This phrase, or something similar, is often found in detention and deviation clauses. It is often seen in additional port clauses which are added to charter parties where lump sum freight has been agreed.
With the cost of bunkers rising dramatically over the last few years bunker costs are a substantial chunk of Owners’ running costs and they will clearly want to recover these wherever they can.
But what does this phrase, ‘additional bunkers consumed’ actually mean? These clauses usually compensate the Owners time at the demurrage rate, so what is included in the demurrage rate?
This was addressed in the Nikmary where the cost of bunkers consumed during deviation was considered by the judge. The clause in the Nikmary read:
Charterer shall pay for any interim load/discharge port(s) at cost. Time for additional steaming, which exceeds direct route from first loadport to furthest discharge port, shall be paid at the demurrage rate plus bunkers consumed . . . . . . . plus actual port costs, if any.”
The Owners claimed both fuel and diesel bunkers and the judge ruled that only the fuel oil bunkers could be recovered from Charterers.
The judge seemed to come to the conclusion that had the vessel been in port incurring demurrage, the demurrage rate would include all of the Owners running costs including the cost of diesel oil.
What about other bunker costs?
What if the vessel has to heat the cargo? It is not disputed that steaming bunkers, in the case of deviation, will be reimbursed by Charterers, but if the vessel has to spend longer heating the cargo because of the deviation is that recoverable from Charterers?
On the one hand you could argue that this is no different to the vessel waiting at the anchorage to berth in a port. The cargo will need to be heated and the only compensation from Charterers would be the demurrage rate. On the face of it the Nikmary supports this view.
On the other hand a closer look at the Nikmary could make an argument the other way. In Para 48 of the judgement I find the following words:
The way in which clause 29 is worded suggests to me that the parties used the word ‘bunkers’ to mean fuel oil rather than diesel oil, envisaging that the payment of demurrage would adequately compensate the owners for the additional cost of diesel oil resulting from the prolongation of the voyage.
So does this mean that because fuel oil is used in heating bunkers it is recoverable from Charterers after all?
If there is an element of bunker consumption already in the demurrage rate shouldn’t the idling Fuel oil consumption be deducted from any claims for deviation the same way as in port Diesel consumption was discounted in the Nikmary?
I was hoping to see an arbitration on these points but so far none has been published, yet I bet these arguments go on all the time.
I understand that David Clark of Waltons and Morse will be delivering a paper on “Additional Port Clauses” at the Asdem Demurrage conference in May this year. Perhaps he will be able to answer this question for us.
Have you been involved in such a dispute? Has it been arbitrated? Can you tell us the outcome here? Do you have any views on this problem? Please add your comments here.