Misread tariff

A South American port agent was asked by the owners of a vessel to provide a quote for the costs of discharging a shipment of project cargo.

The agent reviewed the port authority’s official tariffs, and advised the owners that the stevedoring costs would be US$ 28.90 per metric tonne of cargo.

The cargo weighed 296 metric tonnes, so the owners calculated the stevedoring costs at approximately US$ 8,500 and quoted that in turn to the charterers of the vessel. The voyage
was fixed on that basis.

The cargo was discharged and the stevedores invoiced the agent US$ 130,000 - costs which were passed to the owners who questioned them. The agent then realised that the US$ 28.90 rate that they had quoted to the owners was the rate per cubic metre, not per metric tonne. The case was reported to ITIC who verified, via local correspondents, that the agent had simply misread the port tariff document.

The agent approached the stevedores who were willing to offer a discount on the costs, and ultimately the agent settled the claim for US$ 75,000, which was covered by ITIC.

Claims commonly arise from misread tariffs. In another recent case, ship agents in Australia quoted the incorrect port charges for a local port to their customer. Their customer then fixed on that basis and suffered a loss of AU$ 86,000. The claim against the agent was reimbursed by ITIC.