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Friday, December 15, 2017

Worldscale 2008 Schedule to reflect extra bunker costs in SECAs, ISPS costs in U.S. ports and NOx taxes in Norway

The Worldscale Associations this week issued a Notice to their subscribers providing advance information about the next Worldscale Schedule which will take effect on 1 January 2008.

 

Among the changes are reflection of extra costs associated with low sulphur fuels in Sulphur Emission Control Areas (SECAs), ISPS (International Ship and Port Facility Security Code) costs in U.S. ports and Nox (nitrogen oxide) taxes in Norway, all issues that have been raised by INTERTANKO's Worldscale Committee. The bunker price assumption will be increased, but not to the current level.

 

A Fixed Rate Differential will be introduced in the 2008 Worldscale Schedule to cover the extra cost of consuming low sulphur fuel for voyages where all the ports are entirely within the Baltic and North Sea SECAs. Voyages that involve ports both inside and outside the SECAs will not be subject to this Fixed Differential in the 2008 Worldscale Schedule. Accordingly it is essential that this lack of comparability is taken into account when negotiating fixtures that can involve sailing in SECAs.

 

 

Previous Worldscale Schedules have reflected ISPS costs for the rest of the world when they are known to the Worldscale Associations, except for any U.S. or U.S. controlled ports. This anomaly will now be removed, and thus there will now be an allowance for ISPS costs when they are known to the Worldscale Associations on a global basis.

 

Another change is that the Norwegian tax on Nox emissions will be for charterers' account.

 

As announced in Weekly News 40/2007 dated 5 October 2007, the bunker price assumption for the 2008 Worldscale Schedule will be USD 328.75 per tonne, as compared to USD 318.25 for the current 2007 Schedule, and substantially lower than the current market level. Members will recall that the bunker price assumption to be used represents the average worldwide bunker price for 380 cst fuel oil during the period 1 October 2006 to 30 September 2007. This will lead to a general low increase in the 2008 WS Flat Rates.

 

The other main component of the Flat Rate is the port costs. The impact of this element will vary with the length of the voyage concerned, as well as with any adjustment made to the port tariffs. The U.S. dollar has weakened vis-à-vis some currencies, thus the port charges for some ports will increase when converted from local currencies to USD. There are a few instances involving short voyages where the flat rates actually go down marginally. Some ports quote their port charges in USD in any case, so these will be unaffected, unless there has been a change in the tariffs.

 

The bunker price used is printed in the Preamble of the Worldscale book. This enables those who so wish to agree on separate bunker price adjustment clauses to be applied should the actual bunker price differ from the one upon which the flat rates are based. Below is a clause originally produced by INTERTANKO's Documentary Committee, subsequently updated:

 

'The voyage freights agreed in this charter have been fixed by reference to the New Worldwide Tanker Nominal Freight Scale as revised effective 1 January 2008 ("Worldscale"). The nominal rates upon which such voyage freight rates have been based shall be varied by the addition or subtraction of the product of the following formula to or from the rates quoted in Worldscale:

 

(0.158L + 100 + 5N) (C-B) USD per tonne

74,500 – (0.079L + 2.5N)

 

Where:

 

"L" is the length in nautical miles of the round voyage as set out in Worldscale;

"N" is the aggregate number of ports of loading and discharge on the chartered voyage;

"C" is the current average worldwide bunker price for fuel oil (380 cst) on the date the vessel commences loading as quoted by LQM Petroleum services, Inc.

"B" is the price of fuel oil (380 cst) in USD/MT as set out in Worldscale (USD 328.75 for the 2008 edition).'

 

The Worldscale Schedule for 2008 will be issued in the middle of December, and will take effect on 1 January 2008.

 

Contact: Kristian R. Fuglesang