INTERTANKO’s Sustainability Project
Our Members have advised us to initiate a dialogue with all reputable charterers to seek an improvement in the way our industry conducts its business, through the development of a voluntary Code of Conduct.
In contrast to the dry bulk sector, tanker charterers enjoy the benefit of paying freight as contractually agreed ‘on completion of discharge’, with payments for additional costs (‘demurrage’) and claims being payable ‘upon receipt of owner’s invoice’. It seems right and reasonable for these payments to be made promptly.
Instead, our charterer-specific statistics on freight and demurrage payments show a worsening trend towards chronic late settlement.
Specifically, for freight payments, we see a typical delay of 5-10 days from completion of discharge, rising to three weeks in the worst cases. For demurrage, we see a typical payment delay of more than three months, at times even exceeding a year.
Such delays affect owners’ cashflow and have a direct effect on the owners’ working capital requirements. We believe it is vital that contractually-agreed payment terms are adhered to if shipowners are to remain viable and able to invest in the future, to the benefit of all.
A draft Code of Conduct has been sent to charterers at top level accompanied by a letter from INTERTANKO’s Chairman and by some additional background information. We are encouraging charterers to engage in a dialogue with us with a view to developing a document which will ensure the mechanics of commercial transactions in the industry are both fair and reasonable.
INTERTANKO's ongoing role, as the international Association representing the independent tanker owners, has been to capture and analyse trends in tanker chartering practices including the delayed payment of freight and demurrage, and to advise stakeholders, including our Members. On an ongoing basis, we will be monitoring practices and producing KPIs so that owners and charterers can measure their performance.
For information on INTERTANKO's Payments Performance System (PPS) please use the link below under Commercial/
Contact: Bill Box
29.07.2016 - 09:40 GMT
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