From: Vijay Soman

Date: 22/08/2014 5:44 AM

Subject: Fwd: MV Cappuccino Bunkers
Attachments:MV Cappuccino Bunkers ; Cargo Discrepancies ; mv Cargo
Discrepancies /Presentation; mv Cargo Discrepancies /Presentation

To: WMTC's
FM: WSM/SID

Pls see attached from Genco and ensure is shown to genco staff before
joining during briefing. The matters addressed are not limited to genco but
affect industry wide so all centers can benefit and adopt/adapt for briefings
and should be rank specific and juniors to be also shown so they learn
before taking senior positions.

Brgds
Vijay
From: <operations@gencoshipping.com>
Date: 21/08/2014 9:34 PM
Subject: Cargo Discrepancies

8/21/2014

To: Master of mv Genco Spirit

To: Master of mv Genco Beauty
To: Master of mv Genco Leader
To: Master of mv Genco Auvergne
To: Master of mv Genco Claudius
To: Master of mv Genco Carrier
To: Master of mv Genco Normandy
To: Master of mv Genco Avra
To: Master of mv Genco Mare
To: Master of mv Miletus
Cc: Wallem
Cc: Anglo Eastern
Cc: V-Ships
Cc: Thome

Fm: Genco NY Ops

====== VERY IMPORTANT ======

Dear Captains/Christos

Lately we have noticed that a lot of cargo discrepancies between vessels figures
and shore scale figures, for expensive bulk cargoes, occurred in many ports,
especially in Europe, Argentina, Brazil, Black Sea, USA-Mississippi River, North
Africa and WCSA ports.

We have been across very difficult situations where Master sign clean Mates
Receipts, where large cargo differences exist.

In this case vessel and Owners are liable for large shortage claims.

Please make sure accurate draft surveys will be performed, In case of

discrepancy/cargo differences between vessel and shore scale figures.
Pls follow below instructions/steps carefully.

====================

No1:

Call your undersigned operator, anytime, any day.

If undersigned operator cannot be reached, please call operations managers Mr.

Steve Vassilakis or Mr. Robert Dishman and/or your managers.

No2:

Regardless head charterers or sub-charterers, shippers, agents instructions or

pressure put on you to sign clean mates receipts and sail asap.

====DO NOT SIGN CLEAN MATES RECEIPTS WHATSOEVER====

Always master's remarks (declaring ship's figures along with shippers/shore scale
figures) should be entered on the MRs for any discrepancies occurred, cargo
condition..etc. and signed with ship's figures only.

It is master's right to do so.

If charterers, for any reason required clean mates receipts with shore scale figures
to be entered, in this case an ====LOI===== from head-charterers should be
provided to owners prior vessel departure from berth, stating clearly that vessel
will not be kept responsible for any cargo shortages, claims, damages,....etc.

In this case only mates receipts can be signed clean with shore scale figures, and
always below terms should be entered.

"SAID TO BE SAID TO WEIGHT"

"CARGO QUANTITY AND QUALITY UNKNOWN"
"QUANTITY LOADED AS PER SHORE SCALE/SHIPPERS FIGURES"
even if above terms are entered on the MRs without an LOI provided, vessel will
still remain responsible for any cargo discrepancies occurred.

No3:

Tender a letter of protest for cargo differences exists to all concerned parties.

No4:

Besides comments for cargo condition and/or cargo quantity loaded entered on
mates receipts, same comments should be entered on the SOF as well, declaring
clearly any cargo difference, between surveyors figures, vessel figures, and shore
scale/shippers figures.

No5:

Do not provide letter of authorization to agents, to sign B/L on your behalf, till last
moments prior vessel's sailing, when dispute is resolved.

No6:

Do not vacate the berth, unless clearly instructed from Genco NY.

Do not follow attending P&I surveyor's instructions, prior consult undersigned

operator or managers first.

No7:

Please print and file this mail and hand this over as part of handing over notes to
new Captain.

Pls confirm good receipt and full understanding of this message.

Best Regards

Christos Kyrkorianos
Operations Department
Genco Ship Management
(As agents only)
Office tel: 646.443.8521 (ext.) 8521
Cell: 917-825-2726
Email: operations@gencoshipping.com<mailto:operations@gencoshipping.com>
From: <operations@gencoshipping.com>
Date: 21/08/2014 9:33 PM
Subject: MV Cappuccino Bunkers
Attachments:Coping With Capuccino Bunkers.pdf; Cappucino Bunkers Singapore
Bulletin 826.pdf; How_to_reduce_bunker_claims.pdf

8/21/2014

To: Master of mv Genco Spirit

To: Master of mv Genco Beauty
To: Master of mv Genco Leader
To: Master of mv Genco Auvergne
To: Master of mv Genco Claudius
To: Master of mv Genco Carrier
To: Master of mv Genco Normandy
To: Master of mv Genco Avra
To: Master of mv Genco Mare
To: Master of mv Miletus
Cc: Wallem
Cc: Anglo Eastern
Cc: V-Ships
Cc: Thome
Fm: Genco NY Ops

Re: Singapore Bunkering /Cappuccino effect /possible discrepancies.

====== VERY IMPORTANT ======

Dear Captains/Christos

There seems to be increasing frequency in suspected Cappuccino Bunkers during

the bunkering operation
included but not limited to Singapore port, ( In spite of owners appointed
surveyor's attendance) please ensure the following:

1) Pls ensure Bunker barge ullages are checked and witnessed and agreed prior to
load
by Chief Engineer.

2) Pls ensure that every single tank on the bunker barge is ullaged and
visual checked and certified free from air entrainment (cappuccino effect).
3) Ensure bunker barge is not listing and ensure it is brought upright prior
to any measurement being recorded.

4) CAPPUCINO BUNKERS :
Please make sure Chief Engineer together with appointed surveyor
to continually monitor the fuel oil being loaded for signs of
cappuccino effect.

5) The bunker tank temperatures shall be recorded using an appropriate

approved and calibrated thermometer, and check calibration record of said
thermometer.

6) If flow meter used for quantity determination chief engineer should:

a) Verify opening reading prior to any delivery.
b) Inspect meter calibration certificate and record the date last
Calibrated.
c) Record weather it is a temperature compensated meter. If not, pls ensure
volume is adjusted basis temperature recorded in tanks.

7) Samples can be taken from barge manifold or vessel manifold depending on

custom of bunker port ideally using a drip sampler. You are required to
delegate a responsible officer to witness the taking of oil samples by the
Supplier's representatives. These samples should be taken and sealed in the
presence of the responsible officer. One of these Supplier's samples should
be retained for our exclusive use, together with a note as to the origin of
the samples (e.g. bunker barge drip sampler / ship's drip sample).
Pls do not accept pre-prepared samples from any other source.

8) The Sample container attached to drip sampler should be sealed and

checked for tampering regularly during the bunker operation and on
completion of bunkering.

9) On completion vessels representative will inspect seal integrity on drip

sampler container. Witness the sample being thoroughly shaken and then
decanted into four or five sampling containers of at least 750mls, making
three or four passes into each container in turn.
Vessel samples to be distributed; two for vessel, two for bunker barge and
one for surveyor.
Pls witness all samples being sealed and
ensure seal numbers recorded on BDN.

IN CASE OF A DISPUTE:

GENERAL INSTRUTIONS
1) Any discrepancy in ship soundings, ullages or records and bunker
companies readings or dispute in volume lifted or reservation as to the
quality must be advised to charterers, ourselves/GENCO, appointed surveyors and
agents immediately, as well as
reserving our position on any delivery note that may be presented for
signature, ---REFUSE TO SIGN--- , if pressure put to you sign for "receipt only",
and tender a LOP.
Pls call immediately the undersigned operator anytime.

a) CHARTERERS INDIVIDUAL BUNKERS STEM (most often case scenario)

If it is charterers sole stem, please advise charterers asap(send an e-mail and call
charterers PIC anytime) and seek their clear instructions in writing (very important
to avoid any misunderstandings), that must be followed strictly.
Also, Time Charterers bunkering instructions provided in the voyage orders and /or
prior bunkering as to how bunker disputes are to be dealt with, should be
followed strictly.
Charterers are the purchasers of the bunkers, bunker stem is a contract between
charterers and suppliers , that is why charterers remain sole responsible for any
issues arise, therefore Charterers Instructions must be strictly followed in case of a
dispute.

b) JOIN BUNKERS STEM WITH CHARTERERS

If it is a join with charterers stem(charterers + owners), please advise charterers
asap (send an e-mail and call charterers PIC anytime) and seek their clear
instructions.
When charterers WRITTEN instructions on hand, please communicate same to our
office, to determine if we should proceed the same way.
Furthermore, Please send to our office any instructions provided in the voyage
orders and /or prior bunkering as to how bunker disputes are to be dealt with, for
Owners confirmation.

2) Note Bunkers have been purchased basis BUNKER BARGE ULLAGES AS

FINAL AND
BINDING. Pls ensure that you agree with bunker barge ullages prior and
after loading.
3) Pls make sure chief engineer or high rated engine officer to
perform soundings on barge and on vessel together with appointed surveyor.

FYG, Please see attached circulars send from UK P&I club, regarding cappuccino
bunkers.

Please confirm good receipt of this msg

Best Regards
Christos Kyrkorianos
Operations Department
Genco Ship Management
(As agents only)
Office tel: 646.443.8521 (ext.) 8521
Cell: 917-825-2726
Email: operations@gencoshipping.com
 th
Friday 25 May 2012

Bulletin 826 - 05/12 - Cappuccino Bunkers - Singapore

It has come to the Club’s attention that some bunker deliveries at Singapore have
contained excessive amounts of air. As a result the quantity of fuel delivered and
received was significantly overstated. This effect is termed "Cappuccino" as the
entrained air causes the fuel to "foam" which makes traditional manual measurement
at the time of delivery unreliable. After a few days the foam tends to collapse and tank
measurements then show a significant "loss" of fuel. The following guidelines have
been compiled to assist ship's crew with identification of this potential problem and
hopefully help with dispute resolution.

The following precautions should be taken when the bunker barge arrives alongside the
receiving ship;

1. Under the Singapore bunkering procedure safe access to and from the delivery barge
is to be provided by the ship. This may comprise an accommodation ladder or pilot
ladder or a combination of both. Safe access is important as a competent member of
the ship's crew, preferably the Chief Engineer should attend on the barge to carry out
measurement of all the barge tanks before the delivery starts. This should be done
even if an independent Bunker Surveyor has been appointed.

2. All barge tanks, including any tanks declared empty or not intended for this delivery
must be measured and the temperature of the contents established. This must also
include any slop or waste oil tanks. The drafts of the barge should also be obtained.
It is important that when these measurements have been made that the barge Master
and Chief Engineer sign a record of these measurements.

3. Opening of ullage hatches or tank hatches should provide an opportunity to observe

any foam on the surface of the bunkers. Foam may also be detected on the ullage
tape. If there is no foam then the oil level on the tape should appear distinct with no
entrained bubbles. If by observation of the tape and the surface of the fuel you
suspect entrained air then obtain a sample of the fuel by lowering a weighted bottle
into the tank. Pour the sample into a clean glass jar and observe carefully for signs
of foam or bubbles.
 4. If these observations show entrained air the Chief Engineer should not allow the
bunkering to start and contact his head office immediately. If the fuel is being
provided by a charterer then they need to be made aware of the problem. Owners
and/or charterers should then request for an investigation by an independent Bunker
Surveyor. The barge Master should be issued with a letter of protest and a copy sent
to the ship's agent. If the barge Master decides to disconnect from the ship and go to
another location then the agent should immediately inform the port authority and try
to establish where the barge has gone. All relevant times and facts should be
recorded in the deck log book.

Before delivery starts

5. The Chief Engineer should discuss with the barge Master which barge tanks will be
discharged during the bunkering and check that the quantity held in these tanks is
consistent with the quantity to be delivered and that on the bunker delivery receipt.

6. If the Chief Engineer has not observed any entrained air during the initial barge
survey it is still possible that air can be introduced to the barge tanks or the delivery
line during the pumping period. The Singapore Bunkering Procedure SS 600
prohibits the use of compressed air, from bottles or compressors during the pumping
period or during stripping and line clearing. It should be confirmed with the barge
Master that he will follow this procedure (Reference SS600 paragraphs
1.12.10/11/12/13). Stripping of barge tanks can also introduce air and stripping
should only be performed at the end of the delivery for a short period of time. The
barge Master must agree to inform the Chief Engineer when he intends to start
stripping and when it has been completed.

7. It is important that the Chief Engineer measures and records the contents of all his
bunker tanks before the delivery starts and if an independent surveyor is attending he
should be asked to verify this record.

During the delivery

8. Ship's crew need to be alert during bunkering and check for the following signs:
 Bunker hose jerking or whipping around.
 Gurgling sound when standing in vicinity of bunker manifold.
 Fluctuations of pressure indication on manifold pressure gauge.
 Unusual noises from the bunker barge
 Excessive bubbles observed on the sounding tape while taking sounding of
bunkers in the ship's tanks.

9. These observations suggest that air is being introduced into the bunkers and the
Chief Engineer should request the barge Master to stop the pumping operation. The
Owner's office and/or the charterer need to be advised. The Chief Engineer should
attend on the barge again to take measurements and record the contents of all the
tanks and obtain the signature of the barge Master on this record. The contents of all
the ship's bunker tanks need to be recorded. A letter of protest should be issued to
the barge and the ship's agent advised. All pertinent details should be recorded in
the ship's deck log book.
 10. If the delivery is suspended for the above reason an independent surveyor should be
appointed by Owners or Charterers to evaluate the situation and the agent should
inform the port authority.

11. The bunker receipt should not be signed and no agreement reached with the barge
Master on the quantity discharged or received. This should be checked and verified
by an independent surveyor. Again, if the barge departs then the time of departure
needs to be recorded and the ship's agent advised.

After the delivery

12. Assuming that the delivery has been completed without incident the Chief Engineer
should then re-measure ALL the barge tanks and perform calculations, using the
approved barge calibration tables and the appropriate petroleum tables to establish
the quantity discharged by the barge. He would also measure his bunker tanks and
calculate the quantity received.

13. The barge outturn quantity should be similar to the ships received quantity.

14. If there is a significant difference (more than a few tons) between the barge outturn
and the ships received figures then the Chief Engineer should repeat the
measurements of the barge and ship tanks.

15. If the difference between ships received figures and barge figures is significant and
this cannot be explained or resolved then Owners and Charterers should be informed
and they should appoint an independent surveyor.

16. As a further check it would be prudent to re-measure ALL the ship's bunker tank
contents about 12 hours after the delivery to check for any apparent loss but
remember it would be very difficult to resolve any differences after the Chief Engineer
has signed the bunker delivery receipt.

This advice given above is an extract from the forthcoming book by Chris Fisher to be
published later this year and is re produced with kind consent of the author.

Source of Information:
Chris Fisher
Bunker Claims International – A division of Brookes Bell
chris.fisher@brookesbell.com
How to reduce bunker claims
and associated costs
The resolution of fuel quantity and quality
disputes will rely on evidence provided

UK P&I CLUB
IS MANAGED
BY THOMAS
MILLER
How to reduce the risk of bunker
quantity and quality claims and
minimise associated costs
Fuel quantity and quality disputes are notoriously difficult
to resolve and a satisfactory outcome will rely heavily on
evidence provided by a ship’s crew. Detailed and correct
documentation is vital. The following steps should be
followed to help prevent problems and provide essential
evidence if a claim arises.

FUEL QUANTITY
Quantity claims usually arise at the time of delivery and can be
minimised if correct procedures are followed. The following
checks and records must be made at the time of the delivery.
NB: If a shortage is not identified and the correct actions not taken
at the time of delivery it would become almost impossible to
recover any losses after the event.

Pre-delivery checks
● Always try to segregate new bunkers from pre-existing fuel.
Loading into empty tanks will avoid incompatibility problems,
make measurements easier, reduce the chance of spills and, if
the new fuel has a quality defect, it will not contaminate other
fuel.
● Before the delivery measure all ship’s bunker tanks and record
soundings or ullages and temperatures. Convert linear
measurements to volumes using the tank calibration tables and
take into account vessel trim and list. Use densities and correct
petroleum tables to convert observed volumes to volumes at
standard temperature and weight factor to determine metric
tonnes. Record all your findings.
● Prepare a bunker loading plan comprising all tank
measurements before the delivery and expected tank contents
on completion of taking bunkers.
● Check that the bunker delivery note shows the type of fuel and
quantity intended for delivery is according to that expected. Do
not sign the bunker delivery note or sample labels before the
delivery.
● Attend on the barge in the company of the barge master to
measure and record the contents of all the cargo tanks,
including any not designated for your delivery. Take the
temperatures of the fuel in all the tanks. Look for any signs of
foam on the surface of the fuel or excessive bubbles on the
 sounding tape. This may indicate that air has been blown into
the fuel. This is sometimes referred to as ‘cappuccino’.
Measurements under these conditions, tend to overstate the
volume in the tanks. If excessive foaming is observed issue a
letter of protest and consider calling an independent surveyor to
evaluate the situation. Once the bunker transfer is under way it
becomes impossible to resolve this issue.
● Check the barge calibration tables have an official certification
stamp. If not, issue a letter of protest. Again, if you are not
convinced that the tables are correct consider calling an
independent surveyor.
● Use the barge calibration tables to convert linear measurements
to volumes at observed temperature, taking into account any
trim or list of the barge.
● Ensure that the barge master signs your record of barge tank
contents and temperatures.
● Agree with the barge master that stripping of barge tanks will
only be carried out at the end of the delivery as this process can
introduce excessive air into the fuel and make measurements
unreliable.
● Agree with the barge master that air-blowing of line content will
only be carried out at the instructions of the chief engineer at
the end of the delivery as this process can also introduce
excessive air into the fuel and make measurements unreliable
and also prevent spill/over-flow.
● Agree with the barge master where and how his delivery
samples will be taken. Ideally this should be by continuous drip
at the ship’s receiving manifold, however, continuous drip at the
barge discharge manifold should also be acceptable providing
the process can be observed by a member of the ship’s crew.
If the barge master does not intend to take reliable continuous
drip samples then issue a letter of protest and inform him that
you will take delivery of samples he may issue later but you will
record that they were not taken properly.
● If you are not content with the barge sampling procedure then
ensure that you take a continuous drip sample at the ship’s
receiving manifold and invite the barge master to witness this
process and sub division and labelling of samples on
completion of the delivery.
● Carry out all pre-delivery checks and complete standard forms
in accordance with the ship’s management system and local
regulations.

Checks during the delivery

● Ensure continuous drip sampling is performed throughout
 the entire delivery. Do not stop the drip sampling until the
barge master has confirmed that the transfer has been
completed.
● Make sure the fuel being loaded is entering the tanks that you
nominated and no fuel is passing to a non nominated tank. Top
off tanks carefully to avoid over filling and spills.
● Listen for unusual noises from the barge, or excessive
movement of the delivery hose as this may indicate stripping or
air being introduced into the fuel by the barge operators. If in
doubt attend on the barge to investigate and record any
problems and issue a letter of protest if necessary.

Checks on completion of delivery

● Measure and calculate the quantity of fuel on board, by
checking all ship’s tanks and record your findings. Then
subtract your starting quantity from your finishing quantity
(whilst taking into account any consumption during delivery).
This will provide the total quantity received.
NB: To calculate the volume at standard temperature and
weight of fuel supplied you will need the density of the fuel and
this is usually provided on the bunker delivery receipt but
remember the true density can only be established by testing a
drip sample.
● Attend on the barge and measure the contents and
temperatures of all barge tanks together with the barge master
and record your findings and ask him to agree and sign the
record.
● Calculate the barge outturn and compare this against your ship
received quantity. There may be a difference of a few tonnes
due to measurement error and tank calibrations.
● If you are satisfied that the quantity provided on the bunker
delivery receipt has been delivered and received into your tanks
(allowing for a minor discrepancy) then sign the bunker receipt
“for observed volume at temperature only”.
● If you are not satisfied that you have received the quantity on the
bunker delivery receipt then issue a letter of protest and if the
apparent shortage is large (more than 10 tonnes on a large
delivery) then you may consider appointing an independent
surveyor to check the barge and your tanks.
● If a dispute results in the barge master agreeing to pump some
more fuel to the ship make sure the drip sampling is continued
throughout this period.
● Make sure the bulk drip sample is thoroughly mixed before and
during filling of sub sample bottles. Ensure this process is
witnessed by the barge master.
● Label and seal the sub samples and obtain the signature of the
barge master on all the sub samples.
● Do not sign labels of any samples issued by the supplier unless
you are satisfied that they were taken and sub divided properly.
● Check that the bunker receipt only lists the seal numbers of
samples that were taken properly by continuous drip. If the
supplier insists on recording seal numbers on the bunker
receipt for samples that were not properly taken and witnessed
then issue a further letter of protest.
● Ensure you retain all records of measurements, sample data,
letters of protest on file and inform your office of any problems
as soon as possible in writing.
● Complete a final tank measurement and calculation report and
enter the records of tank contents before and after loading in
the oil record book and engine log book.

FUEL QUALITY
The fuel supplied to your ship should have been ordered on the
basis that it will be compliant with the International Standard,
ISO:8217 and be suitable for consumption with respect to
environmental regulations applicable within the intended trading
route of the ship. However production and distribution errors can
result in supply of non-compliant fuel and this is unlikely to be
obvious at the time of delivery. Owners should ensure that all fuels
are sampled and tested to check compliance. The following
checks should be made.

Before the delivery

● Agree with the barge master where and how his delivery
samples will be taken. Ideally this should be by continuous drip
at the ship’s receiving manifold, however, continuous drip at the
barge discharge manifold should also be acceptable providing
the process can be observed by a member of the ship’s crew. If
the barge master does not intend to take reliable continuous
drip samples then issue a letter of protest and inform him that
you will take delivery of samples he may issue later but you will
record that they were not taken properly.
● Check the drip sampling device is fully operational and clean
and fit a clean collection bag.
● Always try to segregate new bunkers from pre-existing fuel.
Loading into empty tanks will avoid incompatibility problems,
make measurements easier, reduce the chance of spills and if
the new fuel has a quality defect it will not contaminate other
fuel. Also you should be able to consume previous fuel during
the period you are waiting on test results for the new fuel.
During the delivery
● Ensure that a continuous drip sample is obtained throughout the
entire delivery. This should be approximately 5 litres.

On completion of the delivery

● Fully mix the bulk drip sample. If the fuel is cold then warm it in
the engine room to make sure it can be properly shaken and
mixed. The barge master should be invited to witness sample
preparations.
● Fill at least four 1 litre sample bottles, adding fuel to each bottle
a little at a time and making multi-passes over the bottles. The
bulk sample container should be mixed or shaken several times
during this process.
● Label and seal all the samples. Make sure the following is
recorded on the labels: Ship’s name, port, barge name, date,
type of fuel (HFO/MDO), sampling method, sampling location,
seal number. The chief engineer and barge master must sign
the labels.
● Make a list of the samples and their seal numbers with remarks
on how they were distributed e.g. Ship retained, barge retained,
test laboratory. One sample should be issued to the barge and a
signed receipt should be obtained.
● Check that the bunker delivery receipt records all the seal
numbers and distribution.
● If the barge master issues samples that were not taken under
agreed witness conditions then sign for “receipt only - source
unknown”. A letter of protest should also be issued.
NB: Marpol sample
It is the duty of the supplier to issue the ship with a Marpol
sample and the seal number of this should be recorded on the
bunker receipt. If the barge master and ship’s crew agreed on
taking only one set of samples, either at the barge manifold or
ship manifold then one of these may be designated the Marpol
sample. A ship taken sample cannot be termed a Marpol sample
unless this is agreed with the barge master and the seal number
is recorded on the bunker receipt. If the bunker receipt lists any
seal numbers of samples that were not taken by the correct
method then issue a letter of protest. There cannot be two
Marpol samples for one delivery.
● One delivery sample should be sent for testing. This is best
arranged through a routine bunker testing service as this would
provide a fast turnaround of results.
● If possible do not use the new fuel until you have received the
test results.
● Check the laboratory test report and take into account any
recommendations given by the laboratory such as heating and
use of purifiers. Record in the engine log book the use of
purifiers and fuel temperatures.
● Always record, in the engine log book, every day the primary
bunker tank being used for transfer to the settling tank.
● If you experience problems with fuel treatment or engine
performance then ensure that appropriate entries are made in
the engine log book.
● If you suspect that the new fuel has some quality defect, due to
filter, purifier or engine problems then take samples before and
after the purifier and before the engine, after the fine filters.
Take great care with sampling hot fuel oil. Label and seal the
samples and ensure the labels contain all relevant information
on when, where and how the samples were taken. Send them
to the laboratory as soon as possible.
● If the purifiers or filters are blocking, then obtain samples of the
sludge for testing.
● Take photographs of purifiers and filters to demonstrate the
problem.
● If engine components sustain damage then preserve the
damaged parts as evidence.
● Keep your head office fully informed of problems as they will
need to communicate with the charterer and or fuel supplier and
arrange for attendance of a surveyor.

Acknowledgements:
Chris Fisher, Bunker Claims International a division of Brookes Bell
 Bunkers: a guide to quality
and quantity claims

For further, more in depth reading,

information can be obtained from the
above publication produced by the
UK Defence Club
www.ukdefence.com
Covering areas such as:
● Purchasing considerations
● Delivery procedures
- Pre-delivery checks
- Procedures during the delivery
- Post delivery procedures
● Compliance with Marpol Annex V1, EU sulphur regulations and
other regional restrictions
● The preservation of evidence
● Sample evidence
● Notes of protest
● Charterparty considerations
- Property in the bunkers
- Quantity of bunkers
- Quality of bunkers
- Fit for purpose
- Causation
- Mitigation
- Bunker supply contracts
● Bunker claims and the role of the Association
● The Association’s experience

UK P&I CLUB For further information please contact:

IS MANAGED Loss Prevention Department, Thomas Miller P&I Ltd
BY THOMAS Tel: +44 20 7204 2307. Fax +44 20 7283 6517
MILLER Email: karl.lumbers@thomasmiller.com
From: <operations@gencoshipping.com>
Date: 21/08/2014 9:35 PM
Subject: mv Cargo Discrepancies /Presentation

8/21/2014

To: Wallem
To: Anglo Eastern
To: V-Ships
To: Thome
Fm: Genco NY Ops

Dear Sirs,

Pls pass attached presentation for cargo discrepancies to below vessels:

mv Genco Spirit
mv Genco Beauty
mv Genco Leader
mv Genco Auvergne
mv Genco Claudius
mv Genco Carrier
mv Genco Normandy
mv Genco Avra
mv Genco Mare
mv Miletus

Best Regards
Christos Kyrkorianos
Operations Department
Genco Ship Management
(As agents only)
Office tel: 646.443.8521 (ext.) 8521
Cell: 917-825-2726
Email: operations@gencoshipping.com<mailto:operations@gencoshipping.com>
 Cargo Quantity
Discrepancies

When Draft Survey differs from

Shore Weight (Shippers Weight)
Cargo Discrepancies

 Most Mates Receipts and/or Bills of

Lading are provided showing the weight
of Shore Scale or Shippers Weight

 Often, this differs from the quantity of

cargo loaded as determined by a draft
survey.
Cargo Discrepancies

 A substantial difference between what

is determined as loaded on board the
vessel by draft survey, and the quantity
indicated on the Mates Receipt may
expose Owners to a substantial cargo
shortage claim.
Cargo Discrepancies

 This applies in particular to High Value

cargo, such as:
 Grains and Grain Products, Sugar, etc.
 Fertilizers, such as Urea, etc.
 Other refined and valuable products
such as Alumina, etc.
Cargo Discrepancies

 Most Bills of Lading and/or Mates

Receipts might indicate that:
 Weight, Quantity and Quality
Unknown, but this may not protect the
vessel or Owners in all countries or
jurisdictions.
 As an example, this would not be
applicable in the United States or in
China.
Cargo Discrepancies

 Shippers description of goods…..

 Weight, measure, quality, quantity,
condition, contents and value unknown
 These reservations will be effective under
English Law if the Master has no means of
knowing the quantity shipped, but, if there is a
draft survey or a tally shows the shippers
figures are inaccurate, this will not protect the
vessel.
Cargo Discrepancies
P&I Coverage
 P&I will NOT cover the shortage for a Mates
Receipt or Bill of Lading, when it is signed,
knowing that the information is not correct.

 This leaves the Owner unprotected for

shortage claims when it is known there is a
substantial difference between what the Shore
Weight is (on the Mates Receipt), and the
cargo as determined by the vessel (by draft
survey)
Cargo Discrepancies
 There is sometimes the indication that an
“allowance” of 0.3 percent or 0.5 percent is
permitted as an allowable difference in the
weight of the cargo. You should not be
persuaded by this claim.

 This is not always the case in many countries,

and is not applied by many receivers in many
situations. (i.e. North African Countries like
Algeria, etc.)
Cargo Discrepancies
P&I Coverage
 Without P&I coverage, the Owner is left
exposed to substantial short landing
claims.

 What can the Master of the vessel do in

such a situation?
Cargo Discrepancies
P&I Coverage
 Accurate Draft  Is the Draft Survey
Surveys correct?
 Has it been properly
done?
 Is there calm water, or is
 If the Draft Survey there Waves or Swell?
differs from the  Is the water salinity
Mates Receipt. properly accounted for?
 Is there current, or are
readings done in a river
which may cause
SQUAT?
Draft Survey

 If the Draft Survey  Has the Master

differs from the checked the
Mates Receipt. calculations?
 Is there a P&I
surveyor doing his
own draft survey?
 Is the Shipper or
Receiver doing a
draft survey also?
Draft Survey

 If the Draft Survey  Do the draft surveys

differs from the of all parties agree
Mates Receipt. substantially?

 Master and Chief

Officer should check
again the accuracy
and reliability of the
draft survey.
Draft Survey

 If the Draft Survey  Have you checked

differs from the the Constants?
Mates Receipt.  Are your constants
reasonable?
 Is the ballast and
fuel quantity correct?
 What is the
experience factor of
the vessel?
Draft Survey-Correct Readings
 Vessels which are lying at a river berth or in tidal conditions when
strong currents are running. Under these conditions the draught
marks should ideally be read over periods of slack water
(provided that at a low water slack there is sufficient under-keel
clearance).

 Currents of appreciable strengths are likely to cause the vessel to

change trim or pitch slightly and/or sink bodily into the water from
her static draught (‘squat’). This phenomenon becomes more
pronounced in shallow waters (shallow water effect).

 Strong currents will result in raised water levels against the

leading edge of a stationary vessel lying in flowing water. This is
especially true when the flow is in the direction of a vessel’s
bulbous bow.
Draft Surveys: - Density of the water in which the vessel
is floating

 It is prudent to obtain samples of water in

which the vessel is floating at, or very close to,
the time at which the draught marks are read.
This is particularly relevant when the vessel is
lying at a estuarial or river berth when
density of the water may be changing, due
to the ebb or flow of the tide.
Why does the vessel draft survey
have to be correct?
 If the Master clauses the Bill of Lading for a quantity
much less than is actually carried, then Owners may
be responsible for claims from Shippers/Charterers for
Loss of Freight from that Shipment.

 If the Bill of Lading is for LESS cargo than is actually

on board,
(Ships figures are more than Mates Receipt,)
then in some countries (Brazil & Argentina) there will
be Customs Fines for discharge of more cargo than
declared.

 The Draft survey will be the evidence with which

Owners rely in perhaps delaying the vessel.
P&I Cover for Cargo Claims
Exceptions

 5. CARGO LIABILITY
 5.1 Cover
 The standard insurance shall cover the member's liability for cargo loss, shortage,
 damage, delay or other responsibility occurring in relation to the carriage of cargo
 on the entered vessel.
 5.2 Exceptions
 However the standard insurance shall not cover liabilities, costs and expenses arising
 out of any of the following,
 5.2.1 failure to arrive or late arrival of the vessel at the port of loading, other than any
 such liabilities, costs and expenses arising under a bill of lading already issued.
 5.2.2 loss, shortage, damage or delay occurring prior to loading, except insofar as loss,
 shortage or damage occurs in the port of loading within 21 days of the date on
 which loading of the cargo on the vessel commences or should commence,
 5.2.3 loss, shortage, damage or delay occurring whilst the cargo is in the custody of
 another carrier or during lightering operations, except insofar as lightering is
 approved by the Association, or occurs in port and is customary,
 5.2.4 failure to load or delay in loading any particular cargo in the vessel, except insofar
 as liabilities, costs and expenses arising under a bill of lading already issued,

 5.2.5 the issue of a bill of lading, waybill or other document containing

or evidencing the contract of carriage which
 a) is antedated or postdated,
 b) contains a description of the cargo or its quantity or condition which
the member or an officer of the vessel knows is incorrect, or
 c) should be claused to show that the cargo is carried on deck and is not so claused,
If there is a Discrepancy between Shore figures and
Draft Survey at the Loadport

 Compare your Draft Survey figures with the other

surveyors: (Have you accompanied the other
surveyors to ensure ballast and Fuel soundings are
accurate?)
 (P&I Surveyor) and/or Shippers-Receivers Surveyors
 Determine if there is significant discrepancy with the
Shippers/Elevator figures

 If you are in agreement with others, then tell the agent

that you will clause the Mates Receipt/Bill of Lading
with the Draft Survey figures
What is a Significant Discrepancy?

 There is a reasonable expectation that the draft survey

may differ to a certain degree as a consequence of the
uncertainties described previously, swells or waves,
etc.

 A significant discrepancy would be one that can not be

accounted for by the uncertainties of a draft survey.
What is a significant discrepancy?

 If the difference is minor, for instance, a

difference of 30-50 MT on a parcel of 45,000
MT (i.e. 0.1%), this may not be considered a
significant discrepancy.

 (TPC of a Handymax vessel is about 48)

 A Significant discrepancy might be over 70 or

80 MT depending on the cargo size (0.2%)
If there is a minor (Not Significant)
difference in Ship to Shore figures

 Check with your vessel operator

 If this is the whole cargo, the operator may instruct you

to issue a Letter of Protest of the difference between
ships figures and shore figures, provided that the
Mates Receipt/Bill of Lading has “Weight Unknown”
included in the wording.

 If the discrepancy is on only a parcel of cargo, then

you should follow the operators instructions,
 (i.e. do not sign the Mates Receipt until further
instructions)
If there is a minor (Not Significant)
difference in Ship to Shore figures

 If the discrepancy is, for instance 50 MT on a

parcel of 15,000 MT, then any additional
parcels, may accumulate to a significant
discrepancy.

 3 parcels of 15,000 MT each having a

discrepancy of 50 MT would equal 150 MT on
the whole cargo, which would be Significant.
If there is a Significant Discrepancy between Shore
figures and Draft Survey at the Loadport

If your draft survey figures differ significantly from the

Shore figures or P&I/Shippers/Receivers draft survey
figures, contact your Technical Managers for guidance
and assistance to ensure the accuracy of your draft
survey figures.
 If you are sure of your draft survey figures (remember
that a significant difference should trigger the Master
to recheck all the variables and calculations, and not
rely only on the figures given to him by a junior officer.)
 If a P&I surveyor has not been attending to do a draft
survey, you should contact the local P&I to get a
surveyor to attend to verify your figures.
If there is a Significant Discrepancy between Shore
figures and Draft Survey at the Loadport
-Actual Case-

 A Handy Size Bulk Carrier Captain called to report a

discrepancy between elevator and ships draft survey of
400 MT (1.5%) on a cargo of 27,000 MT of wheat loaded
in Houston (a river port)
 Owners were ready to order the vessel to a layberth as
Owners could not accept such a high discrepancy.
 After much discussion with the Master, it seems the draft
survey was not prepared or checked by him, and the
Salinity of the Water was not accounted for.
 The actual difference was only about 60-80 MT when the
proper draft survey was done.
 This caused delay to the vessel, and possibly great
expense and embarrassment to the Owners.
Significant difference between Ship’s
Figures and Shippers Figures

 If you are in agreement with other draft surveyors,

then tell the agent that you will Clause the Mates
Receipt/Bill of Lading with the Draft Survey
figures.

 If the Agent (as is likely) will not accept the Ships Draft
Survey Figures, ask to add the Ships Figures
alongside the Shippers/Elevator figures Mates
Receipt/Bill of Lading.
 For example:
Shippers Weight – 30,000 MT
Ships Figures – 28,980 MT
Clausing the Mates Receipt and/or
Bill of Lading
 If the agent/shipper agrees to clause the
Mates Receipt, or to include the Ships
Figures onto the Mates Receipt, or Bill of
Lading, confirm this with your Vessel
Operator and Technical Manager.

 But be careful of the following

caution:
Significant Difference in the Quantity

 The Master may not be able to rely on the

reservation where he knows the shippers’
figures are incorrect.

 Where the discrepancy is so great the Bill

of Lading is obviously wrong, it may not be
safe to rely on this reservation.
 For instance a 1% discrepancy (450 MT
difference on a 45,000 MT parcel).
 In this case, contact your vessel operator
immediately.
What to do?
 If the Agents/Shippers do not accept any
clausing of the Mates Receipt/Bills of Lading,
you must contact your vessel operator
immediately for instructions.
 As we all have experienced, these problems
do not happen at a convenient time and place,
and the agents are pressuring you to sign and
sail the vessel, so if you have knowledge that
a problem may arise, (by doing intermediate
draft surveys) advise your vessel operator in
advance.
What to do?
 Your vessel operator will decide if conditions of
the draft survey on which you rely are
sustainable and the difference is minor, and
may instruct that an appropriate Letter of
Protest be issued, or
 He or She may decide the discrepancy is
enough to contact the Charterers to advise
them of the problem, and request they instruct
the Shippers to allow clausing of Mates
Receipts.
What to do?

 In many circumstances, the Charterers can

not, or will not, agree to clausing of the Mates
Receipts/Bills of Lading and your operator will
request that the Charterers issue to Owners a
 Letter of Indemnity,
where there is a true dispute about the
quantity of the cargo loaded, and for the
Master to then sign the Mates Receipts as
presented.
Why the Letter of Indemnity
 As stated earlier, P&I may not provide cover
for cargo shortages when the Member
(Owner) or ship is aware that the figure on the
Mates Receipt/Bill of Lading is incorrect.

 In that case, at the Owners discretion, he will

request the Charterers to Indemnify the
Owners, through a Letter of Indemnity for
any cargo shortage that is attributable to the
discrepancy at the loadport, otherwise the
Owner will have to pay for the entire shortage.
 Actual Case
 A Genco Panamax vessel loading a cargo of grain in
New Orleans had a P&I surveyor attend to do a draft
survey, and seal the cargo holds.

 There came a discrepancy of almost 300 MT, and the

P&I surveyor told the Master to sign the Mates
Receipts and sail, and he would issue a Letter of
Protest the next day on behalf of the vessel.
 Actual Case
 Neither the Master, nor the P&I surveyor, contacted
the Owners about this, and the Owners found out only
from the Master’s sailing message from Southwest
Pass (some 12 hours after sailing the loading berth, on
a holiday weekend).

 The Owners advised their P&I immediately about this,

BUT
 The vessel’s P&I informed Owners they would not
cover for cargo shortage under their rules.
 P&I refusal of cover

Even though Owners pointed out to the P&I Club that:

1) Owners appointed a P&I surveyor to do a draft
survey and seal the cargo holds.
2) This P&I surveyor they had appointed had
instructed the vessel to sail,

 Yet, the P&I Club continued to deny cover, because

the Master did not contact Owners before signing
the Mates Receipt, despite the surveyors
instructions.
 P&I refusal of cover
 IT IS THEREFORE IMPERATIVE TO CONTACT
YOUR VESSEL OPERATOR FOR INSTRUCTIONS
WHEN THERE IS A DISCREPANCY IN THE CARGO
FIGURES BEFORE YOU SIGN THE DOCUMENTS,
DESPITE THE ADVICE OF ANY P&I SURVEYOR ON
BOARD, TO PREVENT DENIAL OF P&I COVER

 IT IS UP TO THE OWNERS TO GIVE

INSTRUCTIONS, NOT THE SURVEYOR
 THE SUVEYOR IS THERE TO ADVISE AND
ASSIST.
What to do?

 In these circumstance the operator will instruct

you if and when you should sign the Mates
Receipt, or whether to issue a Letter of
Authority to the agents to sign the Bill of
Lading in accordance with the Mates Receipts.
 If possible, do not sign the Letter of
Authority on arrival at the Loadport, but
wait until all cargo has been loaded and
you are in agreement with the figures.
Dealing with the Charterers for
Letters of Indemnity
 As vessels are often in a long Chartering Chain, with
Owners, Managers, and each sub Charterer often in
different parts of the world, resolving these issues can
take much time, and getting LOI’s may take even
longer.
 When you will be loading in an area notorious for
cargo discrepancies, particularly with High Value
Cargo, it is often prudent not to automatically issue
the Letter of Authority to sign Bills of Lading until the
completion of loading, as this might give the vessel
and Owners some leverage.
Dealing with the Charterers for Letters of
Indemnity

 When you are aware that you may have a problem

with the quantity, let your Owners and managers know
immediately, so a P&I surveyor may be appointed as
soon as possible.
 Owners will then likely advise the Charterers in
advance, that in the circumstance of a significant
discrepancy, the Master will clause the Mates
Receipts, and if that is not allowed, the Master will not
issue a Bill of Lading unless an appropriate Letter of
Indemnity is received and approved by Owners from
the Head Charterers before the Master is allowed to
sign the Mates Receipt and sail.
Dealing with the Charterers for Letters of
Indemnity

 Considering the long Charter Chains, it is

important for the vessel to notify the Owners
as soon as possible, if they suspect there will
be a difference between ship and shore
figures.
 Owners may suggest to Charterers that they
appoint their own surveyors to verify the Ship’s
figures.
Other factors in cargo quantity disputes

 If you note spillage of cargo from loaders,

grabs, cranes, etc. onto the deck or wharf,
protest this with a written protest to
Stevedores, Charterers and Agents, and
document it with plenty photos and
statements.
 A picture (or diagram is worth a thousand
words).
 In such a circumstance contact your P&I and
Managers and Owners immediately, not on
completion of cargo operations.
A Picture is worth a thousand words

 Spillage from Shore

Grabs would cause
loading discrepancy,
or shortage claim at
discharge.
Other factors in cargo quantity disputes

 In some circumstances, Shippers or Receivers

surveyors ask the vessel to sign an Initial Draft Survey
document with the figures from the initial draft survey.
 These forms have 2 columns, one for initial survey and
one for final survey.
 These surveyors then fill in their own numbers for the
final draft survey, and use the Master’s signature on
this document as evidence to justify a shortage claim.
 If you are required to sign such a form, remark “FOR
INITIAL SURVEY ONLY”, then you can re-sign and
stamp on completion and acceptance of the FINAL
SURVEY.
Pressure from the Agents/Charterers

 Do not succumb to pressure from the agents that you Must Sign
the Mates Receipts or Bills of Lading as presented, if there is a
dispute.
 If you receive such pressure, summon your P&I representative
immediately, and contact your Managers and Owners.

 You are not required to sign a inaccurate Bill of Lading.

 This also comes into play for inaccurate description of the cargo.

 Sometimes the pressure will come from Charterers to sign and

sail the vessel to avoid delays. Contact your Owners for
instructions
 There is some legal authority that delays because of quantity
disputes should not fall on the vessel. Let your Owners decide.
Summary
• Always have an ACCURATE draft survey for
each loading and discharge.
• If there is a discrepancy, especially significant
discrepancy, contact your vessel operator,
manager and P&I immediately for instructions
before signing any documents.
• Never succumb to pressure from agents or
Charterers to issue inaccurate documents
without instructions from the Owners.