recap and contac ng the Operator.

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 Demurrage Example 2 — Retendering NOR

Retendering NOR when appropriate is vital during unloading in order to produce the correct demurrage claim

SCENARIO

Vessel is discharging two different parcels at two different discharge ports.

It will berth twice at the first port and three mes at the second port.

INCORRECT ACTION CORRECT ACTION

Master tenders NOR a er comple on Master should go to first berth and

of opera on at 1st berth (‘hoses off’)
but fails to retender NOR when vessel
returns to anchorage before awai ng
second berth. He repeats this process
at the second port. This will result in
missing out on poten al demurrage
between wai ng at berths.
retender a er discharge of first
parcel, then should retender when
vessel anchored and repeat this
process for each of the berths at the
two discharge ports.

RISK

Charterers will deny paying wai ng Please follow Navig8 Standing

period(s) a er comple on of 1st Instruc ons about NOR tendering
opera on. and ask operator if in doubt.

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 Demurrage Example 3 —LOP/NOR and FP
Free Pra que (FP) is a clearance that allows a Master to enter, providing there is no risk of contagion. Gran ng FP
can be one of the condi ons of star ng me i.e. for demurrage.
Charterers should pay me wai ng for FP to be granted.

COMMON ISSUES THAT CAN ARISE

Master tenders Master issues Master does not Master retenders

NOR upon arrival LOP but does retender NOR NOR a er FP
but FP is not not submit the a er FP granted. granted but does
granted and same via email. not email this.
Master fails to
issue an LOP.

RISK PREVENTATIVE ACTION

Charterers will deny to pay me lost Issue LOP if Free Pra que is not granted on
awai ng Free Pra que and/or me vessel’s arrival/tendering NOR and always
from Free Pra que ll All Fast. send NOR, NOR Retendered & LOP for FP via
email followed by hard copy(ies).

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 Demurrage Example 4—Incomplete Pumping Log
Here it is important that any restric ons to pumping that result in contractual agreements being broken are noted
in the pumping log and signed by the terminal representa ve as well as an LOP being issued about the re-
stric ons.

SCENARIO
As per pre-discharging agreement, the vessel should maintain a pressure of 7.0 bars during
discharge. When the pressure is increased at 7.0 bars, the terminal’s representa ve requests
by radio to keep the pressure at 6.8 bars. The vessel follows instruc ons.

INCORRECT ACTION CORRECT ACTION

Master does not issue LOP, pumping Always issue a Le er of Protest for
log is not signed by terminal Restric on in Pressure at vessel’s
representa ve. Manifold (NOT rely only to comments in
vessel’s pumping logs – THIS PRACTICE
RISK DOES NOT PROTECT OWNERS*)

Always issue a Le er of Protest if

All discharge me in excess of 24 hrs
Pumping Logs have not been
will be for Owners account. acknowledged from discharging facility.

*Note: The main dispute with Charterers with regards to excess pumping exists when there is no re-
stric on in pressure and s ll discharge takes more than 24 hrs due to number/size of hoses connected
and/or nature of cargo.
Unfortunately, the pumping warranty in CPs is not dependent on the size and number of hoses provid-
ed.
This is why it is so vital that the LOP makes it clear that:
 Facili es provided make it impossible for the ship to comply with 100 psi/7.0 bars
 The receiver has imposed a max restric on on the pressure or flow rate. Otherwise, then the ship
is obliged to comply with the warranty in the CP: 24 hrs pro rata and/or 100 psi/7.0 bars.

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