Safety Management System (“SMS”) failure
An inspector of CARB - California Air Resources Board (the clean air agency of the state of California) – boarded a ship in July 2011 managed by an ITIC Member at the Los Angeles Terminal.
Crane costs confusion
A ship agent was contacted by charterers. The charterers asked the agent to obtain a quote from a local port on how much it would cost to discharge two parcels weighing 70mt using the shore crane. The agent contacted their usual sub-agent in the port, by telephone, and were given an estimate of US$2,750 per shift, so a total of US$5,500. This estimate was passed by the agent to the charterer, and on this basis the cargo was fixed.
Operators of a passenger and ro-ro ferry service appointed a naval architect to design a 45m landing craft ferry. The design was to be based on that of an existing vessel operated by the company.
Turbo technical trouble
An air charter broker received a request to act for a principal who was seeking to charter an aeroplane for a flight two days later from Scotland to Morocco. The broker reviewed the available options for the principal and recommended the use of a small business jet which would offer a short flight time and enhanced comfort. However, the principal wanted a cheaper alternative and the broker instead looked to source a small turbo-prop for the flight.
A naval architect entered into a contract with a shipyard to design the structure and access arrangements for new lifeboats and their davits to be fitted to a specific vessel.
A firm of agents was asked to book a tractor for shipment from Europe to the Middle East. They quoted a rate based on the weight and realised after the booking was confirmed that they should have quoted a rate based on the cubic meters of the vehicle. The difference was a freight amount of US$12,500. The agents negotiated with the shipping line, who agreed to reduce the amount they required by US$5,000. ITIC paid the remaining amount.
Boom and bust
A liner agent booked a container of calcium hypochlorite to be moved from a port in the Middle East to Europe. Calcium hypochlorite is a dangerous cargo, with an IMO classification of 5.1. The shipping line had sent clear instructions to the agent prohibiting the loading of this cargo, along with a number of other dangerous cargoes. The agent appeared to have overlooked this instruction.
Commission collection in court
A ship broker had entered into an exclusive commission agreement with a ship owner, which provided for commission of 5% to be paid to the broker on the sale of any of their fleet of vessels even if sold through another broker. The broker heard that two of the owner’s ships had been sold through another broker for EUR 30,300,000 each. The ship owners refused to pay the ship broker’s commission of EUR 303,000. Lawyers were appointed and the commission claim was heard before the First Instance Court in January 2013. The court found for the ship broker and awarded the commission of EUR 303,000 plus interest and costs.
ITIC Post fixture Clause
ITIC has recommended a post fixture clause for brokers to place at the end of recap messages. The following wording was endorsed by FONASBA at its annual general meeting in Gothenburg in October 2014:
A general guide to ship managers’ undertakings – an ITIC e-learning seminar
ITIC’s ship management Members have expressed concern when they are being asked to sign letters of undertaking. As such, ITIC have often been asked to provide advice and commentary. To answer some of the more general questions, ITIC has produced an e-learning seminar to highlight some of the issues to consider.