A WIDE range of legal risks are surfacing from cost-saving slow steaming, according to lawyers John Reeder and Ravi Aswani, of the London law firm, Stone Chambers.
Slow steaming risks contract breach if ships not moving with 'all speed'A WIDE range of legal risks are surfacing from cost-saving slow steaming, according to lawyers John Reeder and Ravi Aswani, of the London law firm, Stone Chambers.
The deliberate slowing of vessels to achieve a lower fuel consumption conflicts with the typical shipping contract phrase that calls on ships to move "with all speed".
"Various standard contracts of carriage contain express provisions dealing with this obligation such as 'with all convenient speed', 'with all speed', with all convenient despatch' or 'with the utmost despatch'," said the lawyers.
There is also risk of engine damage on ships designed to move at high speeds, they said in an article published in The Lawyer Bar Briefing, and cited by New York's Maritime Advocate.
"As well as the risk of breach of the due despatch obligation, slow steaming may risk damage to his vessel's engine or anti-foul hull coating as the result of a vessel not operating at optimal speed," they said.
"Modern high speed diesel engines are designed to operate only at sustained high service speeds and many manufacturers emphasise that low load operation should be avoided for a number of technical reasons.
"Slow steaming presents the problem of the need to use differing lubricating oils and to train crew adequately to manage this. This brings into question issues such as the recoverability of losses for an engine breakdown under an insurance claim. Where there has been a history of slow steaming, the insurer may argue that the problems were caused by the deliberate or negligent mismanagement of the vessel," they said.
"Crew training and engine management are likely to receive close scrutiny and the shipowner intending to implement a slow-steaming policy would be well advised to ensure that the appropriate training and advice to their engineers is put in place first," said Messrs Reeder and Aswani.
"A shipowner might wish to steam slowly for financial reasons or secure environmental targets, and regulations are also increasingly likely to have an influence or used as a justification," they said, referring to the increasingly mandated use of costly low-sulphur fuel.
"There is an IMO working group considering the implementation of a port state levy based on the fuel consumed on the voyage to that port and/or a global emissions trading scheme," they said.
The lawyers said that an unpublicised fleet-wide policy of slow steaming might also be a peg to hang a claim for breach of the due despatch obligation unless it is brought to the attention of the charterer or cargo owner before the contract is concluded and reflected in the price of the services.
"In London Arbitration 10/00, a case about hull fouling, the tribunal commented that if a vessel had deliberately slow-steamed to save fuel then this would have been a breach of the due despatch obligation," the article said.
Ship salvage operators may also find themselves damned if they do and damned if they don't by slow steaming.
"For some years now salvors have proceeded to casualties where there is no immediate physical danger at an economical speed on account of high bunker costs. This has led, on occasion, to salvors being criticised in Lloyds Open Form [LOF] arbitrations for not responding promptly," the article said.
"Arbitrators have quite reasonably recognised that where the response is not urgent, economical steaming is sensible because at the end of the day the cost of the service will fall on the salved property. In fact in non-urgent cases a salvor might be criticised for steaming full ahead thereby increasing the cost of the service, the article said.
