2010 Fuel Compliance Clause - Contractual & Charterparty Issues - New fuels and rules changing bunkering procedures

The challenges introduced by the global sulphur cap are not exclusively technical. The new limits are likely to impact contracts and charterparties. Although the new global sulphur cap will not arrive until 2020, forward planning now could help to avoid painful charterparty disputes in the future. Time charterparties will require particularly close attention, with more challenges anticipated for vessels already in long-term charterparties that span the enforcement date of 1 January 2020.

Unfortunately, there is no single “magic” charterparty clause to deal with all of the issues that might arise. All bunker clauses will almost certainly need to be reviewed but other clauses might also need to be considered, depending upon the chosen method of compliance.

Where vessels are delivered into charterparties before 01/01/2020 and will be redelivered after, issues to consider will include:

Ø What will be done, and at whose cost, with any non-compliant fuel on board that can no longer be used or is not allowed to remain on board?

Ø It is likely that a prohibition on the carriage of non-compliant fuels will come into force on 1 March 2020 for vessels not fitted with scrubbers. Non-compliant fuels will have to be removed to avoid fines or the vessel being detained. If non-compliant fuel is not consumed before that time, who will be obliged to arrange or pay for the removal of such fuel will depend upon the wording of the charterparty. The parties may wish to agree in the charterparty that non-compliant fuel will be used before 01/01/2020 to avoid extensive discharge costs and to maximise bunker tank capacity for compliant fuels.

Ø What is the definition of 'high sulphur' and low sulphur'?

Ø At the moment, vessels burn either ‘low sulphur’ (0.1%S max) fuel in ECAs or ‘high sulphur’ (3.5%S max) fuel outside ECAs. In 2020, there will be three sulphur types (<0.1%S, <0.5%S and >0.5%S). This raises the question: what will ‘low sulphur’ and ‘high sulphur’ mean in 2020? The meaning of such terms could have a significant impact on bunkers on redelivery (“BOR”) calculations.

Ø If exhaust gas cleaning systems (scrubbers) are being considered as a solution, who will pay for the installation and any associated delay or deviation? Will the vessel need to go to dry dock to fit scrubbers and will this be allowed under the charter party?

Ø It is unlikely that existing charter parties will expressly say who is to pay for a vessel to have an EGCS installed. If the charterer is likely to benefit in fuel cost savings then there may be scope for a commercial agreement as to who will pay.

Ø Can Owners be compelled to fit scrubbers?

The Court of Appeal considered this type of issue in the Elli and the Frixos [2008] 2 Lloyd’s Rep. 11 where the Court found that the owners were in breach of certain clauses in the particular charter parties for not having carried out the necessary modifications to comply with changes to MARPOL Annex I. But, the absence of scrubber on a vessel will not necessarily put the vessel or its owner in breach of MARPOL Annex VI or impact on the vessel’s documentation, hence it seems likely that the Elli and the Frixos will not apply but it will depend on the facts of the individual case.

Where long term charter parties are already being performed, there is less scope for planning ahead. However, it might be possible to agree amendments to the charter party following commercial discussions about how some or all of the issues will be dealt with. Without such agreement, there will be a risk of disputes arising, which could be expensive and time consuming.

Where charter parties are entered into after 01/01/20, the issues to consider will depend upon the chosen solution for compliance:

Exhaust gas cleaning systems (scrubbers)

Ø Vessel fitted with closed loop or hybrid scrubbers - who will be responsible for waste effluent removal?

Ø Open loop scrubbers discharge waste into the sea, whereas closed loop scrubbers retain the waste on board, which then has to be disposed of into shore facilities. Hybrid systems give the option of switching between open and closed loop. Who will be responsible for scrubber waste disposal will depend upon the wording of the charter party.

Ø Will a higher daily hire rate be justified?

Ø Some market analysts have forecasted the price of HSFO (suitable for use with scrubbers) will be around US$300 to US$400 cheaper than distillates and hybrid fuels. Therefore, it is arguable that Charterers will benefit financially from the installation of scrubbers and some industry observers are predicting that this will result in higher c/p rates for vessels fitted with scrubbers.

Ø Will performance warranties be affected by the power demands of scrubbers?

If so, then performance warranties may need to be reviewed.

Distillates, Hybrids and Blends

Ø Will the fuel prices agreed in the charter party need to be changed? 

Ø Who will be responsible for the cost and time of any bunker tank cleaning required due to switching between certain fuels? Will the bunker quality clause need to be amended, particularly given that some hybrid fuels do not fit comfortably into ISO8217?

Ø Will the performance warranties be affected? 

Ø Will suitable and compliant fuel be available during the vessel’s chosen trade? If not, who will be responsible for any additional expenses, fines etc.?

Ø Will the trading clauses need to be varied in view of any known fuel availability issues on the vessel’s chosen trade?

LNG

Ø Will availability limit the vessel’s trading options?

Ø Will bunkering operations interfere with cargo operations? If so, at whose cost?

Ø All clauses relating to fuel will need to be carefully considered in view of the special characteristics of this fuel and the lack of standard specifications.

Ø Will performance warranties need to be reviewed?

Ø Will indemnities be required to cover onerous Conditions of Use terms for bunkering operations?

Ø Some of the above issues will also apply if emerging fuels are to be used, and may also apply to existing long-term charterparties.

Almost all ships afloat today have a diesel engine of some sort on board. Even the LNG carriers that use boil off gas from the cargo to run steam turbines will have auxiliary engines or emergency generators and it is only a handful of small battery powered vessels that do not have to take on fuel at some time.

Diesel engines are very versatile machines and from the very early days have been capable of running on many different types of fuel from mineral oils, biofuels, alcohols and even elemental hydrogen. That said, all fuel types have particular characteristics that must be coped with in terms of delivery to the ship, storage on board and treatment prior to combustion.

Over the years, mineral oil fuels have become categorised and in 1987 were listed under an ISO standard – ISO 8217 – which has been updated from time to time with the latest version dated 2017.

Historically motorships have run on either residual fuel oil or distillate fuels such as marine diesel oil (MDO) or marine gas oil (MGO). The fuels are listed in ascending order of price, so it should be no surprise that owners of the vessels consuming the most fuel generally opted for fuel oil with diesel oil and gas oil being reserved for smaller vessels and the auxiliary engines of larger ships. It should be noted that even ships which ran most of the time on fuel would often switch to using MDO when entering or manoeuvring in port because the fuel system could better respond to sudden changes in engine direction or power output when using a lighter fuel.

MARPOL Annex VI – the start of emission controls

Until 1995, there were no controls on the exhaust emissions from ships but that changed with the advent of MARPOL Annex VI and its timetable of emission reduction rules. Even then the controls were not particularly stringent, and it was only with the revised Annex VI coming into force in 2010 that SOx reduction took on the importance it has.

SOx is associated with the sulphur content of fuels which is typically highest in residual fuels unless the fuel has undergone expensive desulphurisation treatment at the refinery. With the advent of sulphur emission control areas (SECAs) it seemed that distillates would be the way to go but considering the premiums such fuels attract, it is little wonder that exhaust gas cleaning technology – more commonly known as scrubbers – seems to be gaining devotees.

A scrubber may allow a ship to continue to operate on HFO with a sulphur content well above what would otherwise be allowed under MARPOL or local regulations but the ship will also need other compliant fuel on board for auxiliary engines that do not run well on heavy fuels or for when the scrubber is undergoing maintenance of inoperative.

There has also been a concerted effort to promote LNG as the fuel of the future and there are increasing numbers of other alternatives; LPG, methanol, ammonia, hydrogen as well as animal and vegetable biofuels also being suggested. On the lube front too, development is bringing about synthetic and bio-degradable products aimed at reducing reliance on mineral oils and protecting the environment.

In 2016 the IMO set the date for the last of the current deadlines in fuel regulation for 2020. The reduction to an equivalent 0.5% sulphur content in fuels globally combined with the 0.1% in ECAs and, under local regulations, some ports outside of ECAs will cause a very expensive time for owners with some suggesting an extra $60Bn bill for the industry.

The changes in the regulations for sulphur content have not yet been reflected in the ISO 8217 standard which still list the sulphur content for distillates as ranging from 1.0% to 1.5% which is of course far in excess of the 0.1% that applies in ECAs. However, for residual fuels, the standard says the sulphur content must comply with statutory requirements as defined by purchaser. The International Standards Organization is addressing the issue which is expected to become even more pressing with the 0.50% sulphur limit in 2020.

Some care needs to be taken when referencing ISO 8217 since some owners prefer to specify a particular version of the standard rather than the latest when ordering fuels. Although the basic parameters remain very similar between the different versions there are subtle differences.

Not all ships burn HFO, but it is true to say that the vast majority of modern deepsea bulkers, tankers and container ships are equipped with engines that can make use of fuels with viscosities up to 700cSt. Even so, most will not regularly use the heaviest fuels but will opt for something in the 380cSt or 500cSt range. This is certainly a lighter fuel, but it is still much heavier than the 180cst that used to be the standard marine HFO.

Demand for distillate fuels by users from all industries is now so great that the residual fuel from many refineries is heavier than it used to be. The 2020 sulphur rules will further increase demand for distillates as the only option for ships that are not equipped with scrubbers or dual fuel engines.

To make the heaviest residuals usable it is sometimes necessary to blend them with lighter oils. Blended fuel may have the superficial characteristics of an oil lighter than the heaviest residual fuel used in its production, but it does not necessarily behave in the same way under operational conditions. The main problem is that the lightest part of the fuel will combust in the engine much earlier than the heavy parts, which, under some conditions, may not combust at all. This will result in power loss and engine fouling. Fortunately, there are technologies that can help overcome this.

Multiple Choices need new skills

The need to carry different fuel types for operation inside and outside ECAs as well as for main and auxiliary engines has meant that ships now need more bunker tanks than used to be the case. The question of tank space is something that needs to be addressed at the newbuilding stage or for existing vessels by modification of existing tanks. In addition, fuels such as LNG and ethane which must be stored under cryogenic or high-pressure conditions need very different handling and treatment procedures which must be learned by those among the crew and bunkering personnel responsible for such matters.

Poor quality bunker fuels have always been a problem but in recent years the number and types of problems seem to have multiplied. Some of this is due to the refining processes necessary to meet demand for distillates, some is due to incompatibility of blended fuels – especially if biofuels are involved and some is because of deliberate acts of bad practice. The latter involves cases of contamination by chemicals or used lubricating oils.

Given the cost of bunkers and the extensive damage that can be caused by contaminated products, it is not surprising that fuel testing has become an essential tool for prudent ship operators and this too is an area where great technological strides are taking place. Fuel testing can be done by shore laboratories but more and more ships are testing onboard. It is good practice not to use any fuel until it has been tested and also important not to load the fuel into tanks that already contain fuel.

When introducing SECAs and as a consequence of the initial belief that no SOx reduction technology would be available and therefore no emission measurement necessary, the control system decided upon by the IMO to prove compliance revolved around the declared sulphur content being shown on bunker delivery notes. The notes are backed up by samples to be used only for official investigations into alleged breaches of the SOx regulations. The IMO has published guidelines for the sampling procedure which would be familiar to most ships where there is a practice of fuel sampling laid down for quality purposes.

The format of bunkering delivery notes is laid down in Annex VI and most official bodies will want to see the documents in the accepted format. Bunker suppliers in states that are party to Annex VI are required to provide the documents in the accepted format but in states that are not there is no such requirement.

It is usual for ship owners, when ordering bunkers, to at least insert clauses to the effect that the fuel oil supply process is to be in accordance with the requirements of Annex VI and with specified maximum sulphur content appropriate to the particular intended future area of operation.

Annex VI is not the only aspect of MARPOL applying to bunkering procedures. Bunkering connections for oil fuels must be fitted with save-alls to retain any spills during bunker loadings and it is good practice to take further precautions as well. Most safe management systems required to comply with the ISM Code would recognise bunkering as a key shipboard operation, a potential emergency situation and a potential threat to the environment. It would therefore be expected that a written procedure is in place and pollution control materials ready to hand and scuppers plugged. Crew engaged in bunkering operations should also be on the lookout for fraudulent activity such as barge crews introducing air into the bunkers being pumped to fool flow meters.

Prevention of Pollution by Sewage from Ships – Rules and Realities

Sewage pollution control was the first environmental initiative in history. Technologies and regulations for the land-based wastewater industries have been evolving for more than a century, bringing tangible improvements to our aqua environment.

Rules 

The IMO’s MARPOL Annex IV Convention, which aims at achieving the ‘Prevention of pollution by sewage from ships’, was developed in the 1970s, and entered into force since 2003. It contains a set of regulations prohibiting sewage discharge from ships, unless via an approved sewage treatment plant (STP), via a comminuting and disinfecting unit (CDU) at a distance of more than 3nm from the nearest land, or to the open sea (> 12nm) while en-route at not less than 4 knots. Sewage can also be offloaded to port reception facilities (PRFs). Although the USA is not a signatory country, USCG rules are somewhat similar, with an STP being referred to as a Marine Sanitation Device (MSD).

Discharging sewage to the open sea is simple and free, but it entails extra storage tanks, reduced flexibilities, and it implies a somewhat negative image for the shipping line. CDU’s are primitive and rarely employed by ships sailing internationally. The harmful by-products from CDU’s have also prompted further reviews (MEPC 71/14/2). Sewage PRFs have gained regional attention, but issues such as availability, adequacy, and fee structures have hindered their widespread adoption. It is easy to see, therefore, that STP’s have proven to be the popular option.

The Marine Environmental Protection Committee (MEPC) has developed Guidelines on STP effluent standards and performance test specifications (Table 1).

The effluent standards are ambitious compared to those of equivalent coastal discharges ashore. For example, in the Baltic Sea, a ship with 12 passengers is given a Total Nitrogen (TN) target that is the equivalent of a town of > 10,000 people. In addition, sewage from ships can be far more concentrated that from ashore. A better-informed wastewater industry might consider this target to be neither viable nor beneficial.

At the same time, there is no shortage of approved STPs that are low-cost and ‘care-free’. The marine industry seems to cope swimmingly with what are seemingly impossible targets for other industries. The MEPC has tightened the effluent standards twice in 10 years, in the meantime, STPs often became smaller and cheaper. Why not then tighten the limits further? The sky is the limit.

Realities

Here is the catch. Unlike regulations ashore, MARPOL Annex IV has no compliance monitoring, and no enforcement protocols. How the STP is actually functioning, no one knows, nor needs to know. In fact, Annex IV does not request operational STPs on board to meet any concentration limits.

Curiosity, however, reveals the facts. By year 2000, Alaskan regulators sampled 23 cruise ships. They were not impressed with what they found. Since 2001, they also surveyed 5 to 17 small ships each year, a sector plagued with MSDs using sea water for dilution. The Netherlands has taken samples from some 120 merchant ships since 2012. Pollutants such as suspended solids and Faecal Coliforms often exceeded their limits by 10 and 10,000 times respectively. These ships were ‘discharging virtually untreated sewage’ (MEPC 71/INF.22). Washington State in the USA petitioned to designate Puget Sound a no-discharge-zone (NDZ), including treated sewage from MSDs. The reality is clear, and it is not pretty. MARPOL Annex IV has not been effective.

In the absence of effective enforcement, while the marine sewage rules are becoming ever more restrictive, the gap between rules and realities is widening. The worst is still to come.

Non-conformities

With MEPC Guidelines in place, one would hope that STP performance tests actually conform to the specifications, so that consistencies are assured. After seeing a few examples, however, one may be excused for feeling disappointed.

Grey water connection to disinfection stage

Incentivised by the Classification Societies’ green notations, many ship owners have taken the initiative to treat grey water, even if this is not required by the IMO. The STP should be suitably sized in order for grey water to receive the same treatment as sewage. However, some STPs connect grey water to the last disinfection stage (Figure 4), giving a higher Qe than Qi, and yet STP certificates state that the Qi/Qe factor = 1. This means there is non-conformity.

Such STPs gain a commercial advantage by ‘treating’ grey water without increasing their sizing. The approved disinfection contact time is invalidated. Grey water pollution is disguised as STP effluent, thus causing poor performance. In an ironic twist, many new ships are awarded for carrying this non-conformity.

STP recirculation during a performance test

MEPC.227(64) requires STP influent to represent raw sewage, and prohibits recirculates generated from the STP to be returned to its influent. Otherwise, the influent no longer represents raw sewage, and the STP’s capacity would be overrated. Yet, some conformity assessment bodies have approved precisely these STPs.

In racing to the lowest level of functionalities and cost, some approved STPs do not even conform to basic environmental science and engineering principles.

Chlorination disinfection without de-chlorination

Chlorination relies on a time-concentration relationship, which has for decades been well understood and documented. With a typical contact time of 30 minutes, a chlorine dose of 5-15 mg/l can effectively disinfect biologically treated effluent (Wastewater Engineering Treatment and Reuse, 4th edition, Metcalf & Eddy). For this concentration to be reduced to below the 0.5 mg/l limit, a de-chlorination step is a must. Yet, the de-chlorination step is absent in some chlorine-based STPs. Considering that almost all chlorine-based BWMS incorporate a de-chlorination step for less arduous disinfection duty, the inconsistencies between approvals for STPs and BWMS are beyond comprehension.

‘No-sludge’ production

Some STPs do not have provisions to discharge sewage sludge. Such ‘no-sludge’ claim does not conform to environmental science, and is simply untrue. One such STP was even certified to remove Total Phosphorus (TP), in which case the ‘removed’ TP has to disappear into nowhere. Such magic boxes will never be compliant, no matter how they are operated or maintained. Most ‘no-sludge’ STPs use seawater, and the demand has been fuelled by certain sectors of the marine industry which benefit from this claim.

These non-conformities and magic boxes have found their ways into new ships in their hundreds. The credibility and accountability of the approval regime is at stake.

Silver lining

Having seen the realities, Alaska regulators took actions starting in the early 2000s. They introduced new rules and the Commercial Passenger Vessel Environmental Compliance (CPVEC) program to the large cruise ships trading in Alaska water each year. Grey water, being more polluted than sewage, was also brought under the same rules. Some vendors, including Wartsila Water Systems Ltd, developed a new generation of technologies known as Advanced Wastewater Treatment Systems (AWTS). AWTS carry the same certificates as STPs/MSDs do, but differ from them in that the ships’ discharges are sampled and monitored under CPVEC, with the results published in the public domain (data series 4 of Figure 2). The success of this program has been praised by all stakeholders, in particular by the cruise industry.

Alaska waters remain to this day as the only marine environment in the world whereby enforcement is not only in place, but is also effective.

The way forward

During MEPC 71, under pressure from Norway and the Netherlands, the Committee agreed to address inconsistencies in the application of its sewage Guidelines and ‘mal-functioning’ STPs. However, enforcement of the environmental regulations - as has happened in Alaska and the rest of our society - is still out of reach for MARPOL Annex IV. It has a long way to go.

Nevertheless, improving the sewage Guidelines can still be a very positive and significant step. It may be important to introduce process monitoring requirements, including on-line monitoring for STP effluent turbidity and effluent flow rates. This would provide good visibilities for the marine industry to get a handle on sewage pollution control. Such visibilities could pave the way for a future regulatory framework capable of closing the gap between the rules and the realities, that will be evidence based, practicable, and sustainable.

However, improving the Guidelines is meaningful only when they are conformed to. Non-conformities cause inconsistencies and poor performance status. To understand the root causes is essential in order to prevent reoccurring. To address these non-conformities is critical, even though the issue may be thorny since they are already approved by the conformity assessment bodies. But without corrective actions, tougher Guidelines would merely incentivise more non-conformities, in particular on new build ships.

At present, ship owners and yards have vessels carrying non-conformities and poor STP performance status. At the same time, the conformity assessment bodies burden themselves with these magic boxes that can be easily challenged, equipment vendors continue their race to the lowest levels of functionalities and cost, and regulators end up with regulations that are not effective. Most importantly, the marine environment continues to be polluted by discharges of sewage from ships under the IMO’s type approval regime. No one wins. While improving the Guidelines is a constructive step, ultimately effective enforcement is the key to making MARPOL Annex IV a win-win for all. And only the collective efforts of the Member States can make it happen.

The article may also be read at,

 https://shipinsight.com/articles/prevention-of-pollution-by-sewage-from-ships-rules-and-realities?mc_cid=9a61e7d6ca&mc_eid=0466dc7435

Enumeration breakdown-Court of Appeals examines what constitutes a 'unit' under Hague-Visby Rules

17 October 2018

Facts

The recent Court of Appeals case Kyokuyo Co Ltd v AP Moller - Maersk A/S concerned the enumeration of units for the limitation of containerized cargo.(1)

The claim arose following damage to a cargo of frozen bluefin tuna packed into three refrigerated containers, which had occurred during carriage by Maersk from Cartagena to Japan. The individual items of tuna were not wrapped, packaged or consolidated.

Each of the containers was shipped pursuant to Maersk's standard terms and conditions of carriage, which contained an implied term that the shippers were entitled to demand that Maersk issue bills of lading.

As a result of delays to three of the 12 containers (and a desire to avoid further delays), no bills of lading were issued for the three containers. Instead, it was agreed that sea waybills would be issued, which stated as follows: "1 container said to contain [520/206/500] PCS FROZEN BLUEFIN TUNA LOINS".

On discharge, the claimant alleged that the tuna had been damaged by high temperatures during carriage or rough handling during repacking into a replacement container. It therefore claimed approximately £860,000.

As the Hague-Visby Rules do not automatically apply to waybills, Maersk argued that the Article IV.5 limits did not apply and that it could therefore rely on the contractual limit set out in its terms and conditions of £100 per package in line with the rules. This would have limited the claim to approximately £2,000.

Decision

The Court of Appeal was asked to determine the following issues relating to package limitation:
Ø  whether the Hague-Visby Rules are compulsorily applicable if a bill of lading is not issued (or whether the waybill terms that applied to the lower Maersk terms limit would apply as a matter of contract);

Ø  what constitutes a 'unit' under the rules; and
Ø  what enumeration of cargo is required under Article IV.5(c) of the rules.

In dismissing Maersk's appeal, the court held as follows:

Ø  The Hague-Visby Rules are compulsorily applicable to any contract of carriage which expressly or impliedly provides the shipper with a right to demand the issue of a bill of lading, whether or not that right is exercised and whether or not additional carriage documents (eg, a waybill in this case) are eventually issued.

Ø  As per Vinnlustodin HF and Another v Sea Tank Shipping AS, a 'unit' is any physical item which is not packaged up.(2) There is no additional requirement that the item must have been capable of shipment in break bulk (as argued by Maersk). On the facts of the case, the individual pieces of tuna were therefore 'units'. The only relevant question, therefore, is whether individual physical items have been packaged together. If so, the individual items are not units, but instead form part of a single package. If not, each physical item is a 'unit'. Containers do not constitute a 'package' considering the Court of Appeal's decision in The River Gurara.(3)

Ø  Any description of cargo which states the number of items inside a container that are units or packages will be sufficient enumeration for the purposes of Article IV.5(c).

The court refused to follow the Australian decision in El Greco v Mediterranean Shipping that the Hague-Visby Rules require it to be clear from the face of a bill of lading not only how many items are in a container, but also whether those items have been packaged together. The waybills in Kyokuyo, therefore, were considered to have accurately enumerated the number of units in the container.

 

Aconcagua Bay – when is a berth 'always accessible'

August 08 2018

 
Facts

The Aconcagua Bay was voyage chartered for the carriage of cargo from the US Gulf. The charter provided as follows: "Loading port or place… 1 good safe berth always afloat always accessible".

While the vessel was loading, a bridge and lock were damaged and the vessel could not leave the berth for 14 days. The owners claimed damages for detention from the charterers for the period of delay.

The main issue was whether a warranty in a voyage charter that the berth is 'always accessible' means that the vessel can always enter and leave the berth.

This question had arisen once before in a 1997 London arbitration, in which the tribunal said that 'always accessible' meant always reachable. The arbitrator in this case reached the same conclusion and found that the warranty referred only to entry and not departure.

The arbitrator's finding conflicted with the view of the authors of the Baltic and International Maritime Council Laytime Definitions (2013) and the Baltic Code (2014), who considered 'always accessible' to be a warranty covering both arrival at and departure from a berth.

The owners appealed.

Decision

There were authorities on the definition of 'always accessible' regarding a vessel's arrival (eg, The Kyzikos [1989]), but none concerning departure.

In a short judgment (three-and-a-half pages), the High Court of Justice held that there had been a breach of contract. It considered that 'accessible' could sensibly mean 'usable' and not just 'reachable'. The word 'always' was an important qualifier, particularly in the context of the adjacent clause 'always afloat', which was a warranty covering the whole time that the vessel was in berth.(1)

The decisive point for the court was that where commercial parties have addressed the question of a berth's accessibility, there is no basis for a conclusion that they have addressed entry alone. A reasonable commercial party looking at the subject of berthing would consider all aspects and not confine itself to entering the berth.

Comment

It is now clear from this decision that an 'always accessible' warranty applies to departure as well as entry, whereas 'reachable on arrival' only applies to entry and arrival. Consequently, the extent of a charterer's warranty will depend on the choice of vocabulary used and parties should bear this in mind during charterparty negotiations.

Late Avoiding Action Led to January Collision

Australia has released a report following an investigation into the collision between the containership Beijing Bridge and fishing vessel Saxon Onward on January 23, 2018, off Gabo Island, Victoria.

The vessels had been aware of each other’s presence well before the collision took place. About 45 minutes before the collision, Saxon Onward’s watchkeeper had sighted the masthead lights and green sidelight of an approaching Beijing Bridge on the starboard bow.

Meanwhile, the third officer of Beijing Bridge was the officer of the watch and the sole lookout on that vessel’s navigational bridge. He had seen Saxon Onward, along with another fishing vessel, and both vessels were acquired on Beijing Bridge’s radar.

The incident occurred as Saxon Onward was bound for Eden, New South Wales while Beijing Bridge was en route to Melbourne, Victoria from Taiwan. As the two vessels closed on each other, they both realised that risk of collision existed and both took action. Beijing Bridge’s course alteration was not substantial, not made in good time, and actually increased the risk of a collision.

Saxon Onward made a substantial course alteration, but it was made too late and resulted in the collision. Saxon Onward collided with Beijing Bridge, with the trawler’s port bow impacting the ship’s starboard side. As the trawler scraped down the ship’s side, the skipper stopped the engine and the crew mustered in the wheelhouse.

As a result of the collision, Beijing Bridge’s management company, V.Ships (Germany), have advised masters and bridge watchkeeping personnel to review compliance with the COLREGs and the ship’s SMS. The company also mandated that passage plan tracks were to be laid at least 10 NM from the shoreline where possible.

Furthermore, Saxon Onward’s master has implemented a policy of maintaining two watchkeepers on duty in the wheelhouse when transiting through high traffic density areas.

Full report at

https://www.atsb.gov.au/media/5774634/mo-2018-002-final.pdf