A draft dilemma

A ship was proceeding to the discharge port. The agent at the discharge port advised the shipper that the maximum draft in was 40ft and as this vessel was just under 41ft she made an interim call to unload some cargo.

The agent subsequently received a claim from the shippers. They alleged the information was incorrect and that vessels with drafts in excess of 40ft could still call at the port but with two pilots on-board instead of one. As a result, the shipper said the agent should have been aware of this possibility and claimed US$ 250,000 for the costs of the wasted call and transporting the excess cargo.

The agent could not find the provision on the local pilots’ association’s website which gave maximum draft of 40ft. They asked the shipper where they got the information from. The shipper pointed out there was a link on the agent’s own website to an article stating that vessels over 40ft can call providing there are two pilots on board. The agent contacted the local pilots association who confirmed it was possible to call with a draft of 41ft and that the information was on their website, just not easy to find. The agents had incorporated standard trading conditions which limited their liability to 10 times their agency fee. This amounted to $ 36,500. This sum was accepted by the shipper and ITIC reimbursed the agent.

This claim shows how important it is for terms and conditions to be incorporated into all business dealings. ITIC’s terms and conditions, and guidelines for incorporating these, can be found on the website: https://www.itic-insure.com/knowledge/standardtrading-conditions/standard-tradingconditions-indemnity-wording/