Voyage planning has always been important, and the new MARPOL Annex VI ultra low sulphur fuel oil regulations coming in to force as of 1 January 2015 will make it even more important to carefully plan voyages and fuel strategies.
The development
Members will already be aware of the very significant regulatory changes coming in to effect as of the start of 2015 with respect to the maximum permissible content of sulpur in marine fuels in desiganted Emission Control Areas (ECAs), i.e.: 0.10%.
This change, which comes with a significant financial factor, will necessitate more careful voyage planning in the future to ensure the right fuel is available, it is clear for what periods it will be used and whether it is possible to avoid entering in to ECA zones altogether, or to limit the time spent within them.
Such measures will come with the need to consider both legal and insurance implications or risk charterparty breaches as well as prejudice to cover.
In the following sections, the Association will set out some of the key issues and principles which members need to consider.
Deviating to avoid ECA zones
Given the high cost of ultra low sulphur fuel, or indeed the high cost of installing and operating scrubbers, members may very well consider how best to route their vessels to avoid having to enter Emission Control Areas altogether, or at least significantly minimise the time spent within them.
This would no doubt be a particularly keen consideration if the vessel will not ultimately call at a port within an ECA zone and the vessel might just transit through such a zone.
It is very likely, however, that re-routing the vessel will present not merely physical challenges but also have consequences for charterparties, bills of lading and insurance coverage.
This is because under many charter contracts as well as contracts of carriage the vessel will be obliged to proceed promptly and by the most direct route between given load and discharge ports. A failure to do so, may be a deviation and / or other contractual breach. Furthermore such can impact on P&I insurance coverage especially where the deviation comes with the consequence of impairing rights, limits and defences under the Hague or Hague-Visby rules. Chartering, operations and legal / insurance will have to work closely with each other to ensure the planned voyage does not come with undesired consequences.
Therefore such planning needs to consider the following carefully:
- is the proposed route physically safe for the vessel
- is it also legally safe, i.e.: does the vessel have the necessary liberties to deviate incorporated in to both charterparty and bill of lading terms
- has insurance coverge been confirmed for the deviation or has necessary additional cover been arranged
When vessels proceed close to, but just outside ECAs, they will need to carefully monitor and record their voyage because even a temporary and inadvertent entrance in to the ECA zone while burning fuel above 0.10% will mean a breach of MARPOL regulations as well as applicable national laws. Detentions, fines and prosecutions may follow.
Given that charterers may seek to give orders to owners which would see a deviation occur if followed, both sides need to carefully review and plan what the present contractual situation will allow. While owners are typically obliged to follow a charterer's lawful orders, there will be an issue if the orders would see the owner possibly breach a contract of carriage or if the proposed routing brings with it physical safety challenges for the vessel.
Deviating would also no doubt need to be considered in the light of disptach as well as speed and performance warranties under the charterparty.
Planning the voyage - fuel availability in ECAs
Another aspect of the passage planning is to ensure the vessel will have enough fuel on board or is able to procure the necessary fuel at intended port(s) of call in a given ECA.
It needs to be kept in mind that:
- vessel tank space suitable (i.e.: clean) for ultra low sulphur fuel may be limited
- a vessel will have to use the ultra low sulphur fuel by the time she enters the ECA
- not all desired fuel grades / types will be available at every port in sufficient quantities
The vessel therefore needs to develop a fuel strategy that includes these factors and that means not merely good shore / ship side planning, but will also need advance contact with shipping agents and bunker suppliers to check availability and perhaps pre-book supplies to ensure they are ready when required.
Equally, when non-preferred, but otherwise MARPOL compliant, fuel is the only thing that will be available then consultation will be required with engine manufacturers to work out if the available fuel can be safely used and what specific instructions and recommendations may need to be given to the engine room team.
In some ways, proper voyage planning and bunker management on board vessels is nothing new, but the very stringent requirements of the new MARPOL regulations as well as the great variety of fuels that may be offered to vessels at different ports (gas oils, distillates, blends, bio-fuels, etc.) will make it more challenging.
Planning the voyage - minimising fuel consumption in ECAs
Related to similar issues as disucssed above with respect to a deviation that seeks to avoid all ECA territory, is the question of route optimisation to minimise time spent within an ECA.
Given the increased cost of ultra low sulphur fuel compared to traditional heavy fuel oil (even with the recent significant oil price reductions), there will no doubt be an incentive for owners and charterers to work out sea routes that minimise the time spent within an ECA.
It will again be a question of whether the routing is physically and legally safe, as discussed above in relation to deviaton.
The answer to managing this challenge will mean good communication between operations, chartering and legal and insurance, as well as a detailed understanding of the specific vessel, voyage and routing.
Further materials
The Association has developed and published a number of loss prevention advices to assist members in meeting the challenge of the upcoming MARPOL Annex VI regulations, effective 1 January 2015.
If members have a specific vessel related enquiry they are asked to contact their regular Skuld Business unit.