Review Of The Shipping Conditions For Sales Of Australian Coal Basis FOBT Newcastle
Laycan Fixation and Vessel Nomination Notice
The buyers shall give to sellers 30 days` notice of the 10 days` laycan spread within which the buyers propose to present the vessel for loading the coal cargo. If the sellers will accept the laycan, then not later than 10 days prior to the first day of the laycan, the buyers shall have to nominate the vessel and declare the quantity of cargo required to be loaded with the 5% contractual tolerance.
Vessel Requirements
The nominated vessel must be single deck, self-trimming bulk carrier, gearless or geared, but the geared vessels, i.e. Handysize and Handymax vessels, will be accepted by the terminal operators provided that their cranes will be positioned in such a way so as not to impede the normal operation of the shiploaders and thereby reduce the loading rate.
The vessel must be classed Lloyd`s 100A1 or equivalent and be described as "Bulk Carrier" in the Class Certificate.
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.
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).
The vessel must be less than 18 years old.
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.
Size Restrictions
- at Kooragang Terminal: minimum 70,000 tonnes DWT
maximum 210,000 tonnes DWT
maximum LOA: 300 metres
maximum Beam: 50 metres
- at Carrington Terminal: minimum 30,000 tonnes DWT
maximum 180,000 tonnes DWT
maximum LOA: 275 metres
maximum Beam: 47 metres
- at Newcastle Coal Infrastructure Group Coal Terminal: minimum 35,000 tonnes DWT
maximum LOA: 300 metres
maximum Beam: 50 metres
The vessel`s nomination is subject to acceptance by the port operators Port Waratah Coal Services Ltd., in case of vessels nominated to load at Kooragang Terminal and/or Carrington Terminal, and Newcastle Coal Infrastructure Group, in case of vessels nominated to load at Newcastle Coal Infrastructure Group Coal Terminal.
The port operator Port Waratah Coal Services Ltd. uses the RightShip Vetting System to determine whether to accept or reject the vessel nomination. To obtain RightShip approval, the nominated vessels must receive a minimum three star rating level. The nomination of vessels over 18 years of age is not acceptable because the RightShip Vetting System downgrades them automatically to a two star rating and require their physical inspection.
ETA Notice
If the vessel nomination is accepted by the terminal operators, the buyers will charter the vessel and then give the ETA Notice at least 14 days prior to the vessel`s ETA at the Port of Newcastle.
ETA Updates
The buyers must ensure that the vessel`s Master will give through the port agents the ETA notices at 10/7/5/3/2 days, 24 hours, 12 hours and 6 hours before the vessel`s ETA at the pilot station. In the event that the Master fails to give any of the above-mentioned notices, the sellers will be allowed to add 24 hours extra to the laytime.
Conditions For The Vessel Substitution
The buyers may substitute the originally nominated vessel provided that:
- they give the vessel substitution notice to the terminal operators at least 5 days before the ETA of the originally nominated vessel;
- the substitute vessel will not arrive earlier than the ETA of the originally nominated vessel;
- the substitute vessel complies with the contract requirements in respect of type, size and de-ballasting capacity to be able to load the cargo quantity ordered by the buyers within the contractual time allowed for loading;
- the vessel`s demurrage rate is not higher than that of the originally nominated vessel.
The Submission Of The Vessel`s Loading Plan
At least 10 days prior to the vessel`s ETA, the vessel`s Master must provide through the vessel`s agents the following information:
- the vessel`s loading plan and hatch loading sequence based on loading with one shiploader;
- the exact quantity of coal required to be loaded based on the vessel`s loading plan;
- arrival and departure drafts.
In case of the Master`s failure to provide the vessel`s loading plan and the exact quantity of coal required to be loaded at least 10 days before the expected date of vessel readiness to load, the sellers shall only be responsible to load the minimum quantity stated in the vessel`s nomination notice.
Conditions For The Vessel Presentation For Loading
The vessels arriving to load coal in bulk at the Port of Newcastle must comply with the regulations of the Australian Maritime Safety Authority and requirements of the port operators, Port Waratah Coal Services Ltd., respectively Newcastle Coal Infrastructure Group.
The vessel must present for loading with the cargo holds clean, dry, empty, free of waste material and remnants of previous cargo and with the draught marks legible.
The inspection of holds shall be made by a qualified marine surveyor appointed by the sellers. The marine surveyor shall certify the cleanliness of holds by issuing the Hold Cleanliness Inspection Certificate. If the vessel has previously carried potential contaminants such as phosphates, sulphur, cement, salt, potash or iron ore, the marine surveyor inspecting the holds must certify that the holds are clean and free of contaminants.
If the vessel is an OBO (Ore/Bulk/Oil) Combination Carrier which has previously carried petroleum products, the Master can tender NOR only upon the vessel passing the inspection of Australian Maritime Safety Authority and presenting a Gas Free Certificate issued by a qualified marine chemist stating that the vessel`s holds are free of contaminating gases and odor.
NOR
The vessel`s Master shall tender NOR upon the vessel`s arrival at the outer anchorage or pilot station of the Port of Newcastle at any time, day or night, including Saturdays, Sundays and Holidays, provided that the vessel has obtained the ISPS clearance and is in all respects ready to load coal in bulk.
The 12 hours` Notice time shall start to count from the time of acceptance of NOR by the terminal operators provided that the vessel has arrived within the agreed laycan not prior to the expiry of the 14 days` ETA pre-advice period and is in all respects ready to load the coal cargo.
The vessel shall be considered ready in all respects for loading if:
- she has obtained the ISPS clearance prior to the NOR tendering;
- she is not subject to an arrest order;
- she presents for loading in a seaworthy condition;
- she passes the holds` inspection after berthing.
If the Master tenders NOR before obtaining the ISPS clearance, the NOR shall be invalid and the Master will have to tender a new NOR upon receiving the ISPS clearance.
If the vessel is arrested or attached at berth prior to the commencement of loading, the NOR shall be deemed invalid and the Master will have to tender a new NOR only after the issuance of the release warrant by the Court.
If, after berthing, the vessel is found by the port authorities not ready in all respects to load the coal cargo, the vessel`s NOR shall be invalid and the Master will have to tender a new NOR after the vessel is in fact ready all respects for loading.
If the marine surveyor rejects the holds, the Master may tender a new NOR only after he obtains the Hold Cleanliness Inspection Certificate from the marine surveyor.
If the vessel is arrested or attached at berth prior to the commencement of loading, the sellers` loading obligation will be suspended until the Marshal will release the vessel from arrest. In such case, the Master will have to tender a new NOR after the vessel is released from arrest.
Commencement Of Laytime
The commencement of laytime shall depend not only on the time when the buyers` vessel tenders valid NOR but also on the buyers` compliance with other contract requirements.
One of the contract requirements that may affect the commencement of laytime is the requirement to present the vessel ready in all respects for loading within the agreed laycan, after the expiry of the ETA pre-advice period.
The port operators Port Waratah Coal Services Ltd. and Newcastle Coal Infrastructure Group schedule the coal shipments in function of the vessel`s laycan and ETA at the port of Newcastle. Therefore, the commencement of laytime will depend not only upon the time when the vessel is ready in all respects to load and tenders valid NOR, but also on whether the NOR is tendered within the laycan and after the expiry of the ETA pre-advice period.
If the vessel arrives at the loading port and tenders valid NOR within the agreed laycan after the expiry of the 14 days` ETA pre-advice period, the laytime will commence to run at 12 hours after the port operator`s acceptance of the NOR, unless the port operator commences loading sooner in which case the laytime will commence to run from the time of commencement of loading.
If the vessel arrives at the loading port and tenders valid NOR before the first day of the agreed laycan, the NOR shall not become effective before 00:00 hours on the first day of the agreed laycan and the 12 hours` Notice time shall commence to run from 00:01 hours on the first day of the laycan period.
If the vessel arrives at the loading port and tenders valid NOR before the expiry of the 14 days` ETA pre-advice period, the NOR shall not become effective before 00:00 hours on the fourteenth day after the day of nomination and the 12 hours` Notice time shall commence to run from 00:01 hours on the fourteenth day after the day of nomination.
If for any reason, including the vessel`s late arrival or failure to pass the holds` inspection, the vessel does not tender valid NOR before the end of the cancelling day (the last day of the laycan period), the berthing of vessel after the laycan shall be subject to the consent of the port operator and the laytime will commence to run when the loading starts.
The commencement of laytime will also be in function of the Master`s compliance with the deadline imposed by the port operators for the submission of the vessel`s loading plan. If the Master fails to provide the vessel`s loading plan to the port operator at least 72 hours prior to the vessel`s ETA, the vessel shall not be included in the berthing programme on the expected readiness date and the 12 hours` Notice time shall not commence to run before the 72 hours` time limit from the submission of the vessel`s loading plan has elapsed.
In case of the vessel substitution, the commencement of laytime will also be in function of the buyers` compliance with the 5 days` time limit imposed by the port operators for the submission of the substitution notice. If the substitute vessel arrives and tenders NOR before the expiry of the 5 days` notice period, the NOR shall not become effective before 00:00 hours on the fifth day after the day of substitution and the 12 hours` Notice time shall not commence to run before 00:01 hours on the fifth day after the substitution notice date.
The laytime shall cease to count at the time when the loading, trimming and final draft survey have been completed or when the cargo documents required to effect the Customs clearance are on board, whichever is the later.
Loading Conditions
The coal cargo shall be delivered free on board the vessel spout trimmed. Any extra trimming (beyond spout trimming) necessary due to the vessel`s construction shall be for the buyers` account and any time lost thereby shall not count.
Cargo Weight Determination
In case of full cargoes, the weight figure used for invoicing and issuance of Bills of Lading shall be determined by a marine surveyor based on the vessel`s draft survey before and after loading.
In case of parcels provided by different shippers or different coal brands that are loaded separately as distinct parcels, the weight figures used for invoicing and issuance of Bills of Lading are based on the conveyor belt weightometer readings which are considered more accurate than the draft surveys of a partially loaded vessel.
by Vlad Cioarec, International Trade Consultant
This article has been published in Commoditylaw`s Coal Trade Review Edition No. 4.