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News: New BIMCO clause designed for bulk sector to encourage just in time arrival concept

05 March 2021

BIMCO has drafted a new just in time (JIT) arrival clause designed for voyage charters in the bulk sector in an attempt to make shipping procedures more efficient and thereby reduce CO2 emissions.

This clause will provide the contractual framework to entitle ships to optimise their speed, arriving at the port at the right time without delays and without risking any breach of their obligation to proceed with due or utmost despatch, avoiding deviations, under the charterparty.

It is expected that a wide implementation of JIT arrival clauses will lead to a reduction in fuel consumption, emissions as well as waiting times in ports and at anchorages. Additionally, it might potentially make shipping more efficient for owners by optimising vessel usage and helping charterers to set more accurate laycans. Laycans are often the reason why a ship hurries to port to meet a cancelling date but, once arrived, the vessel waits at anchorage for a prolonged time before actually berthing or commencing cargo operations.

The proposed clause entitles the charterer to request an optimisation of the vessel’s speed to meet a specific arrival time. For a ship on the way to a loading port, the charterer must reciprocate with a revised cancelling date. The safety of the ship remains of paramount importance and any speed adjustment therefore needs to fall within the ship’s safe operational limits. As an appendix to the clause, the charterer is required to incorporate a wording into the Bills of Lading and Seawaybills to reflect that the owner’s compliance with charterer’s request to reduce speed will not amount to a breach under the contract of carriage.

A JIT arrival clause will not reduce the duration of a voyage, it will simply absorb into the sea passage time that would otherwise be spent waiting and / or possibly on demurrage while also helping to ease the congestion problem at ports and anchorages.

Under the new BIMCO clause, 'extra time' refers to the difference between the ship’s original estimated arrival time, not factoring in the charterer’s request to adjust the speed, and the time the ship actually arrives at the relevant port. This way, sharing bunker savings between the parties is simplified. The parties can either agree that each party takes advantage of the benefits from the adjusted arrival time, or alternatively decide that the charterer pays the owner a daily compensation rate reflecting the reduced bunker costs.

In light of the fact that JIT arrival arrangements are successfully being used within the container sector, BIMCO believes that the bulk sector might equally benefit from them. The bulk sector will require a coordinated and determined approach between owners, charterers and other stakeholders to make this work.

Whilst unauthorised slow steaming can amount to deviation, the 'just in time' arrival concept agreed by the contractual parties would enable club cover to remain unaffected.

Members are as always encouraged to approach their club contacts if they wish to discuss this further .