The International Monetary Fund expects global growth to remain moderate for the rest of the year. This means that even with the dip in oil prices since last year, the shipping industry will not see a quick recovery anytime soon, even with the substantial savings from low bunker prices.
Hence, to ensure that they remain competitive, ship owners and operators will need to continue looking for all ways to reduce operational costs and ensure that they are getting the right quantity and quality of fuel that they have paid for.
Proper collection and documentation of fuel quality
Collecting representative fuel samples from each bunkering and good routine record-keeping onboard the vessel are important not only for statutory compliance but also for bunker dispute resolution.
Point of custody transfer and sampling method
Reviewing the supplier’s terms and conditions, charter party agreements and local requirements to establish the location of legal and binding commercial samples is of utmost importance because bunkering sampling practices may vary according to supplier, country or even port.
The sale and purchase agreement between the fuel buyer and seller should state clearly that the sample taken at the agreed point of custody transfer and using the specified sampling method, is the representative and binding sample for the delivery. The point of custody transfer, which refers to the physical position where the supplier passes over custody of the bunker to the receiving vessel, must be defined and mutually agreed.
A well-recognised sampling method is to collect a continuous drip sample taken – throughout the bunkering period – from a line sampler installed at the receiving vessel’s manifold.
The sale and purchase agreement should have instructions on the joint witnessing of the onboard sampling procedures, which includes counter-sealing the sampler and the sample container by the supplier, ship’s crew and quantity surveyor.
However, the chief engineer who acts on behalf of the ship operator, must fully understand the documentation process and the liability of signing a sample label. A fuel specimen might be pivotal to a claim amounting to hundreds of thousands of dollars, especially where extensive engine repairs, parts replacements, downtime and off-hire are involved.
The witnessing form can serve as contemporaneous evidence should a fuel quality dispute arise later. A jointly witnessed, correctly drawn and representative sample facilitates dispute resolution through factual, statistical and logic evidence.
Proper documentation with Bunker Delivery Note
Clause 18 of MARPOL annex VI states that all fuel oil taken by a ship must be accompanied by a Bunker Delivery Note (BDN) and a specified format of mandatory information, The BDN, which includes a signed declaration by the supplier that his fuel conforms with MARPOL Annex VI regulations 14 and 18, must be kept onboard for inspection and retained for a period of three years after the fuel has been delivered.
Bunker surveys for ironclad quantity protection
Since bunkers are sold by weight but delivered in volume, the presence of a professional bunker surveyor is needed to ensure that the correct quantity is delivered. A thorough and experienced surveyor prevents the supplier from employing “tricks of the trade” to cheat buyers because an investigative remaining-on-board survey entails finding hidden bunkers as well as the investigation of shortages or alleged “cappuccino” during bunkering operations.
To ensure impartiality, quantity measurement and inspection services, Veritas Petroleum Services (VPS) surveyors are not offered incentives for finding hidden bunkers. Detailed reports and findings by bunker surveyors have been pivotal in helping customers make claims during a dispute.
Mass Flow Meter
With Mass Flow Meter (MFM) technology gaining traction worldwide, there is a need for a qualified surveyor to verify that what is reflected on computer screens corresponds accurately to the actual results. He must ensure that a MFM is operationally ready by cross-checking the seals and all measurement needs because once the delivery starts, it cannot be undone.
Surveyors will look at the entire job holistically and spot any inconsistences or errors and advise the vessel’s staff accordingly, and assist in quantity dispute resolution using MFM deliveries.
There are ship owners who still insist on taking manual measurement onboard the bunker tanker before and after the deliveries although the MFM figures are binding This is not surprising as the receiving vessel seeks to verify what it has received.
Testing to determine fuel quality
During a bunkering dispute, the buyer and seller will test the jointly witnessed binding sample from the original source to determine the actual fuel quality. Veritas Petroleum Services recommends the full testing of the binding sample at an independent IS0-accredited laboratory.
A complete and accurate analysis report issued by an ISO 17025 accredited laboratory using correctly calibrated test equipment for each fuel parameter will provide verification for purchase specifications.
As an industry best practice, proper documentation also increases the credibility of any claim.
Staying ahead of the curve with regular reviews and prudence
Shipowners and operators should regularly review their sales and purchase contracts or charter party agreements to ensure adherence to stipulated fuel purchasing specifications and statutory requirements, and the selection of fuel grades suitable for the vessel’s fuel treatment plant and machinery installation.
But they should exercise prudence pursuing fuel quality disputes. In cases where the off-specification does not pose an operational risk – for instance, when viscosity marginally exceeds the ISO 8217 maximum limit – debunkering could be counter-productive and costly.
Though the main concern of a ship’s crew when refuelling is to ensure safe and efficient bunkering, when in doubt, ship operators should always consult fuel management service providers to consider the best possible solutions.
Contributed by Theo Heil, BQS Process and Quality Manager at Veritas Petroleum.