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Intertanko to roll out chartering conduct code later this year

Intertanko to roll out chartering conduct code later this year
Independent tanker owners association Intertanko is planning to introduce a voluntary code of best practice for charterers in the next few months as tanker companies battle for survival.

The code of best practice will focus on areas such as late payment of charter fees and the misuse of inspections by charterers.

With tanker owners struggling to meet covering operating costs, before finance costs, Katharina Stanzel, managing director of Intertanko highlighted the severe impact late payment could have.  “While we are suppliers our customers – oil majors and charterers -  may not realise what a late payment can mean to shipowners,” she said, at media briefing in Oslo.

While in some other sectors such as dry bulk payment is made within three days of the start of the voyage for tanker charters it does not need to be made until the cargo is delivered. Even then Intertanko said payment is routinely five to 7 days late. As for demurrage claims these can drag on for many months before payment is made.

In one case according to Intertanko a suezmax owner required $3m in working capital to cover 10 days late payment.

With owners barely breaking even Stanzel said late payment was putting the safe transport of oil at risk. “Oil shipping is safe today but it as risk,” she said. While owners continue to maintain safety and quality, this means when the cash runs out they simply have no choice but to declare bankruptcy, much as happened to Overseas Shipholding Group (OSG).

Indeed the situation is so bad that at last week’s Intertanko annual conference in Oslo a breakeven on operating costs was being described as the “new profit”.

Along with late payment the code of conduct will also be designed to address issues such as charterers only accepting SIRE inspections from certain inspectors, which owners have to pay for.

Intertanko has committees working on the code now and aims to have in place by the end of the summer. With the code being a voluntary one the aim to is use along with corporate social responsibility to change the way charterers interact with owners. “The importance isn’t the code it is the change in behaviour,” Stanzel said.