Laycan't win 'em all

A shipbroker arranged a contract of affreightment (“COA”) between owners and charterers. The COA ran for the 2020 calendar year and provided for a minimum of 4 and maximum of 12 shipments per quarter in charterers’ option.

On 1st May 2020 the charterer sent an email to the broker declaring that the laycan for the next shipment would be 10-22 June 2020.

The email to the broker was sent to both their post fixture broker’s personal email and the post fixture department’s email address. Both addresses were correct and had been used before. The emails had however gone into junk email folders. The broker advised that they regularly checked the junk email folders, but on this occasion the message had been overlooked.

The broker was alerted to the issue on 3rd June 2020. The charterer routinely provided a schedule of shipments under the COA and the owner reverted saying that they
had not received the 10-22 June 2020 declaration. Owners had not arranged tonnage to perform the voyage on the basis of the laycan declared. Charterers advised that they had several cargoes arriving at the same time from different origins and were unable to offer flexibility on the laycan. To perform the fixture owners had to charter-in tonnage at a freight rate higher than that agreed in the COA.

Owners claimed US $350,000 from the broker to cover their market loss due to the delay in passing on the charterer’s nomination. The claim was in line with the market and in the circumstances the broker settled the claim with the owner, which was reimbursed by ITIC.