TT Talk - Taking care of bulk weight issues


Some bulk terminals have contracts which specify a tolerance for the weight of material entering and leaving the terminal. This can result in costly claims for bulk weight discrepancies. It can be best to avoid this – as many terminals do.

Where bulk terminal contracts stipulate weight tolerance it is typical that this is based on two different weighing systems and, as such, prone to inherent difference. Furthermore, where the terminal has inadequate control of both weighing systems or there is a lack of independent verification, it is impossible to ensure their accuracy, calibration and repeatability. 

“Where bulk terminal contracts stipulate weight tolerance it is typical that this is based on two different weighing systems and, as such, prone to inherent difference.”

The operational liability assumed by bulk terminal operators can be exemplified by one contract relating to export of a bulk material that included a stipulation that the terminal was responsible to ensure the weight loaded onto the ship was within 0.5% of the weight of cargo received for export. The received weight was measured by a railroad weighbridge, over which the terminal had no control, whether for operation, accuracy or certification. The measurement of weight exported was based on a ship draught survey; again the terminal had no control. Over the course of a year there was an accumulated discrepancy of 1% between the weight received and weight loaded. Despite numerous technical and legal arguments, the terminal was unable to defend the resultant claim for over US$1m and was forced to negotiate a settlement.

This example reveals two particular issues – firstly, the essential nature of draught surveys and, secondly, the care needed in negotiating contractual terms.

Draught surveys

The purpose of a draught survey is to measure the displacement of a ship before and after loading, and by that determine the weight of cargo loaded. A well conducted draught survey, completed in calm sea conditions, with all variable factors being favourable, is predicted to achieve accuracy of between 0.0 to ±0.5%. However, the potential for error or variable factors frequently results in practice in far less accuracy.

The following elements are typically involved in a draught survey.

  • The density of the water needs to be determined. This part of the process is prone to errors in the determination of displacement, since it cannot be assumed that the average seawater density of 1.025 g/ml is appropriate. Additionally, changes in sediment in suspension or any pollutants – not uncommon in a port area – will affect the water density at short notice.
  • The ship’s draughts are read at six locations around the hull to determine a mean draught. Using this mean draught figure and the water density, the ship’s displacement is determined, with reference to the hydrostatic tables. Where draught marks have not been permanently marked on the hull, careless painting over many years can cause erroneous readings. In addition, any water disturbance by wind, swell or passing traffic may affect the accuracy of reading the draught marks.
  • All ballast, fuel and fresh water tanks are sounded and the weights of liquids contained therein are calculated, using tank calibration tables. These tank calibrations can be incorrect, as well as the density and ‘impurity’ of the tank contents – for example, mud and scale will build up in ballast tanks, and only cleaned periodically.
  • A constant is applied. The constant is the collective term for the weights of additional items on board the ship, including such things as stores, ropes, paint etc but not part of the lightship weight. The constant is determined by draught survey. Prior to loading, the arrival draught survey for a ballasted ship determines her displacement, which consists of (a) the lightship weight and (b) the weight of ‘known’ weights, i.e. fuel, ballast, fresh water etc. Whatever is left over (displacement – (a) + (b)) is the constant.

There are further variables in the process. For example, tank sounding tables often only include data for even keel and stern trim conditions, not commonly allowing for a forward trim. Further, if the ship is moored in a tidal stream or fast flowing current in shallow water with limited under keel clearance, it will ‘squat’ in the water, i.e. the draught will increase.

The net result is that a draught survey will lead to an indicative measurement of cargo weight. This clearly has value in trade, but care should be taken when comparing this measurement against any other methods in order to determine bulk loading discrepancies. A full explanation of the measurement of bulk cargoes has been published by the UK P&I Club.

“A draught survey clearly has value in trade, but care should be taken when comparing this measurement against any other methods in order to determine bulk loading discrepancies.”

Contractual terms

It can be widely anticipated that a calibrated weight mechanism will vary over time – and need to be re-certified. Pitting one mechanism against another – whatever the presumed accuracy of either – will almost inevitably lead to problems.

It is entirely reasonable for cargo interests to seek some verification that cargo delivered to the bulk terminal is thereafter loaded to ships – although there may be little interest in many commodities in doing anything but that. It may be most prudent for bulk marine terminals to endeavour to have no mention of a weight tolerance in their contracts for material entering and leaving their terminal.

If measurement is required, the bulk marine terminal should seek to have some control over or independent verification of the methodology, and preferably agree a single method.

“If measurement is required, the bulk marine terminal should seek to have some control over or independent verification of the methodology.”

Where the parties are unable to agree not to insert a weight tolerance into the agreement, it is recommended to negotiate no less than ±2%, more particularly where measurement by draught survey is anticipated. While draught surveyors will clearly defend the practice, the variables concerned where draught surveys provide one of the measurements can create costly phantom disputes.

 

24 Hour Claims Hotline
+44 7000 882582

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.