Charterers who had entered a COA asked the shipbroker if they could increase the volume of cargo which had already been booked. The broker, who was working from home, contacted the owner via SMS to ask if there was additional space available on the ship, as charterers might want to increase the volume depending on how much space was available.

The owner responded “max load 18k”, which the broker passed on to the charterers, who had already booked 15,000mt. The charterer then proceeded to sell an additional 2,500mt of cargo to their client.

Once the sale was concluded and the ship nominated, it transpired that there was no extra space available. It seemed in fact that the extra space was never available.

As the charterers were committed to a sales contract to deliver the cargo they had no option but to book the extra cargo via another ship on the spot market. The freight rate was approximately USD 80,000 higher than it would have been under the COA.

The charterers held the owner responsible, but the owner rejected the claim on the basis that there was no formal offer/option given for the additional space. Charterers then looked to recover the additional cost from the broker, as the broker did not make it clear that they did not have a firm option to ship the additional cargo.

The matter was ultimately concluded with each party absorbing some of the costs. The broker’s contribution was USD 34,000, which was reimbursed by ITIC.

It is important to ensure that all parties have the correct information. If you, as the broker, are not clear as to what has been agreed, it is unlikely that the other parties will be any clearer. Therefore a short message, in writing, should be sent to avoid any incorrect assumptions.

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