A draft dilemma

A ship was proceeding to the discharge port. The agent at the discharge port advised the shipper that the maximum draft was 40ft. As this ship was just under 41ft it made an interim call to unload some cargo.

The ship agent subsequently received a claim from the shippers. They alleged that the information was incorrect and ships with drafts in excess of 40ft could still call at the port but with two pilots onboard instead of one. As a result, the shipper said the agent should have been aware of this possibility and claimed US$250,000 for the costs of the wasted call and transporting the excess cargo.

The agent could not find the provision on the local pilots’ association’s website which gave a maximum draft of 40ft. They asked the shipper where they got the information from. The shipper pointed out there was a link on the agent’s own website to an article stating that ships over 40ft can call providing there are two pilots onboard. The agent contacted the local pilots’ association who confirmed it was possible to call with a draft of 41ft and that the information was on their website, just not easy to find. The agents had incorporated standard trading conditions which limited their liability to ten times their agency fee. This amounted to US$36,500. This sum was accepted by the shipper and ITIC reimbursed the agent.

This claim shows how important it is for terms and conditions to be incorporated into all business dealings. ITIC’s terms and conditions, and guidelines for incorporating these, can be found on the ITIC website.