The Vessel Requirements In The Coal FOB Sale Contracts
Coal is transported by sea with three types of vessel:
- Conventional Bulk Carriers;
- OBO (Ore/Bulk/Oil) Combination Carriers;
- Box Shaped Bulk Carriers.
The Conventional Bulk Carriers are single deck vessels with heptagonal shaped holds which prevent the empty spaces from developing in the upper edges of the holds. They are the most economical type of vessel because their holds can be filled with coal without the need for any trimming of the cargo other than the spout-trimming by the shiploader. Hence, these type of holds are referred to as "self-trimming holds" and the conventional bulk carriers are referred to as "self-trimming bulk carriers".
The OBO (Ore/Bulk/Oil) Combination Carriers are vessels designed to carry both dry bulk cargoes and oil cargoes. They are single deck vessels with self-trimming holds but the access of shiploader to the holds could be difficult due to the small hatch openings. Hence, they usually require extra trimming in addition to spout trimming and their loading takes longer than the loading of a conventional bulk carrier.
The Box Shaped Bulk Carriers are single deck vessels with box shaped holds. The loading of coal in bulk into the box shaped holds takes longer and costs more than the loading into the self-trimming holds of the conventional bulk carriers, because after loading the upper edges of the box shaped holds remain unfilled and therefore, it is necessary the trimming of cargo, i.e. levelling of coal cargo by moving it to the upper edges of the holds to reduce the risk of shifting during the voyage. This is the reason why the box shaped bulk carriers are referred to as "non-self-trimming bulk carriers".
Amongst the vessels with box shaped holds are: the open hatch gantry crane bulk carriers, semi-open hatch gantry crane bulk carriers, open hatch jib crane bulk carriers, semi-open hatch jib crane bulk carriers. These vessels are referred to as "Box Shaped Bulk Carriers".
The operators of major coal terminals, i.e. Kooragang and Carrington Coal Terminals in the Port of Newcastle, Dalrymple Bay Coal Terminal in the Port of Hay Point, Richards Bay Coal Terminal, Neptune Bulk Terminals and Westshore Terminals at Roberts Bank in Vancouver, Norfolk Southern`s Lamberts Point Coal Terminal at Norfolk, DTA Coal Terminal at Newport News, accept only single deck, self-trimming bulk carriers because they do not provide mechanical or manual trimming.
These coal terminals have modern loading installations that dump and distribute the coal evenly into the vessel`s holds at high speed. The coal is evenly trimmed by the shiploader spout which is directed to all corners of the holds to avoid any void spaces. Hence, the delivery of coal at these terminals is made on FOB spout-trimmed basis.
Another requirement concerning the vessel to be nominated it is that related to the vessel`s de-ballasting capacity. The nominated vessel must have sufficient de-ballasting capacity to enable the loading terminal operator to achieve the maximum loading rate applicable to that size of the vessel without the interruption of loading, i.e. the ballast water must be discharged at a rate which prevents the interruption of loading or at least it does not require the interruption of loading in excess of the time permitted by the terminal operator.
If the vessel sails under a Flag of Convenience, the vessel must have on board a valid ITF Blue Card to evidence the fact that the minimum terms and conditions of employment of the crew of the vessel are approved by the ITF (International Transport Workers` Federation).
Another requirement concerning the vessel to be nominated it is that the nominated vessel must have all the IMO required certificates valid, including a Certificate of Fitness for the Carriage of Solid Bulk Cargoes listing coal as a permitted cargo, a Certificate of Fitness for the Carriage of Dangerous Goods, the Bulk Carrier Booklet endorsed by the Flag State Administration, the International Ship Security Certificate, Maritime Labour Certificate, Safety Management Certificate and the Document of Compliance with the ISM Code.
In case of sale contracts providing for delivery of coal basis FOBT at an open sea anchorage in Kalimantan such as Taboneo Anchorage, Muara Satui Anchorage or Tanjung Anchorage, the buyers are required to nominate geared bulk carriers to allow the sellers to load the coal from barges using the vessel`s cranes and grabs operated by local stevedores.
For the coal cargoes in the range of 30,000 – 60,000 metric tonnes, the nominated vessel must be equipped with 4 cranes with a lifting capacity (Safe Working Load) of 30 metric tonnes each, fitted with 4 electro – hydraulic grabs with a capacity of 10 – 12 cubic meters each. The vessel`s gear certificates (i.e. certificate of test and thorough examination of lifting appliances, certificate of test and thorough examination of derricks used in union purchase, certificate of test and thorough examination of loose gear, certificate of test and thorough examination of wire rope) must be valid and up-to-date. The vessel`s gears must have been examined and certified by a surveyor to be in safe working condition at least once in the last 12 months preceding the laycan at loading port.
The operators of Australian coal terminals, i.e. Port Waratah Coal Services Ltd. and Dalrymple Bay Coal Terminal Pty Ltd., and the Indonesian shipper PT Arutmin use the RightShip Vetting System to determine whether to accept or reject the vessel nomination.
RightShip uses three risk categories on a five star rating scale in the assessment of nominated vessels:
1. Acceptxxx
A three, four or five star rating means that the vessel is an acceptable risk with no further query required.
2. RightShip reviewxx
A two star rating means that RightShip must make a further review of the risk profile of the vessel, including the physical inspection of vessel. The two star rating is given to the vessels over 18 years of age.
3. Further Investigation requiredx
A one star rating means that RightShip needs to conduct a more detailed review of the vessel and owners, including the physical inspection of vessel.
by Vlad Cioarec, International Trade Consultant
This article has been published in Commoditylaw`s Coal Trade Review Edition No. 4.