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Friday, 07 July 17
SHOULD WE BE AVOIDING GENERAL AVERAGE? - ALEX KEMP
 KNOWLEDGE TO ELEVATE
Calls for general average to be abolished are nearly as old as the regime itself. A representative of Lloyd’s attended the eponymous Antwerp Conference in 1873 and latterly described general average as a “a nest of fraud and abuses, a lurking place for speculation and waste”. Even in 1913 commentators were complaining about the increasing size of vessels and the volume of bills of lading they created. The Chairman of the US Association of Average Adjusters said of general average that year “the time, trouble, expense and delay are out of all proportion to the benefit achieved”. These comments are surprisingly familiar and it is interesting to see that the same weakness in general average are made today.
Unsurprisingly those involved in transporting or insuring cargo have little love for the regime, when they are usually the paying party. There have been calls in the past for the loss to simply lie where it falls for the respective hull and cargo insurers to absorb. A key piece of research by Mr Matthew Marshall of the Institute of London Underwriters for the IUMI Tokyo conference in 1994 (updated to 1999) really energized the modern debate. His work highlighted the fact that 10% of the cost of general average was adjusters’ fees and another 10% commission (something that has now been abolished in the most recent rules). Perhaps most importantly it was suggested that the majority of general average events were the fault of the ship owner. This helped lead to the ill-fated York-Antwerp Rules 2004 which have now been replaced.
Whilst the York-Antwerp Rules 2004 may now have been replaced with a more moderate regime, the circumstances which give rise to criticism of general average are more relevant than ever. Many commentators have written about the increasing size of container ships, the increasing complexity of their contracts of carriage and the severe impact this has on the cost and time required to adjust such a general average event. This observations were again aired in the negotiations to the York-Antwerp Rules 2016.
For the time being, at least, general average does not seem to be in any grave threat of abolition and the status quo (broadly speaking) will continue. However, that doesn’t mean to say that the market is not evolving and adapting to meet the reality of modern general average. General average absorption clauses have long been a feature of H&M policies as a way to avoid low value general average events. Their limits have increased as vessel size and casualty complexity has increased. We have seen examples of such limits being as much as US$1 million.
However, more recently parties involved in container shipping have taken even more aggressive steps. Vessel sharing agreements and slot charters used in the management of container ships often now contain provisions which compel the parties to “consult” to determine whether they can absorb all the general average sacrifices and losses and to try and persuade the Owners not to declare general average. Often these agreements go further and compel the parties to absorb general average between the parties up to a limit of say US$0.5 million (this should be distinguished from a general average adsorption clause in a H&M policy). This shows a commercial decision in container shipping that general average, in principle, should be avoided as it is not in the interests of shippers, who are the customers of container lines.
It is easy to see why. With adjuster’s fees, through no fault of their own, to collect security often running into the hundreds of thousands of dollars and adjustments taking anything up to a decade, it is an unattractive way to deal with losses arising from a casualty in complex container casualties. As a result we have seen container lines go further than the provisions in their contractual agreements in the aftermath of a casualty and enter into bespoke agreements resolving to fund all general average expenses and sacrifice on certain terms. More often than not this prevents any need to collect general average security or obtain cargo documentation for the entire manifest. This simply leaves the carriers to deal with cargo claims (be them sacrifice or otherwise) in the usual way. One might say that this places a greater financial burden on the carriers who are absorbing cargo’s proportion of general average from their bottom line (such a voluntary liability would not ordinarily be insured by the carrier) as ordinarily, cargo’s proportion of general average would be reimbursed by cargo insurers. This may simply be the effect of what is undoubtedly an extremely competitive market place for container shipping, notwithstanding recent mergers.
Ultimately, whether parties should be considering more aggressive steps to avoid general average following an incident, will depend upon the nature of the casualty, the scale of expenses/sacrifice, the legal regimes involved and the number parties. Clearly, the benefits of modifying the “usual” general average process will be greatest in a container casualty scenario but that’s not say that it should not be considered when other types of vessel are involved.
By: Alex Kemp, Senior Associate at Solicitors Holman Fenwick Willan LLP and Associate of the Association of Average Adjusters
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Thursday, 27 July 17
A VOLATILE WEEK IN THE CAPE MARKET - FEARNLEYS
Supramax
The black sea still performing well although bit fewer fixtures concluded/reported. Rates lie somewhere around 18 -19 on front-haul . Bo ...
Wednesday, 26 July 17
SHIPPIPNG MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
After an admittedly challenging 2016, the Dry Bulk market kicked off this year on a much more positive note, with all indices steadily increasing u ...
Monday, 24 July 17
THE FREIGHT MARKET ROSE THIS PAST WEEK COMPARED TO THE PREVIOUS WEEK
COALspot.com: The Freight market rose this past week compared to the previous week, as BDI and Cape indexes show a positive trend week over week.
...
Friday, 21 July 17
ESTIMATED WEEKLY U.S. COAL PRODUCTION TOTALED APPROXIMATELY 15.3 MMST; UP 13.5% W/W
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.3 million short tonn ...
Thursday, 20 July 17
SUPRAMAX: INDO COAL ROUNDS ARE TRADING AROUND MID/HIGH $11K WITH SINGAPORE DELIVERY - FEARNLEYS
Supramax
A positive week again in the Pacific with rates moving upwards.
According to Fearnleys Weekly Dry bulk report, Nopac rounds are pay ...
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Showing 1996 to 2000 news of total 6871 |
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- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Australian Coal Association
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
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