We would like to ask you a question that may seem pointless at first — but is important if you have fixed your vessel on a period time charter.
Why do charterers not submit any performance report when there is no underperformance?
Consider this scenario
You have fixed your vessel on a one-year period time charter. Your charterparty contains the following terms:
- Any savings in consumption must be offset against any reduction in speed
- Any saving in time must be offset against any excess consumption
- Any saving in fuel oil must be offset against increased MDO — and vice versa
- Any overall savings on individual passages, even across different voyages within the period charter, must be set off against any overall loss on other individual passages
- Charterers are required to submit performance reports upon completion of each voyage
Charterers typically only submit performance reports when there is an alleged underperformance. But what if there is a saving for the charterers on a single voyage? The owners will not know about it — unless the charterers send a report.
What this means in practice
If you have such a clause in your charterparty, we recommend:
- Asking charterers to submit a performance report for each voyage — not only when they allege underperformance
- Keeping records of any savings identified
- Setting those savings off against any losses on other voyages within the period
The clause described above is just one example of how you can build a stronger speed and consumption warranty. We strongly recommend amending your vessel’s speed and consumption warranties with clauses like this one — to avoid off-hire disputes and protect against monetary loss.
How we can help
We assist shipowners in two ways.
First, we can help you improve your speed and consumption warranty clauses — building terms that give you a stronger position before a claim is ever raised.
Second, if a claim has already been submitted, we defend your vessel’s position. We perform our calculations and prepare an initial report free of charge. That initial report will advise you on the vessel’s actual performance — including time lost or saved, and bunker over-consumed or saved.
Whether or not a reduction is ultimately achievable, you can always ask us to calculate the vessel’s performance at no cost. We work on a no cure, no pay basis. If we cannot reject or reduce the claim, there is no fee.