Missed Messages, Claims and Notices - Practical Loss Prevention Advice

The volume of emails received by some shipbrokers is simply staggering. The missing of time sensitive messages, out of the hundreds received daily, is a major source of claims against shipbrokers.

The penalty for failing to pass on one operational message is often totally disproportionate to "the offence." The effect of failing to pass on a message declaring an option will be a claim against the broker for thousands of dollars, and on occasions for millions of dollars. Take a situation where a charterer has an option to cancel a time charter provided notice is given by a certain time. If a broker fails to pass on that notice of cancellation, the charterer may remain bound by fixture which could have been replaced by a cheaper ship for the remainder of what might be a long time charter. These claims are not the product of the current market conditions. When markets were rising, the failure by a broker to pass on the declaration of an option to extend period business deprived the charterer of the use of the vessel at lower than the market rate.

For many years, the number one claim against tanker brokers has involved demurrage claim documentation that has not been passed on by the broker. The broker may, unfortunately, only discover what has happened after a large demurrage claim has been time barred under the charterparty terms.

The owners will, of course, then look to the broker to pay the demurrage claim rejected by the charterers. Demurrage claims in recent times have often been for USD 100,000 or more.

Over the last few years, it has become standard practice for demurrage claim documentation to be forwarded by email. A frequent cause of claims is that the broker simply overlooked the message containing the claim.

With regards to loss prevention advice, the first thing brokers should do is attempt to reduce the amount of general emails that have to be sifted through to detect the time sensitive notices and claims. It is clearly prudent to have a specific operations email address. A note should be put on all recaps that .

ITIC has seen a number of brokers set up a separate email address specifically for demurrage claims. The first postfixture message to the parties should contain the same warning that no responsibility can be accepted for claims and notices of claims sent to any other email address. One oil major issues a detailed set of instructions for sending claims. These provide, in general terms, that a person submitting a claim to the correct address will receive an acknowledgement within 48 hours. If such an automatic response is not received within that period, then it is for the sender to make contact and check that the claim has been received and processed. No responsibility can be accepted for the failure to obtain a receipt.

There is no reason why brokers cannot introduce a similar system. This should not just be for demurrage claims but could extend to all other important operational messages.

We have so far looked at operational messages that have been received but overlooked. ITIC has received a number of claims where the message may not have been visible because it was held in a spam filter. This has, for example, prevented a notice of the delivery being passed on. The problem was that the name of the ship triggered the system. Brokers should check that spam filters are not unreasonably restrictive and reviewed regularly to ensure that they are not holding important messages.