Bill of Lading (B/L) & Early Departure Procedure (EDP)

Bill of lading (B/L)

Bill of lading are the most important document of nearly all contracts of carriage by sea.

Once issued, a bill of lading:

  1. Acts as a receipt for the cargo shipped;
  2. Represents the contract of carriage between the receiver and carrier; and
  3. Is a document of title for the goods in question and, in turn, a negotiable instrument.

Legal issues surrounding B/L are quite vast, as are the international conventions that have been created by the shipping community to address it. These international convention includes the Hague (dated 25th August 1924) and Hague-Visby (dated 23rd February 1968) and Hamburg Rules (The full title of the convention – United Nations Convention on the Carriage of Goods by Sea 1978).

Ship & Shore discrepencies

All the above-mentioned conventions require that bills contain accurate and true information as to the quantity and condition of the cargo loaded.

However, in my experience, it is virtually impossible for the ship quantity to be exactly the same as the shore quantity. The reason which could be attribute to these scenario are the likes of swelling and rolling of the vessel, the accuracy of the measurement equipment among other things.

Hence, national standards usually in place (on shore) to ensure that the declared figure on board the export vessel are closest to the true figure. And this figure are usually the by metering station.

Maybe I’ll discuss on metering accuracy in near future.

The priority ranking of available figure normally would be as follow:

  1. Shore Meter figure (Custody level meter)
  2. Shore tank figure (Custody level measurement : Dip tape and thermometer must be calibrated and well maintained.)
  3. Ship figure (Tank level on board export tanker)

Meaning, if figure (1) is available, then it would be used as the Bill of Lading figure, if not, then figure (2) would be used, with figure (3) as the last resort.

While no method is beyond repute, more often than not, vessel master will issued their Letter of Protest (LoP) nonetheless, for both ship gained (ship received more than on shore recorded) or ship loss (ship received less than on shore recorded).

It is the most regular LoP I’ve received so far in my career.

Typically, the discrepancy are less than 0.30%

Early Departure Procedure (EDP)

Why is it used?

Most of the time, EDP is applied when the vessel need to leave the loadport as soon as possible to chase another LDR (Loading Date Range) at another loadport or need to arrived at their discharge port on a certain DDR (Discharge Date Range).

So, in order to speed things up at the loadport, EDP can be applied, which by definition, the ship can depart from the loadport prior to the Bill of Lading has been issued, and sometimes even before the quantity of cargo has been officially determine.

However, in my experience, the ship will depart once we confirmed on the quantity of cargo loaded, and the vessel master agreed with the loaded figure (discrepency of less than 0.30% against the ship figure).

Personally, I would prefer the EDP to be applicable only for shore terminal loading and not for Marine terminal loading operation (FPSO /FSO) since during marine terminal loading operation, the ships (FSO/FPSO and the export tanker) is side by side. And to handover the loading documents and sample would only take around 30 minutes. Meanwhile, shore terminal to ship would takes around 3 hours (generally speaking).

While EDP is said to be an option, but there is heavy pressure on an owner to comply. Terminal are keen to have maximum use of their facilities and minimum delay to waiting ships. Charterers are worried about meeting discharging schedules as well as other complication with regards to laytime and demurrage or even deadfreight.

It is a good practice, in the event of EDP, we share the draft Bill of Lading for the vessel master to check on confirmed on all the details (minus the quantities,quality loaded) are in order. Since they would not see the actual documents on board later on.

So, Who sign the Bill of Lading

As I mentioned before, it is a good practice to share the draft Bill of Lading with the vessel master beforehand, for the master to check on the details prior the loading completion, or even at times prior to the loading commencement.

Why? Because the vessel master is the one who supposed to sign the Bill of Lading. And since the EDP is applied, he won’t be able to do so.

In this case, the master’s authorization to the agent should be limited to the signing and releasing of the bills of lading only (also at times, the manifest, master receipt, etc). In order for the documents to carry any validity, the vessel master Letter of Authorization (LoA) should be in place.

Master will then again check the documents even after their agent signed on behalf.

Among the important information to be recorded should minimally includes the following:

  1. the quantity of cargo said to have been loaded;
  2. the description and condition of cargo;
  3. the date;
  4. voyage details
  5. Loadport
  6. destination (discharge port) – especially important for domestic shipment(since as a proof that you doesn’t need to pay export duty), might be less important for export (since you need to pay export duty)

Conclusion

EDP would be an option if you’re short on time. But then again, it comes with some risk, but always manageable. But, if you’re a charterer and thinking about implementing EDP, make sure that both documents and sample are not required on-board at loadport. There is no point in EDP with sample on-board. You might as well wait for the documents.

Malaysia Crude Oil Terminal Requirement

This is the regulatory requirement for getting the terminal up and running.

  1. Trade License for terminal (state regulations).
  2. Storage License (Federal regulation, under KPDNHEP).
  3. Petroleum license (Federal regulations, under KPDNHEP, PDA 1974) .
  4. Terminal gazetted as “Protected Area” (Federal regulations).
  5. To register International Ship and Port Facility Security Code (ISPS).
  6. Control of Industrial Major Hazard (CIMAH) Regulations 1996.
  7. Customs, Approved Legal Landing Points  – under Seksyen 30 Akta Kastam 1967.
  8. Terminal owners to ensure that storage tanks capacity tables and measurement equipment are calibrated and certified by SIRIM and submitted for Pengarah Kastam Negeri approval.
  9. Terminal agreements with respect from incoming tanker arrangement to risk and liability.
  10. Terminal Handbook should be made available.
  11. Terminal Accounting procedures should be made available for accounting of product received and volume exported.

Although I might miss something. Do add in if you can.

THE PROHIBITION OF GHIBAH

عَنْ أَبِيهِ عَنْ أَبِي هُرَيْرَةَ أَنَّ رَسُولَ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ قَالَ أَتَدْرُونَ مَا الْغِيبَةُ قَالُوا اللَّهُ وَرَسُولُهُ أَعْلَمُ قَالَ ذِكْرُكَ أَخَاكَ بِمَا يَكْرَهُ قِيلَ أَفَرَأَيْتَ إِنْ كَانَ فِي أَخِي مَا أَقُولُ قَالَ إِنْ كَانَ فِيهِ مَا تَقُولُ فَقَدْ اغْتَبْتَهُ وَإِنْ لَمْ يَكُنْ فِيهِ فَقَدْ بَهَتَّهُ

Abu Huraira reported Allah’s Messenger (ﷺ) saying:
“Do you know what backbiting (ghibah) is?” They (the Companions) said, “Allah and His Messenger know best.” Thereupon, he (the Holy Prophet) said, “Backbiting implies your talking about your brother in a manner which he does not like.” It was said to him (the Prophet), “What is your opinion about this that if I actually find (that fault) in my brother which I made a mention of?” He said, “If (that fault) is actually found (in him) what you assert, you in fact backbited him, and if that is not in him it is a slander.”

Reference: Sahih Muslim 2589
Grade: Sahih (authentic)
Translation adapted from sunnah.com

Lessons:

  1. Ghibah (gossiping, or backbiting) is a sin.
  2. Ghibah is when one talks about another in a manner which that person would not like. It may be related to anything regarding the said person, from his religious practices, his worldly affairs, his physical self, his family, and his property to his way of dress, his conduct, and his mannerisms.
  3. Ghibah may take place orally, written, or even via sign language.
  4. Even if what is mentioned is accurate or true, it is still prohibited, and this is what actually constitutes ghibah. If it is inaccurate or untrue, it is considered fitnah (slander).
  5. Social media platforms, including Facebook, WhatsApp, and Instagram, can be especially facilitative of ghibah and the potential for it to turn into fitnah.

Let us be compassionate and rahmah towards others, avoiding backbiting, gossiping, and cursing at all costs.

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Understanding the term “Trimmed by…”

The term “trimmed by…” usually refers to “trimmed by head” or trimmed by stern”.

And here’s what it means:

Trimmed by the head

The forward draft reading is greater than the aft draft reading.

Trimmed by the stern

The aft draft reading is greater that the forward draft reading

Hope that clarify.

Vessel gauging practice during swell

If a vessel is being gauged in a swell, the minimum number of dips per tank should at least be five, taken over the period of the motion, recorded and then averaged.

The same is applicable when the vessel is at berth and rolling so that the cargo in the tank is expected to move more than 3mm (1/8″), the minimum number of gauges to be taken is also five.

What to do if vessel records in transit loss of product or in transit gain in water?

Here what to do if the vessel incurs an in transit loss of product and an in transit gain in water:

  1. Obtain samples of the free water. Might be needed for salinity test.
  2. Check the vessel’s bunkers and bunker consumption during the said voyage
  3. Verify the condition of seals on the sea suction and overboard discharge valves.