An Analysis of Well-Accepted Slow Steaming Trends in Time Charterparties from an English Law Perspective
Ceren CERİT DİNDAR
Under time charterparties, the charterer’s order to the shipowner to sail at slower than the ship’s maximum speed has become popular in recent years. Although slow steaming of the ship during the charter has significant advantages for the time charterers, it creates particular risks from the shipowner’s perspective. The main objective of this article is to analyse the problems surrounding slow steaming orders given by the time charterer and to highlight concerns of the shipowner as to complying with the charterer’s order. The author also intends to show how incorporation of the BIMCO slow steaming clause into the time charter can assist in reducing the shipowner’s concerns in this regard.
Time charterparties, the time charterer’s order to slow steam, slow steaming of the ship, BIMCO slow steaming clause.
Zaman çarterlerinde, çartererin gemi sahibine geminin maksimum hızından daha yavaş seyir etmesine ilişkin talimatı son zamanlarda oldukça yaygınlaşmaya başlamıştır. Geminin çarter süresince yavaş seyrinin zaman çartereri açısından çok önemli avantajları olmasına karşın, bu durum gemi sahibi açısından riskli bir durum ortaya çıkartmaktadır. Bu makalenin asıl amacı zaman çartererinin geminin yavaş seyrine ilişkin talimatının etrafındaki problemleri incelemek ve gemi sahibinin çartererin bu talimatina uyarken yaşadıgı çekincelere dikkat çekmektir. Ayrıca yazar BIMCO yavaş seyir klozunun zaman çarteri sözleşmesine eklenmesinin gemi sahibinin bu konudaki çekincelerinin azalması konusunda nasıl yardımcı olacağını göstermeyi hedeflenmektedir.
Zaman çarteri sözleşmesi, zaman çartererinin yavaş seyir talimati, gemilerin yavaş seyri, BIMCO yavaş seyir klozu.
I. NEW PRACTICE OF SLOW STEAMING IN TIME CHARTERPARTIES
In 2008-2009, while a sudden decrease occurred in international trade because of the global economic downturn and this in turn affected demand for transportation of goods, there was an increase in shipping fleet capacity due to delivery of the ships ordered in earlier years. This gap between supply and demand has resulted in a decrease in terms of freight and hire rate in the charter market1. On the other hand, in the meantime, bunker prices have increased2. To deal with this situation, participants in the shipping trade have adopted a new practice, known as ‘slow steaming of the vessel’. Slow steaming means a deliberate reduction in the ship’s speed during a voyage. This practice actually works to decrease the effects of the economic crisis in two ways. Firstly, as a result of slow steaming of the ship, the trading time of the ship continues more than when the ship proceeds with full capacity. This absorbs oversupply tonnage and prevents the ships from layoff. Secondly, slow steaming reduces bunker consumptions of the ship3. Under normal conditions, when the ship proceeds under slow steaming, it burns less fuel. Therefore, slow steaming helps the participants in the shipping trade to save fuel during trading and to considerably cut their bunker expenses. The practice of slow steaming has become especially popular with regard to time charterparties.
The time charter is a contract for the use of the ship and the crew commercially for a particular period of time in consideration of payment of hire. In contrast to the voyage charter, under a time charter, the charterer is a person who ordinarily undertakes to supply and pay for all bunkers the ship needs throughout the charter period4. Therefore, it is important for him to save fuel and keep the bunker expenses to a minimum during the charter. This makes slow steaming of the ship more attractive for the time charterers, especially at a time that when bunker costs are rising. However, the charterer’s order to slow steam is not an easy one to be followed by the shipowner under English law.
Under a time charter, while the master is bound to comply with the charterer’s instructions as regards employment, he is obliged to refuse the instructions which affect navigation or safety of the ship5. This is a well settled rule in English law. Differences between employment and navigation are described by Lord Hobhouse in The Hill Harmony with following words, “‘Employment’ embraces the economic aspect - the exploitation of the earning potential of the vessel. ‘Navigation’ embraces matters of seamanship”6. In view of this explanation, it can be said that since the charterer’s order to slow steam for reducing bunker consumption of the ship embraces an economic aspect, in an ordinary case it must be regarded as a lawful employment order (unless the order affects safety of the ship, cargo and crew) and therefore, the master must follow the order. However, slow steaming orders by the charterer have been met with concerns by shipowners.
