Bunker clauses

Bunker clauses. “Bunkers” is the fuel energy used by a ship. This can include different grades and types of fuel oil used for different purposes. It can also include coal. In charterparties there are a number of clauses dealing with bunkers. BIMCO has issued, supported or recommended certain “Bunker clauses” that should be inserted in charterparties. These are listed below:

BIMCO Bunker Shortage Clause for Voyage Chartering 1974
BIMGO Bunker Shortage Clause for Time Chartering 1974
BIMCO Bunker Shortage Clause for Bills of Lading 1974
BIMCO Bunker Rise Clause for Voyage Chartering 1974
BIMCO Bunker Supply and Payment Clause for Voyage Charters (Tank Vessels)
FONASBA Bunker Variable Clause.

Some other clauses connected with bunkers are described below.

Bunkering clause (P. & I. Bunkering clause) . Under general obligations of a carrier to carry goods by sea, the ship is note permitted to “deviate” from its contracted voyage for reasons any of which are not related to safety of life at sea or preservation of the ship from danger. Deviation may be justifiable if it is expressly permitted in the contract document or in effective legislation relating to carriage of goods. by sea. Usually such additional justification for deviation is connected with saving property at sea. To deviate for the shipowner’s own purposes, for example, to lift bunkers at a port where it was cheap, would be a breach of the contract of carriage and the shipowner could become “liable” under the contract. If there was such a breach of the charterparty there would be a good chance that the owner would lose any protection he may have been able to enjoy under the charter such as any limitation of liability. The shipowner’s liability insurer, the P. & I. Association, generally advises the owner to insert a clause in the voyage charterparty permitting his ship to deviate for the purpose of bunkering without a breach of charter occurring. An example is contained in the MULTIFORM charterparty:

“P & I bunkering clause:
The vessel shall have the liberty as part of the contract voyage to proceed to any port or ports at which bunker fuel is available for the purpose of bunkering at any stage of the voyage whatsoever and whether such ports are on or off the direct and/or customary route or routes between any of the ports of loading or discharge named in this Charterparty and may there take bunkers in any quantity in the discretion of the Owners even to the full capacity of fuel tanks and deep tanks and any other compartment in which fuel can be carried, whether such amount is or is not required for the chartered voyage.”

Bunkers on delivery and redelivery. This “bunker clause” in a time charterparty stipulates that charterers shall accept and pay or all coal or fuel oil in the vessel’s bunkers at port of delivery and, conversely, owners shall take over and pay for all coal or fuel ail in the vessel’s bunkers at the port of redelivery at the current price at the respective ports. It is customary to agree upon a certain minimum and maximum quantity of bunkers on redelivery of the vessel (NYPE time charterparty).

Sometimes owners will arrange with the charterers to redeliver the vessel with a greater quantity of bunkers than originally agreed upon, for example, if the vessel can replenish bunkers at a port en route at an advantageous price, compared with the price at port of redelivery and the extra quantity is required in connection with the subsequent employment of the vessel. Such extra bunkers can only be taken if the vessel can accommodate same without shutting out cargo, for instance, in case the vessel’s cargo compartments are full but the ship is not “down to her marks”, so that the required deadweight is available for extra bunkers. In such a case a special arrangement should be made between the charterers and the owners concerning price. As a rule the advantage can be divided on a 50-50 basis.

A more detailed clause dealing with bunkers on delivery and redelivery is contained in cl. 4 of the ASBA’I’IME charterparty 1981 (derived from the 1946 NYPE time charter):

“3. The Charterers on delivery and the Owners on redelivery, shall take over and pay for all fuel oil and diesel oil remaining on board the vessel as hereunder. The vessel shall be delivered with .. . long/metric tons of fuel oil at the price of… per ton; .. . …… long/metric tons of diesel oil at the price of . . . per ton.”

Sometimes such a clause may stipulate merely that the bunkers on board on delivery and redelivery should be the same quantity, with perhaps a small tolerance because of difficulties for “sounding” tanks and assessing the quantity on board. This type of clause is unfavourable to shipowners because it results in the owner’s having to subsidise the charterers operations because the owner has already paid for the bunkers on board at delivery and the Charterer is using what is, in effect, the shipowner’s property or the value of the owner’s money. Later, the Charterer can simply obtain bunkers more cheaply and replace what he has used in his own service.


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Bunkers on delivery and redelivery