i-law

Voyage Charters

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Chapter 46

Two or More Ports Counting as One

15. TWO OR MORE PORTS COUNTING AS ONE. To the extent that the freight rate standard of reference specified in Part IF hereof provides for special groupings or combinations of ports or terminals, any two or more ports or terminals within each such grouping or combination shall count as one port for purposes of calculating freight and demurrage only, subject to the following conditions:
(a) Charterer shall pay freight at the highest rate payable under Part IF hereof for a voyage between the loading and discharge ports used by Charterer.
(b) All charges normally incurred by reason of using more than one berth shall be for Charterer’s account as provided in Clause 9 hereof.
(c) Time consumed shifting between the ports or terminals within the particular grouping or combination shall not count as used laytime.
(d) Time consumed shifting between berths within one of the ports or terminals of the particular grouping or combination shall count as used laytime.

“Freight rate standard of reference”

46.1 The parties may agree upon their own rate of freight, but the usual practice, especially when there are a large number of loading and discharging port options, is to adopt a freight rate standard of reference, such as Worldscale which is referable to voyages between designated ports of the “standard vessel” of 75,000 mt dwt and is recalculated annually.

Groupings or combinations of ports or terminals

46.2 The clause applies to the extent that the freight rate standard of reference upon which the parties have agreed provides for special groupings of ports or terminals.1 Worldscale does so provide, and Part B of the Preamble to Worldscale gives a list of port and terminal combinations, and states that “Any two or more places in any one of (these) combinations … are to be regarded for freight and demurrage purposes as berths within a single port”. Clause 15 reflects this provision.

“For purposes of calculating freight and demurrage only”

46.3 The clause applies only to the calculation of freight and demurrage. It does not, for example, entitle the charterer to order the vessel to a port which, in the absence of the clause,

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would fall outside the scope of his powers of nomination. Thus, if the charter provides for loading at a single port, the charterer is not entitled to order the ship to load at two ports, even if they are deemed, under Worldscale Terms and Conditions, to be a single port. 46.4 The clause has no counterpart in the STB Voy form of charter, presumably on the grounds that the matter is equally well left to the provisions of Worldscale itself, and the ordinary charter terms.

Sub-clause (a) – rate of freight

46.5 It is not clear why this sub-clause refers to “the highest rate of freight payable under Part IF”. It obviously cannot mean that the carrier can take advantage of a two-or-more-port freight increment specified in Part IF. The intention may be that if Part IF provides for a twoor-more-berth freight increment the charterer pays the amount of freight appropriate to the largest number of berths.

Sub-clause (b) – expenses of using more than one berth

46.6 Worldscale Terms and Conditions make clear that they have no impact on responsibility for shifting expenses, and this sub-clause deals with the expenses of shifting by imposing all such expenses upon the charterer, as long as they represent normal expenses. Clause 9 provides that these expenses are for the charterer’s account when the shifting takes place between berths in a single port, and clause 15(b) effectively extends the provisions of clause 9 to the case where the shifting is between places which are not actually within the same port, but are deemed to be so under the port grouping or combination or provisions of Worldscale. The only difference between the provisions of clauses 9 and 15(b) is that, under the latter, abnormal expenses fall upon the owner. Thus, if shifting expenses are increased by some abnormal occurrence (e.g., if tug assistance is necessitated by abnormally strong winds) the expense falls upon the charterer if the berths are actually in the same port (clause 9), but upon the owner if the berths are not within the same port, even though deemed so to be under Worldscale.

Sub-clauses (c) and (d) – time spent in shifting

46.7 In contrast to the expense of shifting, which normally falls upon the charterer in both cases, the question whether the charterer is responsible for time spent in shifting depends entirely upon whether the shifting is between berths which are actually in the same port, or between berths which are not actually in the same port, although deemed to be so under Worldscale. In the former case, time runs during the shifting operation, by virtue of clauses 9 and 15(d); in the latter case, clause 15(c) provides that time shall not run. The logic of this distinction is not apparent. However, the exclusion from laytime of shifting time under clause 15(c) does not apply when the vessel is already on demurrage, as held by Mocatta J. in The Tsukuba Maru,2 which case was concerned with the provisions of clauses 6 and 7 whereby certain periods are excluded from used laytime, but it would appear equally applicable to clause 15(c). Indeed, were this not the case, clause 15(c) would effectively nullify the opening provision of the clause, that the two ports shall count as one for the purpose of calculating demurrage.

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U.S. Law

Shifting time

46A.1 In The Mount Vernon Victory,3 the charterer contended that berths at Los Angeles, Long Beach, and Wilmington were “ports or terminals” within one grouping known as “Los Angeles,” and that time shifting between these berths did not count as used laytime pursuant to clause 15(c). The panel disagreed and held that shifting time counted as used laytime, emphasizing that clause 15 is entitled “Two or more ports counting as one”; clause 15(c) relates to “shiftings between ports or terminals within the particular grouping (of ports) or combination (of ports)”; the charterer paid freight based on a single port loading at Los Angeles; and the American Tanker Rate Schedule considered the vessel’s berths at Los Angeles, Long Beach, and Wilmington as berths within the single port of Los Angeles. It was also held in The Baltimore Trader,4 that time shifting between berths within the port of Houston counted as used laytime per clause 15(d).5 46A.2 Also somewhat related are the awards in The Ogden Charger 6 and The Cove Leader.7 In The Ogden Charger, it was held that since the vessel had proceeded to Jacksonville and Port Everglades in accordance with the charterer’s option to nominate two discharge ports, the owner was entitled to freight based on a two-port rate even though the vessel never discharged at Jacksonville. In The Cove Leader, the panel held that since the owner was paid a two-discharge port freight differential, demurrage stopped accruing on disconnecting hoses at the first discharging port and resumed on the vessel’s arrival at the second discharging port, and delays in sailing from the first port, in the absence of the charterer’s breach, should be for the owner’s account.