Thursday, May 23, 2024

How do you calculate loss following a ‘triangle form’ deviation?

The blue line represents the direct route that usually the ships follow for this voyage. In this example, the ship followed the route in the brown line instead of the blue line as to conduct crew changes in Manila. This deviation resulted to time lost and more bunkers being consumed.

Similar issues are very common in the shipping industry; especially the last two years due to frequent crew changes given the COVID 19 restrictions. To deal with this issue, the industry has adopted new charter clauses that spell out issues of liability but the there is uncertainty on the methods to calculate the loss; thus leaving exposed the parties to costly disputes.

From a practical & a commercial standpoint, this short article (i) considers the complexities to calculate loss; (ii) discusses the various methodologies used to calculate loss; and (iii) highlights the potential difficulties, when using performance models, to assess the theoretical performance on the notional voyage thus arriving at a speculative ‘loss’ figure.

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