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Navigating
Decarbonisation
Special
New IMO requirements
present challenges for
shipowners and charterers.
Our experts look at a range
of issues and how they can
be tackled.
ALSO IN THIS ISSUE
A legal look at LNG as a marine fuel
Drill bits: Steering failure
Keep crew in mind following a
serious incident
...plus much more
ISSUE 124:
SUMMER 2021
www.nepia.com
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ISSUE 124:
SUMMER 2021 /
Helping Members Don’t scupper
your last line
CONTENTS beat bad bunkers of defence
with technology
New in this edition
Tap on the authors for their
profiles and contact details
SHIPS CARGO LEGAL
Maria Psaroudaki
North has collaborated with fuel testing experts
Risks arising when issuing VPS to provide our Members with global bunker
bills at the discharge port
Since the start of the Covid-19
data on MyGlobeView.
The consequences of a bunker spill can
pandemic, shipowners and be severe, causing damage to the
carriers have faced an increase in The VPS fuel quality layer on our Features exclusive to North environment and leaving the vessel
John Southam requests to issue bills of lading at David Richards
Members-only maritime intelligence Members include: facing action from the local authorities.
Calling all dry bulk operators the discharge port. A Smart Choice: a new But the condition and effectiveness of
platform MyGlobeView, helps our
David Patterson – DryBMS is coming! court judgment about Members make more informed Top 30 ports for cases of ‘off-spec’ onboard containment arrangements
A new quality standard for dry David Patterson intercepting freight decisions on their fuel purchasing bunkers in last two months are often overlooked.
Don’t scupper your last line bulk vessels will be launched in The UK High Court has issued an
of defence Looking straight at the arrangements. It also allows the Top 10 ‘off-spec’ parameters for When it comes to bunker spills,
2021– DryBMS. It’s been important judgment clarifying
The consequences of a bunker angle of repose onboard engineers burning the fuel each of the ‘Top 30’ ports prevention is better than the cure.
described as “TMSA for the dry that ordinarily an owner is not
spill can be severe, causing Non-cohesive bulk cargoes to have a better idea of what they Robust bunkering and fuel transfer
bulk market”. But what is it and liable to pay damages to a Regional and historic overview and
damage to the environment and pose a risk of shifting, so it’s might expect. procedures, along with correctly
what does it mean to our dry charterer if it collects freight due included data for ports or regions
leaving the vessel facing action important that these cargoes operating high-level alarms and level
bulk Members? under its bills of lading even Leveraging the wealth of data collected with no off-spec parameters
from the local authorities. are properly declared. gauges, should prevent a tank from
where no sums are due under a by VPS based on thousands of bunker VPS bunker alerts for the past ever overflowing.
time charterparty. samples, the layer provides information 12 months However, tank overflows do sometimes
on bunker quality from around the world.
occur, either through equipment failure
NAVIGATING DECARBONISATION SPECIAL or circumstances that lead to human
error. When this happens, the last line of
Mark Smith Mark Smith & Alvin Forster
FIND OUT MORE defence in preventing a pollution
Marcus Dodds & Helen Barden incident are save-alls and scupper plugs.
IMO’s carbon reductions Therefore, it is important to ensure that
push power limits down A legal look at LNG as Understanding the EU-ETS they are up to the job of containing
Shaft or engine power a marine fuel Shipowners and charterers bunkers onboard.
limitation is likely to be a The number of LNG-fuelled should review their contractual
popular choice for many vessels is expected to increase arrangements Common issues
shipowners to meet the in the coming years. We look at in good time prior to Some of the more common defects that
new IMO requirements. what an LNG future holds from implementation of the can affect these vitally important
a legal perspective. EU-ETS to shipping. containment measures include:
Save-alls
Missing or poorly fitted drainage plugs
Wasted steel work or cracked welds
LOSS PEOPLE Filled with debris or water that
PREVENTION CLICK TO PLAY significantly reduces the capacity of
the save-all
Lucy Dixon Ross Waddell Scupper plugs and fish plates
John Southam & Alvin Forster Seized tightening arrangements
Healthy Eating
In recent years there has been, Keep crew in mind following Learn more about the VPS layer Access MyGlobeView by clicking here Perished or cracked rubber seals
Drill Bits: Steering failure on MyGlobeView in our video by
Next in our ‘Drill Bits’ series – quite rightly, a greater focus on a serious incident Visit our 2020 Vision sulphur cap Hardened rubber seals that will
seafarers’ mental wellbeing. But In the aftermath of an incident clicking on the thumbnail above
where we help you get the most expertise area by clicking here not compress
we should also take good care of on board that leads to serious or For more information or to request
out of your drills - we look at Wastage or cracks on scupper housing
our physical health. fatal injuries, the wellbeing of an online demo, contact us at:
emergency steering drills. or on the fish plate
fellow crewmembers must not loss.prevention@nepia.com
be forgotten. Regular inspections
Thorough inspections should identify
any of these deficiencies. The crew can
then rectify them in good time prior to
Editor: Alvin Forster Contributors: John Southam, Maria Psaroudaki, David
the next bunkering operation.
Patterson, David Richards, Mark Smith, Helen Barden, Lucy Dixon, Ross Save-alls should also be regularly cleaned
Waddell, Kim Rogerson, Sally Bettinson, Gemma Martin Middis and Ben to ensure that they are free of oily
Mushen. Special thanks to Marcus Dodds of Watson Farley & Williams (WFW). residues. This is to ensure that any
Copyright © 2021 The North of England P&I Association Limited.
All articles or extracts may be quoted provided that North is credited as the source. Photographs: Adobe Stock, Pomorzev / Shutterstock.com and istock rainwater collected can be safely
‘Signals’ is published by The North of England P&I Association Limited How have we done? Let us know what you think of the latest edition. drained overboard.
100 The Quayside, Newcastle Upon Tyne NE1 3DU UK Contact us at: signals@nepia.com By David Patterson
Telephone: +44 191 2325221 Email: loss.prevention@nepia.com Insight articles and back issues: Current articles, further information and back Loss Prevention Executive
www.nepia.com issues of Signals are available online at: www.nepia.com/latest/articles
02 Signals / Issue 124: Summer 2021 / Contents www.nepia.com 03
Calling all dry Target levels Assess yourself
So, what if I can’t meet the highest target
DryBMS FAQs
Will DryBMS survey the
bulk operators –
level, does this mean I am a bad operator? vessels and / or verify the
evidence independently?
NO! Importantly you must understand it
is YOU that sets the target level, not the Currently there are no plans to do
DryBMS is based on owners of the standard. These levels are this, this is purely a self-assessment
DryBMS is coming!
a self-assessment; not set to say that all operators must reach process. Of course, the standard
review each subject area the ‘excellence’ target level; that is not the cannot control what charterers may
wish to do in the future with regard
against the set target point of the levels.
surveys or verification.
level and gather evidence As with TMSA, where tanker operators
decide which level is best for them and
to show you are their business, many do not choose the
What stops operators scoring
themselves top marks even
meeting the
A new quality standard for dry bulk vessels will be launched in 2021 – DryBMS. target level
very top level. DryBMS allows the operator
to select the level they want to achieve.
if they don’t deserve it?
Nothing – this is based on trust.
It’s been described as “TMSA for the dry bulk market”. But what is it and what does Management should decide on the target However, it is imagined that any
based on the needs of their charterers,
it mean to our dry bulk Members? trades and fleet.
misrepresentation will be short-lived.
If charterers take on a vessel on the
Basic
This is meeting the minimum standards Once the target level has been set by the understanding it is operating in the
DryBMS is a joint initiative from Rightship and Intercargo, with input from representatives of the dry bulk industry.
required to trade as laid out by the vessel’s participating company, it is important that “EXCELLENCE” category, and issues
This self-assessment programme sets out 30 areas of management practice within four sections: Performance, People, Plant the project is driven by the company’s with cargoes or indeed safety arise,
Flag State and Classification Society. The
and Processes, which are subject to four target levels. At the ‘basic’ level, it requires companies to meet existing legal requirements, senior management. But that doesn’t questions will be asked.
company must set some HSSE goals and
but it also allows companies to use best practice to raise their standards by setting three further levels: ‘intermediate’, ‘advanced’ mean one person needs to do everything!
refer to all relevant industry guidelines and DryBMS say this will be a case of
and ‘excellence’. Spread the review to the relevant subject
accepted normal best practice. “only lying to yourself.” One of the
area department, e.g. your HR department clear advantages to the system is to
Intermediate can take ownership of the ‘people’ section. allow an operator the chance to see
Your company meets all the ‘basic’ The standards include the expectations, where improvements can be made
THE FOUR SECTIONS level requirements but also follows a
continuous improvement process as
targets and even suggested evidence. Of
course, this is suggested evidence and not
in the company. All safety records
plateau at some point, DryBMS may
well as formalising in your procedures an absolute list. allow you to focus on where further
non-mandatory best practice. You prove Once your teams have gathered their improvements can be made, both
you go beyond basic requirements to evidence, you can record your findings with safety and efficiency, to start
manage risk. across the sectors and score yourself for improvements again.
Advanced each subject area on the online self- It sounds a big job! Where can
assessment form. You may not always I start?
You meet the ‘intermediate’ level and
need to upload your evidence - just outline
can show your continuous improvement DryBMS has set out 17 priority subject
the evidence you found and how it shows
process isn’t just in place but operates areas across three sectors. These are
you meet the criteria for the target you set.
effectively. You look ahead and adopt all safety-critical items and should
1. Performance 2. People upcoming legislation and guidelines earlier therefore be tackled first. Perhaps look
Scoring
The subject areas in this section are all These subject areas are centred around than required. You also use tools to at these now and start thinking about
Scores for each stage are based on
based around proactive Health, Safety, a proactive human resources (HR) policy. manage the KPIs you set with regard your evidence.
the following:
Security and Environment (HSSE) culture to HSSE and other emerging risks.
Questions concern aspects such as the This level is not met: 0% Is it easier to get a third party
and the objectives within your company.
selection criteria for both seagoing and Excellence This level has substantial opportunities to do this for me?
Examples include:
office staff, recruitment methods and for improvement: 25% DryBMS do not believe so. Those
Your company’s commitment to HSSE You meet all the ‘advanced’ level items and
training standards. Importantly it also that have reviewed the standard
you collect and analyse leading indicators This level is partially met: 50%
HSSE objectives and key performance includes crew welfare. and subject areas agree that, on the
and assess emerging risks. Importantly,
indicators (KPIs) This level is substantially met: 75%
you show you have a system in place for whole, they already have these things
Safety management system (SMS) acting on and correctly closing-out issues This level is fully met: 100% in place; it is about setting a target
governing documents from HSSE risks. The percentages for each stage are and evidencing that you have met it.
Audit planning, review and close out totalled and divided by 100 to give a Whilst this may take time, it should
score out of four. not require paying third party providers
to do this. It should also be a learning
Scoring will be recorded on your online
process for the company’s employees,
dashboard, which you may allow third
where they take ownership of their
parties, such as charterers, to access.
roles within their department.
Is this another thing we are being
By John Southam forced to do?
Loss Prevention Executive
No, DryBMS is voluntary! However,
if the take-up is good from the industry,
3. Plant 4. Process charterers may think more deeply
As the name would suggest, this This covers the “how we get things about who they charter, based on
section is all about the vessel’s done safely” aspect. Subjects include safety standards as well as cost.
equipment, its maintenance and ensuring
it is fit for purpose. Subject areas include
safety culture improvements, cyber
security and emergency planning
FIND OUT MORE Therefore, those that are reluctant,
may need to get involved.
dry docking surveys, critical equipment as well as the more day-to-day tasks Click here to view the draft standards
and planned maintenance. like mooring, cargo operations, on the DryBMS website
ballasting and bridge procedures.
04 Signals / Issue 124: Summer 2021 / Ships www.nepia.com 05
Risks arising when issuing Looking straight at
bills at the discharge port the angle of repose
Since the start of the Covid-19 pandemic, shipowners and carriers have faced Non-cohesive bulk cargoes pose a risk of shifting, so it’s important that these
an increase in requests to issue bills of lading at the discharge port. cargoes are properly declared.
Actions by the shipowner or carrier In a recent case, a shipper incorrectly
can include: declared an angle of repose for a cargo of
Seek confirmation that the shipper is granulated pig iron, effectively declaring a
aware and authorises both the issuance cohesive cargo as non-cohesive. Because
and release of the bill of lading at of the risk of shifting in transit, non-
discharging port. cohesive cargoes are subject to additional
requirements under the IMSBC Code.
Ask the charterer for the details of the
agent at the discharge port and find out Cracking the Code
if this agent is in fact the receiver’s agent.
Firstly, it’s important to understand the
It is this agent that is most likely to
definitions provided in the IMSBC Code.
expose a carrier to a claim from an
unpaid shipper by short circuiting the Angle of repose means the maximum
process and authorising issue of a bill slope angle of non-cohesive (i.e.
of lading to the receiver directly. free-flowing) granular material. It is
Such requests by charterers introduce The reason behind the recent increase It may be necessary to appoint a measured as the angle between a
risks which need to be understood to in such requests is the delayed arrival of separate agent to issue the bills of lading horizontal plane and the cone slope of
limit exposure to cargo claims and delays. the original bill at the discharge port due on the owner’s behalf at the discharge such material.
to alleged disruption in courier services. port, preferably in consultation with
Place of issue However, there is a risk that this practice the shipper.
Customary practice is that a bill of lading may be exploited to gain access to the
The shipper should provide a Letter
is issued and released to the shipper at goods without paying for them.
of Authorisation, confirming in writing Angle of repose
the load port, either by the Master or
Mis-delivery and claims for delays that a named agent at the discharge
by the shipper or charterers (or their
port is authorised to issue and release Safe carriage requires the bulk density of the cargo to be
appointed agent) in accordance with the As a consequence of this practice,
the original bills of lading. taken into account when determining the
Master’s Letter of Authority. The shipper shipowners and carriers have found Cohesive material means materials To allow their safe carriage at sea,
then presents one original bill of lading themselves drawn into acrimonious If the shipper’s agent is the same as non-cohesive cargoes are required to be securing arrangements for the cargo and
other than non-cohesive materials.
to their bank to receive payment. Once disputes between the cargo sellers the receiver’s agent, then the shippers suitably trimmed in accordance with also the influence of free surface effect on
should clearly state that they are aware Non-cohesive material means dry the vessel’s stability.
payment is made, the bank releases it and receivers. section 5 of the Code. The level of
to the receiver. of this conflict. materials that readily shift due to sliding
In one such case, the owner agreed trimming required is dictated by the
during transport, as listed in Appendix 3 Checking the angle of repose
Although the place of loading must to charterer’s request that the receiver’s The Master’s Letter of Authorisation to cargo’s angle of repose. The lower the
of the Code. The angle of repose stated on the
be named on the bill of lading, it is not agent issue the bills of lading. The agent the charterer’s agent to issue the bill of angle of repose, the more level the stow
lading on their behalf should clarify that The cargo in question was declared by the will be required to be trimmed. shipper’s declaration should be
essential that a bill is issued at the load then released the bills of lading to the
the bills be issued to the shipper or their shipper under the Bulk Cargo Shipping determined using a ‘tilting box test’. The
port. If the place of issue is not the load cargo receivers and discharge
nominated agent as per the shipper’s Name (BCSN) ‘IRON SMELTING BY- The unevenness of cargoes with an angle details of this testing procedure can be
port, the place of issue is still important commenced against presentation of
Letter of Authorisation. PRODUCTS’, the schedule of which states of repose greater than 35° is not to exceed found in Appendix 2 of the Code, which
as it affects the compulsory application that bill of lading. When the shipper
‘not applicable’ for the angle of repose. 10% of the vessel’s beam with a maximum also provides an alternative testing
of the Hague, Hague-Visby or Hamburg became aware, they applied to the local An implied and/or express indemnity height of 2 metres. For cargoes with an method if a tilting box is not available. A
Rules in the contract of carriage. court to stop delivery of the cargo as the against the charterer under the Master’s But the shipper contradicted this by angle of response greater than 30° to 35° check can be also be performed by the
receivers had yet to pay for the cargo. Letter of Authority may not be preserved including an angle of repose on the
Risks with issuing bills at the this allowance is 10% of the vessel’s beam, Master, as the only equipment required is a
The vessel was detained for a month if the owner does not first seek to satisfy declaration, therefore declaring the cargo
discharge port however the maximum height is reduced horizontal table that is free from vibration,
at the discharge port while the local themselves of the shipper’s knowledge. to be non-cohesive (free-flowing).
While it is not unusual for bills of lading to 1.5 metres. An alternative to these a sheet of rough-textured paper, a
court considered the unpaid shipper’s If a straight bill of lading or a bill of lading However, due to the highly irregular, trimming requirements is to load the cargo
to be issued in places other than the load protractor, and a 3-litre conical flask. This
application. In addition, the lack of proper specifying the consignee as merely non-rounded shape of the granules, the using trimming equipment approved by
port, caution should be exercised when can prove an effective tool to ensure the
endorsement of a bill of lading issued in “to order” is to be issued, arrangements cargo was in fact cohesive, and it would the country’s competent authority.
the place of issue is the discharge port. cargo being loaded matches the angle of
these circumstances can result in the still need to be made for the shipper to not free flow.
This is because the agent at the discharge repose stated on the shipper’s declaration.
carrier losing legal protection against a endorse the bill of lading (either in blank Grain regulations
port is often appointed by the cargo mis-delivery claim. Under English law or to a named consignee) after it has Identifying a non-cohesive cargo Cargoes with an angle of repose less than
receiver. So by agreeing to authorise the this risk exists for both straight and been issued. Appendix 3 of the Code lists a number of By David Patterson
or equal to 30° can free flow like a grain
charterer’s agent to issue the bills of lading ‘to order’ bills of lading. cargoes which are non-cohesive when dry. Loss Prevention Executive
cargo. For this reason, the Code requires
at the discharge port, the carrier may By Maria Psaroudaki Each individual schedule of the cargoes
inadvertently bypass the shipper and Making reasonable enquiries these cargoes to be carried in accordance
Deputy Director (Claims) listed in this section will state an angle of
facilitate the unauthorised release of the with the International Grain Code in
A shipowner or carrier who is considering
original bill of lading to the cargo receivers such a request by the charterer should
repose in the physical properties table and
the trimming requirements in the loading
addition to the requirements of the IMSBC FIND OUT MORE
Code.
before they have paid the shipper for the
goods. They might also be preventing
firstly make enquiries to ensure the shipper
is aware and has approved the issuance of
FIND OUT MORE section. Cargoes not listed in this section, For more information, or if you have any
but exhibit properties of non-cohesive Some examples of these cargoes are questions on the carriage requirements
endorsement of the bill of lading by the the bills of lading at the discharge port. If you receive such instructions from of non-cohesive cargoes, please speak
material are subject to the same trimming AMMONIUM NITRATE, GRAIN SCREENING
shipper to allow lawful transfer of rights your counterparts or would like to see to your usual contact at the Club.
requirements as non-cohesive cargoes. PELLETS and UREA. As well as complying
under the document to a new holder. examples of a Letter of Authorisation,
with the grain regulations, the IMSBC Code
speak to your usual contact at the Club.
06 Signals / Issue 124: Summer 2021 / Cargo www.nepia.com 07
A Smart Choice: a
to a time charterer for any amount which In The Nanfri, the time charterer had An owner’s right to collect freight under
he receives over and above that which significantly interfered with the charterer’s its own bills of lading, which was the
is due under the time charter. ability to use the vessel in the grain and subject of this judgment, should not be
steel trade by refusing to sign or authorise confused with the alternative self-help
new court judgment
So far this was a restatement of fairly
orthodox law. The Judge then went on freight prepaid bills of lading. However, the remedy that a shipowner may have in
to conclude, contrary to what is said in unfettered right of a shipowner to collect exercising a lien on sub-freights. Although
the current edition of Time Charters, that its own freight under its own bill of lading, similar in effect, a lien on sub-freight or
coupled with an obligation to account for sub-hire is a very different legal remedy.
about intercepting freight
there is no basis to imply a term of the sort
found by the Tribunal or contended for any surplus collected above sums due Nonetheless, there is now an interesting
by Charterers. The Judge reached this under the time charter, does not deprive contrast between such lien rights and an
conclusion by applying the usual test to the charterer of the benefit of the vessel’s owner’s right to collect bill of lading freight
justify the implication of terms into a earning capacity. in that, as observed by Butcher J, there
contact and because the longstanding should be no debate in the future as to
Conclusion
“intercept and then account for any whether an owner is entitled to collect
The award was set aside insofar as it
The UK High Court has issued an important judgment clarifying that ordinarily an owner surplus” mechanism was sufficient to
awarded Charterers damages for breach
unpaid freight under an owner’s bill of
protect time charterers. The Judge said lading, whereas there are often disputes
is not liable to pay damages to a charterer if it collects freight due under its bills of lading it was preferable that it be clear to all in of an implied term not to collect freight. between owners and charterers as to the
the market that a shipowner is ordinarily effectiveness of a lien exercised over
even where no sums are due under a time charterparty. entitled to collect bill of lading freight
Comment
sub-freights, meaning that sub-charterers
This judgment provides welcome clarity
under its bills of lading without restriction. and others often feel they have no choice
for the industry by confirming that an
but to either place the funds into escrow or
Interference with employment owner is under no restriction in its ability
to seek “interpleader relief” from a court.
The Judge rejected an argument made by to collect freight due under its bills of
Charterers that, in accordance with the lading, even in the absence of a default
decision of the Court of Appeal in the by its time charterer (unless there is By David Richards
1970s in The Nanfri, a restriction on an an express provision to the contrary). Director (Claims)
owner’s ability to collect freight was The obligation to account for any sums
necessary to ensure a time charterer can, collected over and above any sums due
relying on Clause 8 of the NYPE form, under a time charter is sufficient protection
enjoy the full benefit of the ship’s earnings to ensure that a rogue owner cannot retain
in return for payment of hire. both freight and time charter hire.
The case arose in the context of the total Although, as the Judge records in his that, under the terms of the NYPE form
loss of the laden capesize bulk carrier judgment, a London arbitration tribunal and similar, there is an implied obligation
Smart in August 2013 whilst entered with found there were shortcomings in the on an owner to allow the charterer to
North following a grounding at Richards running of the port, Owners’ unsafe port collect freight. Only if the time charterers
Bay in South Africa. claim did not succeed due to negligence default, does the implied term cease to
on the part of the Master leading up apply such that an owner is free to collect
Background to the grounding. Charterers argued in any freight owed to them. This statement
Owners had issued bills of lading marked the arbitration that they were entitled to of law is said to be based on non-binding
that freight was payable “as per charter damages representing the loss of freight observations made by the Court of Appeal
party”. At the time, the ship was on time on the basis of an implied term in the in The Bulk Chile in 2013.
charter on the NYPE form, meaning that charterparty to the effect that Owners After carefully reviewing previous
Owners had authorised Charterers to would not revoke their authority to collect authorities and considering a number of
collect freight due under bills of lading. freight from the voyage charterers unless different formulations for the implied term
Those time charterers had sub-voyage hire and/or other sums were due under the put forward by Charterers, Mr Justice
chartered the ship. time charterparty. The Tribunal upheld that Butcher concluded that an owner has an
claim even though it also found that there unfettered right to collect bill of lading
Following the grounding, Owners issued
were in fact sums due under the time freight under its bills of lading. Where that
notices to cargo interests and voyage
charterparty at the time the notices were owner has time chartered the ship, the
charterers seeking direct payment of
served, namely about US$400,000 in owner retains a right to countermand the
unpaid freight due under those bills of
lading. Despite these notices being sent,
respect of bunkers consumed during the authority granted to a time charterer to FIND OUT MORE
charter service prior to the grounding. collect bill of lading freight on the owner’s
voyage charterers failed to pay most of Read the full judgment here:
the freight outstanding and subsequently behalf, and this right is not conditional on
Implied term Alpha Marine Corp v Minmetals
became insolvent, leading to the loss any default by a charterer. If an owner does Logistics Zhejiang Co Ltd
The justification for the Tribunal’s decision intervene to collect bill of lading freight
of about US$1.3 million in freight. (MV Smart)
was a statement of law at paragraphs whilst the ship is on time charter, then
The judgment concerns liability for
30.69-30.70 of the current edition of the he will generally have a duty to account
that unrecoverable freight.
text book Time Charters, which states
08 Signals / Issue 124: Summer 2021 / Legal www.nepia.com 09
DE NA
IMO’s carbon reductions
CA VI
RB GAT
SP ON ING
EC ISA
push power limits down IAL TIO
N
As part of the IMO’s short term measures to reduce greenhouse gas emissions,
the Energy Efficiency Existing Ship Index (EEXI) will come into force in 2023.
Shaft power limitation (SHaPoLi) or modifications in full consultation Charterers need to understand their rights
engine power limitation (EPL) is likely to with Class. and remedies if an owner fails to meet
be a popular choice for many shipowners For permanently derated main engines the EEXI requirements or maintain an
to meet the EEXI requirements. It is a with non-overridable power limits, we International Energy Efficiency
relatively simple and cost-effective understand PME will be 75% of the new Certificate (IEEC).
solution and should cause minimal de-rated MCR. Always seek confirmation The earlier this process is started and
disruption to the vessel’s operation. with Class and check for any NOx discussions between owners and
At MEPC 76 in June 2021, a resolution was recertification requirements that apply to charterers take place, the better!
adopted that provides guidelines on non-overridable arrangements.
compliance with the EEXI requirements
Challenges ahead
and the use of a power reserve in limitation
devices. Shipowners should be aware of Ships without acceptable documented
these recent developments and how it proof of their speed ~ power curve from Electronic power limitation systems: reserve. The same measures can be
affects power limitation arrangements. sea trials or model tests may have their Q&A with Lean Marine applied over an entire fleet, regardless
reference speed (VREF in the EEXI equation) To find out more about a specific of make and model of engines or
Overridable power limits determined by a statistical method which electronic power limitation system, we propulsion control systems.
Both SHaPoLi and EPL systems are imposes a penalty of 5% of speed or 1 asked Lean Marine, maritime experts
non-permanent, tamper-proof, and
approved, verified methods of power
knot, whichever is greater. In some cases,
this may result in more stringent
specialising in designing and
manufacturing automated fuel-saving,
Q How else can you use the
system data?
limitation. The former applies a limit to the requirements than the EEDI framework for performance management and
maximum shaft power and the latter to new ships. reporting solutions for vessels. A Data generated by FuelOpt™ and
the engine power. any information collected from other
A power reserve sits above the maximum
Vessel employment and charterparty
issues Q Have you seen an increase in sources is integrated into the smart
cloud-based performance
enquiries from shipowners
power limitation and is only to be used in Shipowners and operators should preparing their vessels for the management and reporting system,
the interests of safety or saving life at sea. consider the effect that power limitation EEXI statutory requirements? Fleet Analytics™.
It can only be overridden by the Master or
officer in charge of the navigational watch
will have on their current and future trading
patterns and whether additional or ACT NOW A Yes, indeed! Shipowners, operators, As well as providing voyage reports
and data for CO2 emission reporting
from the bridge without the need for entry alternative energy saving devices or and charterers are requesting more
into a machinery space (if possible). information on our propulsion requirements (e.g. EU MRV and
arrangements will be required to achieve 2023 optimisation system FuelOpt™ and IMO-DCS), Fleet Analytics satisfies the
The use of the power reserve must the EEXI requirements.
how it can help them comply with EEXI regulation which says that shaft
provide an alert and be properly Furthermore, they should consider
EEXI requirements. power data must be logged and prove
recorded in the vessel’s Onboard the impact of fouling or weather on compliance. It also provides
Management Manual (OMM). The power margins. Fuel efficiency, resulting in emissions aggregated fleet views, status insights
vessel’s Flag State (or recognised reduction, is a top priority for all of
Therefore, we urge our Members to act and allows in-depth analysis for
organisation acting on Flag State’s behalf) them and vessel efficiency enables
now and commence EEXI benchmarking onboard and ashore personnel for
and the competent authority of the them to achieve green shipping
of their fleet as soon as possible. This will voyage and operational optimisation.
relevant port of destination are to be targets whilst remaining competitive.
allow an owner to understand what The combination of FuelOpt™ and
notified without delay.
modifications or changes need to be Fleet Analytics™ can also assist a
Impact on power and safety made to achieve the EEXI requirements Q What advantages does your system shipping company in its efforts to
when they enter into force in 2023. give for power limitation over continuously improve its operation
A key parameter used to calculate EEXI is
limiting via the governor or other
the maximum engine power (PME), which is This will also help with addressing any Shipowners and fixed engine derating measures?
carbon intensity to comply with the
a percentage of the engine’s MCR – potential future charterparty issues. For operators should consider IMO Carbon Intensity Indicator (CII)
maximum continuous rating. example, power limitation could impact A In addition to being compliant with rating scheme.
the effect power limitation
speed and performance and vessel the SHaPoLi requirements, our
For overridable systems, the PME will be will have on their current
the lower of: description warranties; therefore, these
will require careful review. and future trading patterns and
propulsion automation system
dynamically optimises a vessel’s
Q What is the return of investment
(ROI) of your FuelOpt system based
83% of the limited installed power
Time charters that span 2023 and beyond
whether additional or alternative propulsion line in real-time by making on fuel consumption savings?
(MCRlim); or energy saving devices or
may need careful consideration and sure that the engine and propeller
75% of the original installed power (MCR) arrangements will be operate at optimal conditions based A Most customers are seeing an ROI in
require re-negotiation and perhaps
less than one year, however some of
Remember, classification societies may address matters such as who is required to achieve the on the commands or limitations set.
the larger ferries are reporting less
have certain rules regarding engine and responsible for the costs and time involved EEXI requirements It doesn’t require any modification to than three months.
shaft power limitation (e.g. ice class in carrying out any modifications. existing machinery and can be
vessels), so always carry out any overridden in an emergency, thereby By Mark Smith
enabling access to the engine’s power Loss Prevention Executive
10 Signals / Issue 124: Summer 2021 / Navigating Decarbonisation www.nepia.com 11
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A legal look at LNG
CA VI
In general, there is a need to resist Think about future-proofing RB GAT
attempts to borrow contractual the vessel, such as in terms of
SP ON ING
EC ISA
as a marine fuel
performance methodologies from readiness for the use of other fuels
IAL TIO
LNG carrier charters. As for the most and ensuring flexibility to deploy on
part these are not reflective of the different liner trades, such as fuel
reality of LNG-fuelled vessel operations
and to the extent that they are
tank capacities for LNG and
conventional fuels. N
inappropriate this is usually detrimental To the extent that a charterer may have
to an owner. rights to modify the design during
construction, ensure that it is not
The number of LNG-fuelled vessels is expected to increase in the coming years. Q How about bunker supply contracts? merely the knock-on CAPEX impact
Marcus Dodds of Watson Farley and Williams tells us what he thinks an LNG A The liability regimes under bunker that is addressed in the associated
charter, but also the OPEX impact and
contracts have tended to borrow from
future holds from a legal perspective. the LNG master sales and purchase
any technology related risks to the
reliability of the ship in service.
agreement (MSPA) terms. This is
because many suppliers source LNG Looking ahead to delivery, then I would
Liquefied natural gas (LNG) as a marine strainers, to ensure that their condition Such a review could then permit some under such terms and therefore look to add the need to secure the availability
fuel has already been adopted by a and mesh size suits their requirements. adjustment of the warranties to reflect keep back-to-back arrangements. and retention of engineers and
number of operators for its very low Otherwise, with X-DF type (Otto cycle) the actual performance of the ship. superintendents with relevant LNG
Typically, these contracts have
sulphur properties. But it’s also been engines, by design they protect Bear in mind that sea trials before experience (rather than merely
exclusions for ‘consequential loss’
identified by some as a viable interim themselves if issues develop in gas delivery will most likely be in ‘fuel oil’ training). Their experience will be
provisions that cover direct and indirect
solution to reducing greenhouse gas mode by increasing the quantity of mode and in light condition. critical until it is grown organically.
loss. However, the former is usually
emissions, at least until future fuels are pilot fuel injected or switching over to I suspect that we will also see issues limited to types of loss that reflect
developed further. ‘fuel oil’ mode. So, issues may arise if arise where the owner or master is earnings and profit, whereas in-
The LNG marine fuel infrastructure remains there is an adverse fuel price concerned about the risk of ‘rollover’. chartering another bunker vessel might By Mark Smith
nascent, and quantity or quality disputes or differential between LNG and fuel oil, This concern could arise (rightly or be better characterised, type wise, as a Loss Prevention Executive
claims have not yet materialised. But this or where the charterer’s environmental wrongly) when the quantity of remnant loss of use. and Marcus Dodds
may change as popularity increases and compliance strategy or ambition is LNG in a fuel tank is too large and the Partner at WFW
So, I expect that these sorts of
perhaps less diligent suppliers enter the predicated on the use of LNG. It will density of the fresh stem is too heavy
incidents may throw-up some
bunker market. probably only be in very rare by comparison to permit its loading for
interesting issues, at least where
circumstances that issues with fear of the risk of rollover.
Q&A with Marcus Dodds of WFW fault-based liability regimes are
inadequate Methane Number The parameters of rollover are well concerned; noting that, typically,
Q What sort of bunker quality disputes
may arise.
Provisions should be considered that
understood in the context of shoreside
tank storage, but less so on-board
personnel are covered by knock-for-
and issues do you expect to see for knock arrangements.
LNG fuelled vessels? address the possibility of extended ships which means that the same are
periods of idleness, as, depending on hard to define contractually. As such,
A In terms of quality, I think that the most
obvious issue will be sediment
the LNG containment system, there for the purpose of a time charter, and Q If you were ordering an LNG-fuelled
will be a long-term effect on the quality the circumstances where the owner vessel what should you look out for?
inclusion (by way of suspension) in the A A basic point, but a holistic approach is
of the LNG liquid as a consequence of should be entitled to refuse a stem,
LNG transfer. needed when selecting the
boil-off. rather unsatisfactory terms such as
This could be an issue for either of the “reasonableness” are used. characteristics of the fuel tanks,
main types of dual fuel engines,
perhaps more so the ME-GI type Q What contractual disputes are In the context of a large container ship
using a single membrane (or other
engines, and fuel handling systems.
Ensure you have people with LNG
you anticipating?
(Diesel cycle) engines as they inject experience providing oversight of the
atmospheric) type of LNG fuel tank,
the fuel mix at high pressure and the A My own expectation, basis the
this could create quite an operational relevant aspects of the design and
issue could manifest at the injectors. contracts that I have worked on but
hurdle, assuming that the vessel has construction. This includes not just the
A practical means of combatting this where the ships have not been
neither the equipment nor LNG fuel tanks, engines, fuel transfer
can be the use of fine mesh strainers in delivered yet, is that we might see
instrumentation to manage the and fuel handling systems, but also all
the transfer pipework and good some over-consumption claims when
rollover risk. Given the liner nature of the aspects that feed into compatibility
housekeeping in respect of the liquid operating in LNG mode.
the trade, the issue may be avoided by with LNG bunker vessels and the
phase pipes and fuel tanks on the The main reason being that some safety and practicality of the design
careful planning, but it could impact on
LNG-fuelled vessel post-build and owners have not sufficiently and location of the LNG bunker
the ability to re-deploy the ship on
after maintenance. recognised the differing characteristics transfer stations. Consider casualty
other lines.
The simple contractual means of of LNG versus fuel oils. By failing to management beyond the ambit of
Allocation of risk and responsibility for
addressing this (assuming equal
bargaining power) would be for the
recognise that whereas the range of
calorific values of fuel oils is now
bunker transfer operations would be a acceptable design risk assessment,
such as the ability to transfer LNG from
FIND OUT MORE
concern, particularly if the charterer is
owner to require the charterer to narrower than ever (as the sulphur the fuel tanks to receiving facilities or Click below to access further LNG
negotiating a right for its and/or the
procure that the bunkering vessels use content is so limited), that same range between fuel tanks. resources on our website
bunker vessel’s personnel to have a
these strainers at time of transfer; of values for LNG is by comparison Rollover Risks of LNG
right to supervise and/or intervene. If the yard does not have a significant
which can be done by a broad quite broad. This situation can be
Arrangements for and after scheduled track record of LNG specific Member Briefing: LNG as a marine
requirement that the charterer shall exacerbated by accepting the typical
dockings (including allocation of time newbuildings, then additional caution fuel - PDF Download
deliver product that is free of shipyard approach of valuing the
and costs in preparation) should also and level of oversight would be
particulate inclusion or a more specific calorific benefit of LNG as if it is
be considered, such as to ensure that applied. In my experience it’s all too
requirement that it meets cleanliness pure methane.
(if required) all LNG onboard can be easy for, say, non-cryogenic materials
standards required by the receiving If entering a time-charter with to slip through. Choosing a
vessel’s fuel gas systems. Although consumed or transferred ahead of
performance warranties lifted straight classification society with the LNG
perhaps in time there will be a arrival at the yard and, thereafter,
from the ship-building contract, then relevant experience at both office and
preference for an owner of a receiving addressing the gassing-up and
negotiating a review period post- site attendance levels is also a priority.
vessel to equip the same with its own cool-down time and costs.
delivery would be a key consideration.
12 Signals / Issue 124: Summer 2021 / Navigating Decarbonisation www.nepia.com 13
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RB GAT
Understanding SP ON ING
EC ISA
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the EU-ETS N
The European Union’s carbon trading scheme is expected to include shipping
from 2023.
Shipowners and
charterers should
review their contractual
arrangements in
good time prior to
implementation of the
EU-ETS to shipping.
The EU’s Emissions Trading Scheme Industry concerns If shipowners wish to pass the liability
(EU-ETS) is the world's largest carbon- A number of industry bodies and countries down per voyage, rather than claiming at
trading scheme and operates in all EU have voiced concerns at the inclusion of the time their liability has been verified and
countries and Iceland, Liechtenstein, and shipping into the EU-ETS, primarily citing becomes due under the EU-ETS (by latest
Norway. Starting in 2005, the scheme a preference for a global solution and how April of the following year), while the
focused on the power sector and Carbon trading emissions can be calculated by reference
a regional scheme could undermine the
manufacturing industry. But in 2019, the The EU-ETS works on the 'cap and trade' to the EU-MRV emission equation, a
IMO’s efforts on decarbonisation as well
European Commission (EC) announced principle. A cap is set on the total amount mechanism will need to be included in the
increasing the vessel’s administrative
its new European Green Deal which of greenhouse gases allowed to be charter party clause to ascertain the EUA
burden. To try and address this concern,
confirmed the inclusion of maritime emitted, which is reduced over time so price at the relevant time.
a review clause has been included to
transport into the EU-ETS. that total emissions fall.
ensure that the effectiveness and Members with FD&D cover should
On 14 July 2021, the European Carbon credits, called ‘EU Allowances’ practical application is reviewed after approach their usual contact to
Commission set out a package of (EUA), are purchased, with some allocated a certain number of years. discuss further.
proposals, including its proposal in respect for free, which can then be traded on the Under the EU plan, shipping will be
of the EU-ETS, which provides for the carbon market as needed. The limit on the added to the EU-ETS on a gradual basis Commercial risks and liabilities By Alvin Forster
inclusion of shipping under the EU-ETS total number of allowances available is from 2023, when shipowners must Shipowners and charterers should review Loss Prevention Executive
from 2023. The scheme is expected to controlled to ensure they have a value. surrender enough EUA to cover 20% their contractual arrangements in good
apply to emissions from vessels 5,000GT of their emissions. This is expected to time prior to implementation of the and Helen Barden
In its current form, the EU-ETS puts a price rise to 45% in 2024 and 70% in 2025. Senior Solicitor (FD&D)
and greater performing voyages with the EU-ETS to shipping.
on every ton of CO2 emitted, which is From 2026, shipowners will need to
purpose of transporting passengers or determined by the market. This is intended surrender EUA to cover 100% of their Compliance with the EU-ETS will, in the
cargo for commercial purposes and to act as an incentive for installations and emissions under the scheme. first instance, be the responsibility of the
includes ballast voyages. transporters to reduce their carbon ’shipping company’, which the EU defines FIND OUT MORE
The scheme applies to emissions as emissions, as they can sell their surplus Calculating emissions as “the shipowner or any other
Click here to visit our dedicated
follows: allowances. organisation or person, such as the
The EU Monitoring, Reporting and 'Navigating Decarbonisation'
manager or bareboat charterer, that has
Half of the emissions from ships Every year, each emitter will surrender Verification (EU-MRV) system for ships expertise area.
assumed the responsibility for the
performing voyages arriving at an EU the required number of EUA to cover its trading internationally to and from the EU
operation of the ship from the shipowner”
port from a non-EU port emissions. If they have any left over, is already in place and is expected to be
in accordance with the ISM Code.
they can keep them for future use or sell used as the basis for calculating emissions
Half of the emissions from ships
them on the carbon market. A failure to that will fall under the EU-ETS. However, given that it will be due to the
performing voyages departing from an
surrender the required allowances can charterer’s trade of the vessel that will
EU port and arriving at a non-EU port
lead to heavy financial penalties and, in result in the shipowner’s liability under the
Emissions from ships performing the event of failure to surrender sufficient EU-ETS, inclusion of a suitable clause in the
voyages between EU ports allowances for two or more consecutive charter party will be necessary to pass the
Emissions at berth in an EU port periods, potential expulsion from EU ports. liability down to charterers.
14 Signals / Issue 124: Summer 2021 / Navigating Decarbonisation www.nepia.com 15
Drill Bits: Steering failure Learning points
Following your risk assessment, ensure it
is safe to carry out the steering drill and
Establish and test communications with
the steering gear flat.
Confirm the gyro heading with the
check for navigational hazards. steering flat.
Next in our ‘Drill Bits’ series – where we help you get the most Locate and discuss the contingency
plan and posted procedures for
Follow the steering gear team’s
requirements to enable a smooth
out of your drills - we look at emergency steering drills. emergency steering.
Explain the importance of keeping
change to emergency steering.
Once switched to emergency steering,
accurate records of real events and drills. the Master should demonstrate how to
Another drill that perhaps doesn’t get enough thought or attention is emergency steering. give helm orders and show the team
Demonstrate how to confirm the
There may be a temptation to rush it through, perhaps performing a quick test then signing it off. But understanding the emergency BRIDGE TEAM heading on all gyro repeaters.
where the rudder angle indicators are.
steering system and knowing its correct use could prove critical. It relies not only on good knowledge of the system, but on teamwork Location: Bridge Allow the team members to give helm
Establish lookouts and explain their role
and communications. Group leader: Master orders to the steering gear team.
and how to report to the OOW/Master.
We look at the ‘drill bits’ that when brought together allows you to perform more effective and realistic drills, where everyone has a
better appreciation of each other’s roles and responsibilities.
The elements and learnings of each aspect The drill can be initiated by the activation
of the emergency steering drill as of an emergency signal, whereupon
discussed above can then be brought everyone locates to their designated
As always, complete a full risk assessment the steering gear flat/compartment. The together to perform a realistic drill. This point and carries out their specific
beforehand to make sure it is safe to two teams should rotate once they have brings the drill bits together to make a emergency duties.
conduct the drill. completed their first session to ensure power drill!
everyone gets an appreciation of the tasks A switch to emergency steering in a real
The risk assessment should include Now that everyone has an appreciation situation requires swift action by crew who
aspects such as weather conditions, in each location.
of each individual’s role, the emergency are knowledgeable and confident in the
identifying an appropriate speed and There should of course be a responsible steering power drill can be staged in a equipment and procedures. This can only
whether the vessel is in open waters with officer running each aspect of the drill and more realistic setting in the future. happen if people are well-drilled.
a suitably low level of traffic in the vicinity. each team should have at least one
qualified helmsman.
POWER DRILL
Confirm the operational status of all
related equipment and that maintenance is Remember, the steering flat can be noisy
PREPARATION up to date. so make sure ear protection is available. The debrief is one of the most important Remember to update your planned
Engines may require to be put on standby Due to the noise it may be better to elements of any shipboard task, and drills maintenance system with the test of the
and ready for manoeuvring. conduct some of the instruction from are no exception. This should be where we emergency steering, even if it is not due it
outside the steering flat. highlight lessons learned and how we can can be unscheduled maintenance.
Split the crew into two teams: one team
will locate to the bridge and the other to improve. Remember, next time could be
for real! By John Southam
Loss Prevention Executive
Don’t forget to highlight what went well
Establish communications with the performance requirements. At and give praise where it’s due. Take a
bridge - thoroughly test all means maximum ahead service speed, the record of what was discussed in the
of communications. rudder must be capable of putting the debrief, and, if required, send suggestions FIND OUT MORE
Locate and explain the compass/gyro rudder over from 35° on one side to 35° DEBRIEF to the company on how you feel
improvements could be made.
Click here to see the rest of our
repeater that will be used during steering on the other side and from 35° on either Drill Bits series.
from the helm position. side to 30° on the other side in not more
than 28 seconds. The auxiliary/
Check the condition of the gyro repeater
emergency steering gear must be
- is the liquid clear and free from bubbles
capable of putting the rudder over from
and debris? Is the card freely moving?
15° on one side to 15° on the other side in
Demonstrate the procedure for not more than 60 seconds at one half of
STEERING GEAR TEAM checking the gyro repeaters are aligned the maximum ahead service speed or 7
Location: Steering Flat with the bridge repeaters and master knots, whichever is the greater.
gyros - ensure that there are no
Group leader: Chief Engineer During testing, check that the system is
significant deviations.
operating properly, free from leaks and
Learning points Inform the bridge team you are ready to abnormal noises, and that the rudder
test the emergency steering and await angle indicators are all aligned.
Explain the steering gear and the
their instructions before changing over.
emergency steering arrangements: what Allow each person in the team to
type it is, its main components, main The Chief Engineer should demonstrate take over the steering duties and follow
and emergency power/energy sources, how to safely change over to emergency the helm instructions given by the
local and remote steering controls, steering mode. bridge team.
telemotor and how it works in both Test the emergency steering, Explain and test any steering gear
normal and emergency operation. communicating with the bridge to failure alarms.
Locate and discuss the posted perform steering orders. Demonstrate
When movements are complete, inform
instructions on how to engage the any alternative power sources and, if
the bridge team that you wish to switch
emergency steering. applicable, different control methods
back to normal steering – change when
and positions (e.g. push-buttons on
Locate the emergency steering position both parties ready.
individual power units, local wheel etc.).
for the helmsman. Ask if there are any questions!
Record the time taken to swing the
Locate and explain all the emergency
steering gear from hard over to hard over
communications arrangements
to ensure compliance with SOLAS
between the bridge and steering flat.
16 Signals / Issue 124: Summer 2021 / Loss Prevention www.nepia.com 17
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