Laytime and demurrage implications in voyage charter parties for chemical tankers: a case study of SASOL, South Africa.

Abstract

Background: Presently there are a limited number of standard Charterparties for the shipment of chemicals in bulk in a voyage charter. Most of the existing Charterparties that are presently being utilised were created for the oil tanker industry. Considerable similarities exist in these Tanker Charterparty forms which can also be applied in the Chemical Tanker environment. Purpose: Existing standard Charterparties were analysed together with additional clauses to determine whether there is an optimal Charterparty form that could cater for the requirements in the Chemical tanker environment. Clauses of existing voyage Charterparty forms were investigated and analysed as well as possible additional clauses. Particular attention was paid to laytime and demurrage implications in order to propose an optimal Charterparty arrangement which would be suitable for the bulk liquid chemical tanker environment with minimum risk to the Charterer and Shipments (ex South Africa) from Sasol South Africa. Methodology: A comparative and exploratory approach and a case study approach is adopted and carried out on selected, standard existing voyage Charterparties to provide an in-depth understanding and interpretation of the laytime and demurrage implications in these voyage Charterparties. A comparison of the differences in interpretation and meaning between each standard voyage Charterparty was also computed. Thematic analysis was used as a data analysis technique. The main theme impacting laytime and demurrage were compared in each voyage Charterparty for similarities and differences. These common themes in each Charterparty have been discussed and substantiated with case law. Through exploratory and comparative studies an in-depth understanding, interpretation, differences and similarities of the laytime and demurrage implications and clauses in each of these existing voyage Charterparties was attained. Findings: It was found that the Shellvoy6 and BPVOY5 Charterparties offer the least exposure to demurrage, since for these Charterparties the demurrage cost calculated was the lowest. This was constant for all routes. The Asbatankvoy and Asbachemvoy Charterparties are the only Charterparties whereby the principle of “once on demurrage, always on demurrage” can be enforced since their exceptions are not extended to demurrage but only laytime and therefore if the vessel is already on demurrage time would still count as used laytime for such exceptions. The areas that do not protect a charterer’s interest include multiple berth discharge, awaiting daylight, awaiting pilots, weather delays and pro rata of awaiting time for berth amongst all charterers calling the same berth. Including additional clauses to address these areas have resulted in additional savings for demurrage and therefore, if included would benefit all the Charterparties that were included in this study. Contribution: The contribution of this study is to highlight the need for a Charterparty form specifically designed for the chemical bulk liquid environment with special focus on risk minimisation for the Charterer in terms of laytime and demurrage.