Assessing Ship Performance

The description of the ship’s speed and consumption applies at the time that the charterparty is made and, as the law stands, probably at the time of delivery. In assessing the performance of a vessel, unless the owners have given a guarantee of maintaining the description warranty, the words of Lloyd L.J. in ‘The Gas Enterprise’ should be borne in mind: “The warranty is an undertaking as to the speed at which the vessel is capable of performing, not the speed at which she will actually perform.” It is therefore necessary to calculate the performance based on the many factors and show that the ship owners have failed to maintain the vessel in a condition in which she is capable of performing in accordance with the warranted description given. Having knowledge of the warranties and the data to be used, the basic calculation is to find the distance traveled in good weather and divide it by the good weather hours to give the actual performance speed. The total distance of the voyage is then divided by the actual performance speed which gives the total performance time. It is then necessary to divide the voyage distance by the warranted speed to give the time that the voyage should have taken in accordance with the warranty. If the total performance time is greater than the warranty time the difference will be the under-performance. An example is as follows: The vessel is described as capable of about 11.5 knots in good weather on about 30 tons per day IFO. Any under-performance is on a passage by passage basis, distance being measured from pilot station to pilot station. The voyage ordered is given as 3,400 miles by the agreed distance tables. There are 10 good days of weather on the voyage during which the ship travels 2200 miles. The vessel consumed an average of 31 tons of bunkers per day. The calculation is as follows:

Good weather miles 2200
———————————— = 9.16 knots
Good weather hours 240

Distance of voyage 3400
———————————— = 15.465 days
Good weather speed 9.16

Distance of voyage 3400
———————————- = 12.878 days
Warranted Speed 11

Time lost 15.465 days – 12.878 days = 2.587 days
Value of time lost US$30,000 x 2.587 = US$77,610.00 (less any commission)
The calculation of the bunkers over-consumed would be as follows. The margin of an extra ton per day falls within the ‘about’ allowance of 5%, so there has not been any excess consumption whilst steaming on the voyage. However, additional fuel was used during the time lost by reason of the speed deficiency and charterers are entitled to recover the cost of these. Therefore:
1. Excess time 2.587 days x 30 tons warranted consumption = 77.61 tons
2. Less 5% allowance for about 77.61 x 95% = 73.73 tons
3. Agreed bunker price US$300 per ton x 73.73 = US$22,119.00
Charterers’ total claim will be:
Value of time lost US$77,610.00
Excess bunker consumption US$22,119.00
TOTAL US$99,729.00

Whilst this is a relatively straightforward example it shows the general principles to be applied. Depending on the precise wording of the performance clause it may be necessary to add in additional factors such as current allowances or sea conditions. If there has been bad weather that would affect engine revolutions it may be necessary to make allowances when applying the good weather speed achieved to bad weather periods. On occasions the calculation can become detailed and complex and it is instructive to read what Hobhouse J had to say in Didymi v Atlantic Lines: Once the breach of warranty has been established by reference to performance in good conditions the loss is capable of being proved for all conditions. This is a normal exercise under the simple form of charter-party speed warranty, which relates to the capacity of the vessel to achieve the warranted speed in good conditions. That capacity and any consequent loss may have to be determined from evidence, including expert evidence, about performance in less good conditions … loss to charterers should
include bad weather periods …. Expert evidence may be needed to prove how this should be done. When tackling high-value claims for long charter periods it is often highly advisable to obtain advice from a technical expert. The essential elements for making any assessment are what the charterparty says, or doesn’t say. If a routeing company’s formula for deciding performance is agreed to apply then both parties will have to accept their calculations. If, as mentioned above, speed and consumption are to be assessed on different criteria then the parties must live with that. It is essential that if problems and potentially expensive claims are to be avoided the performance provisions are as clear and precise as possible. One small example of this concerns distances. In order that accurate calculations can be made it is essential that the steaming distances are known and agreed. If no reference is made to which distance tables will be used to establish these, this can lead to problems because of variations between them. For example, in the most recent BP tables, account has been taken of recent international regulations and IMO and environmental recommendations on routeing. These factors have, in some cases, increased the total steaming distances by many miles. As a result it should be made clear in the performance clause how distances are to be measured and possible disputes thereby avoided.