TANKERMATTERS

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PreventingShortageClaims

Shipboard losses

evaporation via venting systems

leakage to non-cargo spaces

leakage to sea

deliberate retention for illicit purposes

excessive cargo remaining on board (ROB) resulting from:

high pour-point cargo

pumping deficiencies

crude oil washing (COW) deficiencies

Paper losses

In many shortage claims no actual loss hastaken place but the amount of cargo hasbeen overstated when loading and/orunderstated when discharging.

Ships personnel could stop these paperlosses, which cost their owners millions ofdollars a year, by insisting that cargo isaccurately measured and ensuring that it ishandled and carried with care.

Recognising the causesof shortage claims

Planning ahead

Everyone can help stop losses.

Owners can ensure that shipsare suitable for their cargoes.

Charterers can make cargoorders clear, concise andcomplete.

Officers can make sure thatthey and the crew are as wellprepared as the ship itself.

When loading the maximum permitted bythe charter party, allow for expansion.

Company policy often dictates the fillinglimit. 98% of a tanks capacity generallyallows for cargo temperature to increaseby 20C - but the difference intemperature between northern Europeand the tropics often exceeds this figure.

Ullages exceeding limits set out in theships stability book can lead to excessivefree surface. This can cause sloshing,making pressure/vacuum valves breatheand resulting in vapour losses or boil offof the lighter fractions of the cargo. It canalso lead to structural failure andendanger the ship.

Stowing volatile cargo next to heatedcargo or bunker tanks promotesevaporative losses. Charterers shouldspecify maximum adjacent temperatures.

To ensure the ship can and does meet thecharter partys conditions regarding cargoquantity, consider:

to avoid large vapour losses, is the Reidvapour pressure (RVP) of the cargowithin the ships capacity?

if crude oil washing (COW) is required,can the ship carry it out effectively in thetime specified, with the type of crude oilto be carried?

if the specific gravity of the cargo is high,what ullages will be required to avoidexceeding the maximum weight for whichthe ships tanks were designed?

will those ullages conflict - at any point inthe voyage - with restrictions imposed byclass?

Ensuring the ship is suitable for the cargo Preparing the cargo plan

The key meeting should not be limited to fillingout cargo and safety checklists - it is in theships interest for the Chief Officer to take thisopportunity to build ship and shore staff into ateam.

The Chief Officer must ascertain the followingfrom the terminal representatives to monitorthe quantity of cargo transferred to the shipscare:

how ship and shore will communicate

grade(s) and quantity(ies) of cargo(es) tobe loaded

number of shore tanks to be loaded from,and the quantity, temperature anddensity of cargo in each

whether density is being expressed inair or in vacuum (see p 18)

whether shore pipelines are full orempty, and details of any pipelinedisplacements planned

proposed loading rate(s)

whether any loading stops are plannedfor shore tank changes, whether ship orshore is responsible - and how to stop inan emergency

whether loading by gravity or shorepumps

whether pumps are displacement or non-displacement (only a non-displacementpump can tolerate the ship shuttingvalves while it is pumping)

Working as a team

The smaller crews become,the more each man must do.

Working as a team reducesstress and the risk of errorswhich lead to claims.

Working with terminal representatives

If any cargo tanks are not dry, theinspector must determine the on boardquantity (OBQ) of previous cargo.

To do this accurately, the inspector mustestablish:

the amount of any sediment and free water present in eachcargo tank

the temperature of the cargo ineach tank

the ships trim and list

If material remains in the shipspipelines, tell the inspector how much.He is unlikely to certify these figures butshould include them in his report,prefaced said to contain.

Working with the cargo inspector: On Board Quantity (OBQ) surveys

It is never in the ships interest for theOBQ to be underestimated. This willresult in an overstatement of theloaded figure, exposing the ship to anunwarranted short delivery claim.

While in some trades the discharge portsoutturn figures alone determine theamount of cargo delivered, in others theyare still compared to the bill of ladingfigures provided by the loadport.

Even if both terminals carry out theirmeasurements diligently, each will (quitelegally) round off temperature and ullagereadings in its favour, so differences areonly to be expected.

In the absence of a like-for-likecomparison, the ship is the only commonfactor - and therefore the measurementstaken on board are critical.

It is vital to the ships interests to ensurethat all cargo inspections are carried outcarefully and comprehensively.

The inspector must be accompanied atall times and his ullage measurementsactively verified.

Working with the cargo inspector:Establishing the amount of cargo loaded

Remember, an inspector is as prone toerror as the next person.

Measurement errors often result from:

commercial pressures

use of defective equipment

improper measurement technique

Risks can be reduced by:

remembering that, long after theimmediate pressure has been forgotten,the ship will remain responsible forhaving ensured that the measurementswere carried out correctly. Some ownersemploy cargo superintendents to relievethe pressure. If, in spite of all measurestaken, an early departure procedure, forexample, exposes the ship to anyunwarranted liability, it must protest

frequently maintaining and checkingships equipment - and arranging forregular calibration of electronicmeasuring devices by an agentapproved by the manufacturer

doing homework, sharing experiencearound and encouraging everyone totalk about their mistakes, so all can learnfrom them

Some common mistakes are considered next...

Measurement errors

Never permit the use of the terminalsmeasuring equipment on board.

If measurements taken with theinspectors equipment differ from thosetaken with the ships, propose that allmeasurements be taken with each, andboth be sent for verification ashoreafterwards.

If the retro-fitted vapour lock valvesrequired by electronic gaugingequipment have changed the heightand/or position of the ullage point,measurements taken through such valvesmust be corrected before use.

If the ship is pitching or rolling, fivemeasurements should be taken,withdrawing the tape as soon as itpenetrates the surface of the cargo. Thehighest and lowest should be ignoredand the middle three averaged. Weatherand sea conditions should be logged.

In the same conditions on inerted ships,or where electronic, closed gaugingequipment is used, the probe should bewithdrawn and lowered until threereadings differ by no more than 5mm.

Ullaging

The temperature of every cargo tankshould be recorded separately.

Cargo temperature may vary by 5 C atdifferent levels in the tank, so must beaveraged from at least three readings -top, middle and bottom. Some digitalprobes can measure at more frequentintervals.

Taking cargo temperature

A measurement error of 1C can distortthe volume calculation by +/-0.1%,depending on cargo density on a VLCC typically 1,500 barrels (approx. US$ 30,000 in November 97).

Checking cargo density

A difference of 0.0100 Kg/litre in cargodensity can alter a VLCCs tonnagecalculation by some 3,000 metric tonnes(approx. US$ 420,000 in November 97).

Despite practical difficulties, it is bestpractice to make sure the density of thecargo is measured and compared withthe figures supplied by the terminal.

If the loading terminal measuresdensities in vacuum and the dischargeport in air, the figures must be correctedto avoid an apparent loss.

Many loadport cargo measurementerrors are caused by failing to make dueallowance for trim and list. These shouldbe based on draft readings wheneverpossible.

Allowing for trim and list

A list correction error of 1 could lead to overstating a VLCCs cargo by 10,000 barrels (approx. US$ 200,000 in November 97).

Sediment and water

The quantity of any free water detectedmust also be corrected for trim and list.Protest even small amounts, as there islikely to be more in suspension.

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Make sure all parties are using the sameedition of the ASTM PetroleumMeasurement tables.

The pre-1980 table 6, still used instead oftable 6A or 6B by some terminals -particularly in the Middle East and Asia -will overstate the quantity of cargoloaded if the temperature exceeds 60F(approx. 15C).

Make sure the contents of the shipspipelines are included in the calculations.

Sign the inspectors quantity report forullages and temperatures only.

Apply the vessel experience factor (VEF).

If the ships figures differ from theshores, review the calculations.

If the difference is confirmed, initiate theowners standard procedure.

Calculating cargo quantity

Accompany the inspector at all times,ensuring that he measures temperatures,ullages, densities, list and trimaccurately.

Before discharging cargo, ask theinspector to witness that the overboardvalves are sealed and record the sealnumbers in the log.

Make sure pumproom valves areproperly set and bypass valves closed.

Immediately cargo starts to bedischarged, check over the side forleakage.

Verifying that ullages are constant in idletanks confirms that cargo is not beingmisrouted or leaking within the ship.

Ullaging active tanks regularly andcomparing results with hourly shoredischarge rates helps ensure that cargois not being misdirected in the receivingterminal.

Monitoring air and sea temperature andsea state can provide valuable evidencein case of a subsequent dispute aboutthe pumpability of the cargo.

Working with the cargo inspector:Monitoring the discharge of cargo

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A well thought out, carefully executedCOW plan is central to maximising theoutturn of a crude oil cargo.

Clingage can account for as much cargoas remains on tank bottoms if a ship isnot able or permitted to COW.

To avoid delaying the dischargeoperation, any officer involved in crudeoil washing must hold the appropriatecertificate of competence and be familiarwith the vessels COW systems.

In case the ship is called upon to proveCOW was performed efficiently, log,every hour:

which pump is being used start and stop times for each tank number of cycles status of each tank

(e.g. top wash, bottom wash)

type of machine pressure in the wash line at the

pump, the aft end of the line and ata forward point

Ask the cargo inspector to witness thatCOW is being carried out efficiently.

If either the terminal or the charterer willnot permit COW, ask for writtenconfirmation and consider a protest toprotect against a subsequent shortageclaim.

Maximising outturn:Crude oil washing (COW)

Maximising outturn:Stripping

The more officers and crew learn abouttheir ship and its cargoes, the better theoutturn will be and the less the timespent at the berth.

The best way to avoid losses resultingfrom charter party freight retentionclauses is to make sure the ship candemonstrate it did everything possible todischarge all the cargo.

The discharge plan must take account ofthe locations of the tank strippingsuctions and give directions for achieving the desired trims and lists.

Provided it is within the ships stresslimits, the greater the trim aft, the betterthe drainage.

When stripping high pour-point cargo:

maintain cargo at the recommendeddischarge temperature until theheating coils are about to be exposed

start stripping as soon as cargopumping stops

protest any request from the shoreto stop

if the stop is essential, continuestripping to an accumulation tankand resume cargo heating as soon as possible

When stripping high vapour pressurecargoes:

avoid operating pumps at excessivespeed which increases vaporisation,causes cavitation and reducessuction

increasing the pressure of inert gasin the cargo tank or increasing theback pressure on the pump canimprove pumping performance

Re-inspect empty tanks before declaringa grade finished or discharging the lastcargo (or slops) capable of drivingeductors. Additional cargo may haveaccumulated due to:

changes in list and trim

bulkhead, pipeline or valve leaks

Working with the cargo inspector:Remaining on board (ROB) surveys

It is always important to observe and log precisely how the inspector measures ROB.

Ensure he surveys all the cargo tanks.

Make sure he takes great care readingsounding rods or bobs, to avoid thecommon mistake of overstating the liquidelement of bottom residues because ithas run down over the sediment as therod is raised.

Ask him to take samples of the bottomresidue, from more than one point ineach tank if possible.

If you suspect that the samples may beunrepresentative because of thetendency of less viscous material to flowmore easily into the sampling device, askthe inspector to sample the more viscousmaterial found in the pump mud box orthe manifold when it is disconnected.

Determining ROB is difficult due to:

difficulty of calibrating bottomlevels of tanks

blocked limber holes

unmeasurable tank side clingage

uncertainty about the liquidity ofbottom residues

Calculate the ROB independently,compare results with the inspectors and log any differences.

Do not allow the shore hoses to bedisconnected until the inspector hassigned a dry tank certificate, or astatement of ROB, that you agree with.

If you dispute the inspectors figures,initiate the owners standard procedure.

Urge that the wedge formula be appliedonly to the liquid element of the ROB,since it can be argued that there must beas much sediment under the liquid asthere is in the dry parts of the tank.

Invite the inspector to sight every ballasttank and void space to confirm that nocargo has leaked or been misrouted.

If the ships cargo lines have beendrained, demonstrate this to him andensure it appears on the inspectioncertificate.

PreventingContaminationClaims

Shoreside residues of previous contents of storage

tanks, lines and hoses

tank and line cleaning media, includingwater

other products, because of valve leakage ormis-operation or poor in-line blending

fresh water or impurities carried over fromthe manufacturing process

fresh water from leaking heating coils ortank roofs

salt water from leaking sub-sea pipelines

Shipboard residues of previous contents of ships

tanks, lines, pumps and hoses

dirty sounding and ullaging equipment tank coating deficiencies tank and line cleaning media, including

water

other part cargoes, because of valveleakage, valve mis-operation or tankstructural deficiency (e.g. bulkhead cracks)

other part cargoes vapour via commoninert gas systems

salt water from leaking tank hatches,sounding pipes and accesses

fresh water from leaking heating coils copper leaching from alloys used to

manufacture heating coils (e.g. alloy brasscontamination of jet fuel)

Recognising the causesof contamination

Planning ahead

In the contest against claims,as in todays competitivemarket place, only the bestinformed will win.

To ensure the ship can and does meet all thecharter partys conditions regarding cargoquality, consider:

does the ships International MaritimeOrganisation Certificate of Fitnessdeclare it fit to carry the cargo?

can the different grades of cargo bearranged to maintain the degree ofseparation required?

can the ship maintain the required cargocarriage and discharge temperature(s)?

is the tank coating suitable for the cargo?For example sulphuric acid or white wineneed stainless steel; epoxy is preferredfor vegetable oils.

is the cargo suitable for the tank coating?Some cargoes can permanently damagecertain coatings, others make coatingssoft for a while, during which time therange of cargoes they can tolerate isrestricted. Refer to the coatingmanufacturers resistance lists.

Ensuring the ship is suitable for the cargo The cargo plan should minimise stress

on the ship and eliminate the risk ofcross-contamination of different gradesof cargo.

For multi-grade loadings, plan the use ofpumps and pipelines to avoid orminimise commingling or downgrading.

Ensure line displacements are calculatedsuch as to avoid cross-contamination.

If ullages are insufficient, cargo from onetank can slosh through a common ventline to contaminate non-compatible cargoin an adjacent tank, if the ship rolls.

The vapours of one grade can putanother grade out of specification, e.g.gasoline and kerosene or diesel, if kepton a common venting line. If there is onlyone venting line, isolate one of thegrades from the system.

Remember, certain cargoes cannottolerate heat from an adjacent tank.

Heat reduces the effectiveness ofinhibitors, so avoid stowing inhibitedcargoes adjacent to heated tanks.

To avoid stowing dangerously reactivecargoes in adjacent tanks - or allowingthem to mix in lines, pumps or slop tanks- consult the US Coast Guard Code ofFederal Regulations.

Preparing the cargo plan

Flush and drain pumps, pipelines, valvesand draining systems.

Thoroughly rinse away any cleansingagents used.

Washing water and previous cargo indead ends and branch lines causescontamination.

For cargoes that cannot tolerate water,e.g. jet fuel and lubricating oil, mop tanksand remove valve inspection plates toeliminate every trace of moisture.

Clean vent lines.

Chemical tankers should carry out theirown wall wash tests prior to inspection.

When a tank is gas free, take theopportunity to inspect its structure andequipment and carry out maintenancewhere possible.

The condition of tank coatings should bemonitored but specialist attention isusually required if they are found to bedefective.

Preparing cargo systemsand carrying outpreventive maintenance

Clean the gasket face of tank openings;check rubber gaskets and replace ifnecessary; replace fibre gaskets andtighten hatch lids correctly.

Test for oil, water and vapour tightness byusing the inert gas system to pressurisetanks.

Check valve spindles for vapour leakingfrom glands.

Make cold weather preparations ifnecessary.

Regularly check and maintain:

all cargo valves, pipelines, expansionjoints and couplings by pressuretesting

seachest valves and overboarddischarge valves

high level and pump room alarms

hydraulic valve operating systems

CCR and pump room instrumentation

cargo pumps, stripping pumps,draining systems and COW machinesto prevent extended discharge times

pressure/vacuum valves to preventvapour losses and cross-contamination

sampling and measuring devices, e.g.Whessoe gauges, trimodal gauges,explosimeters, oxygen meters

Never overlook the rules for safeconfined space entry.

heating coils, using air or freshwater to check for leaks (whichcause contamination) or blockages(which cause cargo to solidify). Ifcoils are not intact, they maycontain residues of previous cargoes

the inert gas system, to ensure it canmaintain required pressure; reduceoxygen content to required level;avoid contaminating cargo with sootdeposits from inadequatelyscrubbed flue gases

Ships staff must be trained in the use andcalibration of electronic equipment. Itmust also be calibrated and certified byan approved agency yearly.

Working as a team

Encourage everyone to talkabout their mistakes, so allcan learn from them. Build awinning team.

The key meeting should not be limited to fillingout cargo and safety checklists it is in the shipsinterest for the Chief Officer to take this oppor-tunity to build ship and shore staff into a team.

The Chief Officer must ascertain the followingfrom the terminal representatives to monitorthe quality of the cargo transferred to theships care:

how ship and shore will communicate grade(s) and quantity(ies) of cargo(es) to

be loaded

density(ies) of cargo(es) whether the shore pipeline is dedicated details of any shore pipeline

displacements planned

number of shore tanks to be loaded from,and the quantity, temperature and densityof cargo in each

whether any loading stops are planned forshore tank changes, whether ship orshore is responsible - and how to stop inan emergency

if changes are to take place without stops,that the ship receive notification of everychange for sampling purposes

whether the ship will be receiving twosets of samples from the shore tanks: onefor the receiver, one for the shipowner (if not, log that the request was made andrefused)

Working withterminal representatives

Remember, an independent inspector isindependent in name only - expect him togive the ships interests low priority, andmake sure he is accompanied by anofficer at all times.

An experienced officer may well be moreexpert than the inspector.

Tanks cannot be entered where localregulations insist on constant operationof the inert gas system but, wheneverpossible, make sure that the inspectorchecks every tank thoroughly.

If the ships pipelines have been drained,demonstrate this to him and ensure itappears on the inspection certificate.

Outside the chemical trade, tankinspections are often subjective so, if youdo not agree with the inspector, try toreach a commercial solution - alwaysfaster and cheaper than a legal one.

As soon as it becomes apparent that youcannot agree, protest.

Working with the cargo inspector:Tank inspections

Remember the Club is always there to support you, usually with acorrespondent on the spot.

Adopt a sampling procedure that satisfiesthe relevant authorities.

Make sure the ship has the rightequipment, including clean bottles, seals and labels.

Label samples with the followinginformation:

ships name date and time location cargo name operational status (e.g. after loading) sample source (e.g. tank number...) sample type (e.g. top; composite) identity of sampler seal number

Make sure each sample is signed and sealed, preferably by the independentinspector.

Note the particulars of every sample takenfor the ships purposes in a sampling log.

Present the inspector with a list of samplesdrawn and retained by the ship foracknowledgement and signature.

Require any party to whom a sample ishanded over to sign a receipt for it.

Store samples in a secure space which is cool,well ventilated and not exposed to light.

Since the Hague Rules allow claims to bepresented up to a year after the event,samples should not be disposed of until thatperiod of time has elapsed.

Taking samples

Samples showing that the condition of thecargo did not change between loading anddischarge provide the best defenceagainst unfounded contamination claims.

If the lab report is to be right, the samplemust be right too - an inspector is asprone to error as the next man.

The inspector must be accompanied at alltimes, to ensure that the samplingprocedure satisfies the relevantauthorities.

Refer to the Institute of PetroleumPetroleum Measurement Manual or theAmerican Petroleum Institute Manual ofPetroleum Measurement Standards to becertain you know what is required. Seep.51 for addresses of these organisations.

If the inspector fails to do something heshould, or does it wrong, point it out to him- and log anything he does not put right.

Log any faults with his equipment and anyoccasions when he borrows the ships.

As well as any samples he takes for theconsignee, the receiver and his own firm,ask the inspector to take another set forthe ship.

If he refuses, note it in the log - and takeyour own.

Working with the cargo inspector:Sampling during loadingand discharging

Accompany the inspector when he opensthe sealed unit of any composite sampler.

After-loading samples should be takenfrom top, middle and bottom of eachcargo tank.

If the cargo is to be treated with anadditive, the fact should be recorded onthe bill of lading. Unless you are certainthat the shipper and receiver have agreedto this taking place after loading, requireany party proposing to do this to sign forreceipt of a letter protesting theprocedure - before he carries it out.

Make sure you receive a certificate inrespect of cargoes that are inhibited.

At the discharge port, in-line samples ofeach grade of cargo should be taken atthe manifold:

at the start of discharging

once during every watch that thegrade is being discharged

during stripping

If the inspector fails to take any of thesesamples, the ship should take its own.

Make sure the inspector samples any freewater found, so that its source can beestablished.

Sampling bunker tanks after loading andbefore discharging helps defend againstclaims that cargo has been used asbunkers.

Chief Officers should ensure they receivetwo sets of shore tank samples for eachgrade: one set for delivery to thereceivers agent; the other to be retainedby the ship.

Asking the inspector to take startingsamples at the manifold is the best wayto detect contamination or comminglingin shore lines.

Make sure first foot samples are taken toverify that the ships lines are clean.

Discourage the inspector from subjectingthem to visual analysis only, whileloading continues.

Loading should be stopped while propertests are carried out, particularly whenthe specification is critical.

If the samples are off-test, advise thecharterer without delay.

Even if tests reveal no problems, the shipmust retain its duplicate samples in caseof any later dispute.

Carry out spot checks at the manifoldwhenever practicable during loading,particularly after any shore stops andpreferably accompanied by the inspectoror a representative of the terminal.

A leading firm of cargo surveyors reportsthat approximately 40% of allegedshipboard contamination problems are, oninvestigation, found to be shore related.

Maintain a minimum of two-valveseparation throughout the discharge ofmultiple grade cargoes.

Valves should be sealed (if they were notsealed in the loadport) and the sealspointed out to the inspector and logged.

If possible, leave seals in place untildischarge is completed and ask theinspector to note the fact.

The most easily contaminated gradesshould be discharged first, if possible.

If any grade cannot tolerate contact withresidues of the grade before, strip thecargo line.

If necessary, flush the line with the secondgrade and re-strip - it is better to lose partof the cargo through downgrading than tocontaminate all of it and the shore tankbesides.

A watch officer discovering contaminationshould:

stop discharging the relevant cargo close that systems valves advise the Chief Officer, who advises

the Master, who contacts the ownerand his local P&I correspondent

The Master should: sample the remaining cargo and

request testing

await instructions from the owner Never try to conceal a handling error

which may result in contamination. Thesooner problems are identified, the lessthe owners potential exposure.

Monitoring the discharge of cargo

American Petroleum Institute1220 L Street, NorthwestWashington, DC 20005-4070

Telephone: +1 202-682-8000

Fax: +1 202-962-4776

Institute of Petroleum61 New Cavendish Street,London W1M 8AR

Telephone: +44 (0)20 7467 7100

Fax: +44 (0)20 7255 1472

USEFUL ADDRESSES

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