Before breaking bulk (BBB)

Before breaking bulk (BBB). Freight is normally payable on delivery of the cargo. In the usually volatile tanker market with many traders coming in as charterers, many may be unknown to shipowners.

If the tanker takes the cargo to the discharging port and freight has not yet been paid, it may be difficult to claim freight from the receivers who may be far removed from the original charterer or consignee named in the original bill of lading . If the freight stipulation does not require freight to be paid in advance, it is usually “destination freight” (or “freight collect”). This means that the shipowner takes the risk of not being paid the freight if they do not deliver the cargo, so attempting to exercise a lien may be impractical. If a charterparty specifies that “. . . freight is payable before breaking bulk . . .” then freight must be paid before discharging commences. A prudent shipowner will attempt to insist on “freight, deadfreight and demurrage payable before breaking bulk”.

A problem can arise with demurrage because, for the discharging port, this will be unknown until after the discharge. An owner can compromise on “estimated demurrage” or, at the least, “demurrage at loading port”.

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Written by Ship Inspection

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Below bridges (BB)