BIMCO looking to encourage JIT with new voyage charter clause

BIMCO has published a new clause for voyage charter parties which it hopes will encourage a wider adoption of just in time (JIT) arrival principles in the bulk sector.

Writing on the association’s website, BIMCO’s Head of Contracts and Clauses Grant Hunter said: ‘The new clause creates a contractual framework to overcome the primary obstacle to just in time arrivals; the obligation on shipowners to proceed with due or utmost despatch and without deviation. This is a critical aspect of making JIT arrivals work. Removing this obstacle will allow ships to optimise their speed and thereby arrive at a port at an optimal time and avoid delays without breaching their usual voyage charter obligations.’ 

BIMCO’s JIT Arrival Clause for Voyage Charter Parties gives charterers the right to ask owners to optimise the ship’s speed to meet a specified arrival time. If the ship is on its way to a loading port, charterers must in return agree a revised cancelling date.

Hunter wrote: ‘The safety of the ship remains paramount, and any speed adjustment request must fall within the ship’s safe operational limits. The clause also requires charterers to incorporate wording into bills of lading and waybills stating that owners’ compliance with charterers’ request to reduce speed will not be a breach of the contract of carriage and that charterers.’

Hunter said that applying the just in time arrival principle ‘does not normally shorten the overall length of a voyage’, but it does ‘convert what would have been waiting time at a port into extra time spent at sea’. Hunter explained which this is important: ‘The difference is that the extra time at a reduced speed decreases fuel consumption as well as reducing emissions, helping to minimise congestion at ports and anchorages.’

Hunter continued: ‘The BIMCO clause defines the “extra time” as the difference between the ship’s original estimated time of arrival before charterers’ request to adjust the speed, and the actual time the ship arrives at its destination. The mechanism for sharing potential bunker savings has been made simple and straightforward. Owners and charterers can simply agree that each takes whatever benefit there may be from the adjusted arrival time – or they can agree that charterers will pay owners a daily compensation amount that takes into account that owners are benefiting from reduced bunker costs. Equally, owners and charterers can, if they wish, agree to apply other compensation mechanisms to suit their needs.’

Copies of the BIMCO Just in Time Arrivals Clause for Voyage Charter Parties can be downloaded from BIMCO’s website. Click here for more information.

Ian Taylor

Ian Taylor