Bulk carrier loading and unloading time and demurrage
1. The origin of loading and unloading time and demurrage
Many bulk cargoes in the world today are transported by chartering. For a long time, loading and unloading time and demurrage clauses have always been important components of charter parties. It is said that as early as the 7th century, there was such a saying in the Law of Rhodes that 'the consignee has a ten-day preparation time beyond the departure time stipulated in the lease.' Of course, there are similar provisions in the subsequent Duke of Renon decree. If the consignee does not collect the goods within a period of time after receiving the notice of readiness, he will have to pay additional fees, except for reasons of force majeure. All this shows that the regulations concerning ship demurrage are very close to modern law. 'Loading and unloading time refers to the time agreed by both parties for loading or unloading operations. If it exceeds this period, the charterer constitutes a breach of contract; demurrage refers to the delay for which the ship is delayed once the loading and unloading operations exceed the agreed period. The agreed damages paid.” This classic definition was proposed by Lord Guest in the “The Spalmatori” case. Our definition in the contract is generally as follows: loading and unloading time is usually a specific period of time agreed in the contract, allowing the lessee to load and unload the goods.
2. Division of Responsibilities for the Time Clause
The loading and unloading time clause is a unique clause of the voyage charter party. From the perspective of risk, the loading and unloading time clause is formulated to transfer the risk to the lessee. Under normal circumstances, shipowners are not responsible for the preparation arrangements before cargo loading and unloading, they are only responsible for cooperating with the shipper in loading and unloading. How to supervise the loading and unloading of goods as soon as possible has become an issue for the lessee.
In theory, if there is no loading and unloading time clause, the lessee only needs to finish loading and unloading the goods within a reasonable time. Shipowners have to bear the risk of time loss, knowing that if the bulk carrier stays at the loading and unloading port for one more day, it will lose one day's fuel costs, crew wages, and fixed ship costs. Therefore, it is necessary for the shipowner to formulate a clause to state that the reasonable loading and unloading time in his mind is exceeded, and the charterer shall be responsible for the loss of the shipowner.
The loading and unloading time provisions in the international goods sales contract are divided into two types: compensation and independence. Such international contracts for the sale of goods often simply stipulate that the non-shipping party/chartering party’s seller or buyer must “compensate” the demurrage paid to the shipowner by the dispatching party/chartering party. This reduces the pressure on the charter party in the trade contract, so that the charterer will be more willing to accept the formulation of the loading and unloading time clause, after all, such losses are unforeseeable.
Whether it is the '1980 definition' or the '1993 definition', it is clearly stipulated that the loading and unloading time refers to the agreement between the parties to the contract. The shipowner should ensure that the ship is suitable for loading and unloading, and the charterer does not pay any fees beyond the freight. The loading and unloading time is negotiated by both parties, rather than being set by one of the parties. During this time, the shipowner is obliged to ensure that the ship is suitable for loading. In other words, the ship has the obligation to wait for loading and unloading. Usually, the shipowner counts this period of time into the cost, so the shipowner has no right to charge for this period.
In the well-known Jinkang 94 lease, the loading and unloading time clause is not directly listed. Under normal circumstances, it is common for us to establish the loading and unloading efficiency in the lease, and calculate the loading and unloading time by dividing the actual loading volume and the loading and unloading rate. Of course, this is a general situation, and in other cases, the two parties directly agree on the loading and unloading time.
3. Detailed explanation of demurrage
Demurrage liability is also unique to the voyage charter party and is an important sign of the difference between the voyage charter party and the liner shipping contract. Speaking of the demurrage fee is the failure to load and unload the goods within the time specified by both parties, the lessee should compensate the lessor for the time loss, and this amount of compensation is the demurrage.
Most voyage charter contracts have demurrage clauses, unless the voyage charter contract stipulates that there is no demurrage in CQD or 'liner clauses'. As the most widely applicable Jinkang 94 lease, it states: 'The lessee shall pay the demurrage incurred at the loading port and the unloading port in the agreed manner at the rate agreed in the contract; if it is less than one day, it shall be calculated proportionally. After receiving the invoice from the lessor, the demurrage shall be paid on a daily basis. If the demurrage is not paid in accordance with the above regulations, the lessor shall send a written notice to the lessee to request correction within 96 hours. If it is within the specified time If the demurrage has not been paid and the ship is still at the port of loading, the shipowner has the right to terminate the contract at any time and claim the losses caused thereby.'
It can be seen that the Jinkang 94 contract pays more attention to protecting the owner. If the charterer fails to pay the demurrage on time, he may face the consequences of the termination of the contract. In recent years, the shipping industry has been sluggish. In actual operation, if the shipowner does not have a better choice of cargo, the shipowner will try to maintain the contract, so there are some accommodations in the payment of demurrage, such as and The freight is paid together, etc. This is also a change that shipowners have to make when the market is down, and it reflects the sluggish market.
4. What is the relationship between demurrage and loading and unloading time
Demurrage is linked to the loading and unloading time of the loading and unloading operation phase, so it is said that there is a loading and unloading time clause before the demurrage will appear. If the CQD was formulated at the beginning, there would be no demurrage, but there would be 'damage for detention.' Whether it is during the preparatory voyage or the execution voyage, or at the port of loading or unloading, as long as the ship is delayed due to the breach of the charterer or those responsible for him, it will happen The right to claim for delayed losses. Unless the delay is after the ship has reached its designated destination and when the loading and/or unloading operations have not been completed, and when the remaining loading and unloading time is sufficient to offset the delay, or if the ship is in demurrage In the meantime, the demurrage will be incurred when it can be paid, otherwise, for such demurrage, the uncleared losses should be compensated. Therefore, the delay loss should be the ship delay loss other than the loading and unloading time, and has nothing to do with the loading and unloading time.