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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, 13 July 17
SUPRAMAX: NICKEL ORE TRIPS TO CHINA VIA PHILIPPINES WITH DELIVERY S. CHINA IS PAYING AROUND MID $9000 - FEARNLEYS
Supramax
COALspot.com: Another slow start to the week with somewhat softening rates and few fixtures.
Nickel Ore trips to China via the Phil ...
Wednesday, 12 July 17
COAL HAS CONTINUED A STELLAR RUN OVER THE PAST YEAR GAINING ~10% OVER THE PAST QUARTER AND ~41% OVER THE PAST YEAR - LINOS KOGEVINAS
Having just passed the second quarter of 2017, it is interesting to take a look at the performance of the commodity market and how certain commodit ...
Monday, 10 July 17
A ROLLERCOASTER YEAR FOR COAL PRICES; ICPR ROSE 4.62% M/M
COALspot.com: Indonesian coal benchmark price rose 4.62% in July, government data showed.
The benchmark price of Indonesian thermal c ...
Monday, 10 July 17
THE FREIGHT MARKET WAS SHOWS A NEGATIVE TREND WEEK OVER WEEK
COALspot.com: The Freight market decline this past week compared to the previous week, as BDI and Cape indexes show a negative trend week over week ...
Friday, 07 July 17
EIA ESTIMATES SHOW U.S WEEKLY COAL PRODUCTION UP 1.7 PERCENT
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.9 million short tonn ...
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Showing 2006 to 2010 news of total 6871 |
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- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
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