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MARINE LUBRICANTS MARINE BUSINESS. INDIAN MARITIME HISTORY Indian Maritime Administration was born in 1929 in the form of three Mercantile Departments.

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Presentation on theme: "MARINE LUBRICANTS MARINE BUSINESS. INDIAN MARITIME HISTORY Indian Maritime Administration was born in 1929 in the form of three Mercantile Departments."— Presentation transcript:

1 MARINE LUBRICANTS MARINE BUSINESS

2 INDIAN MARITIME HISTORY Indian Maritime Administration was born in 1929 in the form of three Mercantile Departments (MMDs) – Mumbai, Chennai and Kolkata. Indian Maritime Administration was born in 1929 in the form of three Mercantile Departments (MMDs) – Mumbai, Chennai and Kolkata. They were set up fundamentally to implement the first international convention on ‘Safety of Life at Sea’ (SOLAS) Convention, 1974 and Loadline Convention. They were set up fundamentally to implement the first international convention on ‘Safety of Life at Sea’ (SOLAS) Convention, 1974 and Loadline Convention.

3 INDIAN MARITIME HISTORY The main objectives of MMDs are to administer the various Merchant Shipping Laws and rules relating to safety of ships and life at sea, registration of ships, tonnage measurement, crew accommodation, surveys for load line, safety construction, prevention of pollution, inquiries into shipping casualties and wrecks, etc. The main objectives of MMDs are to administer the various Merchant Shipping Laws and rules relating to safety of ships and life at sea, registration of ships, tonnage measurement, crew accommodation, surveys for load line, safety construction, prevention of pollution, inquiries into shipping casualties and wrecks, etc.

4 INDIAN MARITIME HISTORY Mercantile Marine Department, is headed by the Principal Officer, and supported by Nautical Surveyors, Engineer Ship Surveyors, Radio Inspector, Seamen Welfare Officer and supporting staff. Mercantile Marine Department, is headed by the Principal Officer, and supported by Nautical Surveyors, Engineer Ship Surveyors, Radio Inspector, Seamen Welfare Officer and supporting staff.

5 INDIAN MARITIME HISTORY In September 1949 the Directorate General of Shipping was established at Mumbai. In September 1949 the Directorate General of Shipping was established at Mumbai. It is an attached office of the Ministry of Shipping, Govt. of India and deals with all executive matters, relating to merchant shipping. It is an attached office of the Ministry of Shipping, Govt. of India and deals with all executive matters, relating to merchant shipping. Implementation of shipping policy and legislation, development of coastal shipping and various other aspects related to the Indian shipping industry comes under its purview. Implementation of shipping policy and legislation, development of coastal shipping and various other aspects related to the Indian shipping industry comes under its purview.

6 The oceans and seas cover seven-tenths of the globe. The oceans and seas cover seven-tenths of the globe. India has a long coastline of 5,560 Kms. India has a long coastline of 5,560 Kms.

7 India is served by twelve major ports, that account for more than 75% of the total sea borne trade, and 185 small and minor ports, administered by the state maritime boards, many of which are doing exceptionally well, especially in the coastal shipping areas. India is served by twelve major ports, that account for more than 75% of the total sea borne trade, and 185 small and minor ports, administered by the state maritime boards, many of which are doing exceptionally well, especially in the coastal shipping areas.

8 India is the fifth largest nation supplying manning complements of efficient certified officers and ratings to the world. India is the fifth largest nation supplying manning complements of efficient certified officers and ratings to the world. Indian seafarers have a quality of their own and are most sought after by the world shipping companies. Indian seafarers have a quality of their own and are most sought after by the world shipping companies.

9 The share of cargo transported through inland waterways in India is barely 1%. The share of cargo transported through inland waterways in India is barely 1%. The potential for navigable inland waterways in India, comprising of river system, canal backwaters, creeks and tidal inlets, is immense. The potential for navigable inland waterways in India, comprising of river system, canal backwaters, creeks and tidal inlets, is immense.

10 A major chunk of India’s sea-borne cargo is accounted for by crude and petroleum products. A major chunk of India’s sea-borne cargo is accounted for by crude and petroleum products. India has become a new key destination for crude supply. India has become a new key destination for crude supply.

11 Transportation of energy sources is going to be the major thrust area in the years to come. Transportation of energy sources is going to be the major thrust area in the years to come. The prospect has attracted several global players into India. The prospect has attracted several global players into India. This is just a beginning – a curtain raiser for the shape of things to come. This is just a beginning – a curtain raiser for the shape of things to come.

12 Generic Terms

13 BUNKERS - fuel consumed by the engines of a ship; Compartments or tanks in a ship for fuel storage. BUNKERS - fuel consumed by the engines of a ship; Compartments or tanks in a ship for fuel storage. BARGE - flat-bottomed boat designed to carry cargo on inland waterways, usually without engines or crew accommodations. Barges can be lashed together and either pushed or pulled by tugs, carrying cargo of 60,000 tons or more. BARGE - flat-bottomed boat designed to carry cargo on inland waterways, usually without engines or crew accommodations. Barges can be lashed together and either pushed or pulled by tugs, carrying cargo of 60,000 tons or more.

14 CARRIERS - owners or operators of vessels providing transportation to shippers. CARRIERS - owners or operators of vessels providing transportation to shippers. CARGO HANDLING - the act of loading and discharging a cargo ship. CARGO HANDLING - the act of loading and discharging a cargo ship.

15 NAUTICAL MILE - distance of one minute of longitude at the equator, approximately 6, feet. The metric equivalent is 1852 meters. NAUTICAL MILE - distance of one minute of longitude at the equator, approximately 6, feet. The metric equivalent is 1852 meters. KNOT - unit of speed in navigation which is the rate of nautical mile (6,080 feet or 1,852 meters) per hour. KNOT - unit of speed in navigation which is the rate of nautical mile (6,080 feet or 1,852 meters) per hour. HULL - shell or body of a ship. HULL - shell or body of a ship.

16 QUAY - A structure attached to land to which a vessel is moored. QUAY - A structure attached to land to which a vessel is moored. ABAFT - A point beyond the midpoint of a ships length, towards the rear or stern. ABAFT - A point beyond the midpoint of a ships length, towards the rear or stern. AFT - in, near, or toward the stern of the vessel. AFT - in, near, or toward the stern of the vessel.

17 ASTERN - A backward direction in the line of a vessel's fore and aft line; Behind. If a vessel moves backwards it is said to move astern; Opposite to ahead. ASTERN - A backward direction in the line of a vessel's fore and aft line; Behind. If a vessel moves backwards it is said to move astern; Opposite to ahead. AT SEA - in marine insurance this phrase applies to a ship which is free from its moorings and ready to sail. AT SEA - in marine insurance this phrase applies to a ship which is free from its moorings and ready to sail.

18 BEAM - the width of a ship. Also called breadth. BEAM - the width of a ship. Also called breadth. BOW - the front of a vessel. BOW - the front of a vessel. BRIDGE - used loosely to refer to the navigating section of the vessel where the wheel house and chart room are located; Erected structure amidships or aft or very rarely fore over the main deck of a ship to accommodate the wheelhouse. BRIDGE - used loosely to refer to the navigating section of the vessel where the wheel house and chart room are located; Erected structure amidships or aft or very rarely fore over the main deck of a ship to accommodate the wheelhouse.

19 DANGEROUS CARGO - all substances of an inflammable nature which are liable to spontaneous combustion either in themselves or when stowed adjacent to other substances and, when mixed with air, are liable to generate explosive gases or produce suffocation or poisoning or tainting of foodstuffs. DANGEROUS CARGO - all substances of an inflammable nature which are liable to spontaneous combustion either in themselves or when stowed adjacent to other substances and, when mixed with air, are liable to generate explosive gases or produce suffocation or poisoning or tainting of foodstuffs.

20 TANK BARGE - A barge designed for the carriage of liquid bulk cargoes. TANK BARGE - A barge designed for the carriage of liquid bulk cargoes. TANK CLEANING - removal of all traces of a cargo from the tanks of a tanker normally by means of high pressure water jets. TANK CLEANING - removal of all traces of a cargo from the tanks of a tanker normally by means of high pressure water jets.

21 HARBOR MASTER - A person usually having the experience of a certificated master mariner and having a good knowledge of the characteristics of the port and its whole area. He administers the entire shipping movements that take place in and within reach of the port he is responsible for. HARBOR MASTER - A person usually having the experience of a certificated master mariner and having a good knowledge of the characteristics of the port and its whole area. He administers the entire shipping movements that take place in and within reach of the port he is responsible for.

22 CLASSIFICATION SOCIETY - worldwide experienced and reputable societies which undertake to arrange inspections and advise on the hull and machinery of a ship. An autonomous organization that supervises vessels during their construction and afterward, in respect to their seaworthiness, and the placing of vessels in grades or "classes" according to the society's rules for each particular type. It is not compulsory by law that a ship owner have his vessel built according to the rules of any classification society; But in practice, the difficulty in securing satisfactory insurance rates for an un-classed vessel makes it a commercial obligation. CLASSIFICATION SOCIETY - worldwide experienced and reputable societies which undertake to arrange inspections and advise on the hull and machinery of a ship. An autonomous organization that supervises vessels during their construction and afterward, in respect to their seaworthiness, and the placing of vessels in grades or "classes" according to the society's rules for each particular type. It is not compulsory by law that a ship owner have his vessel built according to the rules of any classification society; But in practice, the difficulty in securing satisfactory insurance rates for an un-classed vessel makes it a commercial obligation.

23

24 The Indian Register of Shipping (IRS) is an internationally recognized independent ship classification society, founded in India in The Indian Register of Shipping (IRS) is an internationally recognized independent ship classification society, founded in India in 1975.

25 Within a short span of 16 years, IRS (Indian Register of Shipping) has become an associate member of the International Association of Classification Societies (IACS), the major international body of classification societies. Within a short span of 16 years, IRS (Indian Register of Shipping) has become an associate member of the International Association of Classification Societies (IACS), the major international body of classification societies. International Association of Classification Societies (IACS) International Association of Classification Societies (IACS) Admission in IACS is granted only to the best and signifies high standards, excellent reputation and professional competence. Admission in IACS is granted only to the best and signifies high standards, excellent reputation and professional competence.

26 IRS (Indian Register of Shipping) provides professionally competent, completely independent and highly efficient third party technical inspection and certification services for all types of ships and structures. IRS (Indian Register of Shipping) provides professionally competent, completely independent and highly efficient third party technical inspection and certification services for all types of ships and structures. These services have also been expanded to cover a range of offshore and industrial projects. These services have also been expanded to cover a range of offshore and industrial projects.

27 MARPOL MARine POLlution

28 MARPOL 73/78 - the international convention for the prevention of pollution from ships, 1973, as modified by the protocol of MARPOL 73/78 - the international convention for the prevention of pollution from ships, 1973, as modified by the protocol of MEPC - marine environment protection committee, a major committee within the International Maritime Organization. MEPC - marine environment protection committee, a major committee within the International Maritime Organization.

29 Although safety was and remains International Maritime Organization’s (IMO's) most important responsibility, a new problem began to emerge – Although safety was and remains International Maritime Organization’s (IMO's) most important responsibility, a new problem began to emerge – MARINE POLLUTION MARINE POLLUTION

30 The growth in the amount of oil being transported by sea and in the size of oil tankers was of particular concern and the Torrey Canyon disaster of 1967, in which 120,000 tonnes of oil was spilled, demonstrated the scale of the problem. The growth in the amount of oil being transported by sea and in the size of oil tankers was of particular concern and the Torrey Canyon disaster of 1967, in which 120,000 tonnes of oil was spilled, demonstrated the scale of the problem.

31 During the next few years International Maritime Organization (IMO) introduced the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78). During the next few years International Maritime Organization (IMO) introduced the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (MARPOL 73/78). It covers not only accidental and operational oil pollution but also pollution by chemicals, goods in packaged form, sewage, garbage and air pollution. It covers not only accidental and operational oil pollution but also pollution by chemicals, goods in packaged form, sewage, garbage and air pollution.

32 MARPOL Annex VI Prevention of Air Pollution from Ships (entry into force 19 May 2005)

33 Emissions From Shipping Emissions from shipping can be an issue for local authorities with major ports. Emissions from shipping can be an issue for local authorities with major ports. Also, as emissions from other sources decline, global emissions from shipping are becoming more and more significant, with this source expected to account for 60% of total SO 2 emissions in the EU by Also, as emissions from other sources decline, global emissions from shipping are becoming more and more significant, with this source expected to account for 60% of total SO 2 emissions in the EU by 2010.

34 However, bunker fuel emissions from international shipping had so far been excluded from any commitment in the protocol. However, bunker fuel emissions from international shipping had so far been excluded from any commitment in the protocol. After looking at the magnitude of greenhouse gas emissions from international shipping, the best solution was for International Maritime Organization (IMO) to agree on a global shipping emissions target that would be comparable to targets of industrialised countries. After looking at the magnitude of greenhouse gas emissions from international shipping, the best solution was for International Maritime Organization (IMO) to agree on a global shipping emissions target that would be comparable to targets of industrialised countries.

35 In 1997, the 3 rd conference of parties to the UN framework convention on climate change adopted the Kyoto Protocol as a consequence of increasing evidence of a manmade global warming of the atmosphere. In 1997, the 3 rd conference of parties to the UN framework convention on climate change adopted the Kyoto Protocol as a consequence of increasing evidence of a manmade global warming of the atmosphere. Binding greenhouse gas emission reduction targets for industrialised countries were agreed upon. Binding greenhouse gas emission reduction targets for industrialised countries were agreed upon.

36 Shipping is a global industry and efforts to reduce emissions are most effective when agreed and implemented at an international level. Shipping is a global industry and efforts to reduce emissions are most effective when agreed and implemented at an international level. Annex VI to MARPOL 73/78 is a International Maritime Organization (IMO) regulation which aims to prevent and reduce air pollution from ships. Annex VI to MARPOL 73/78 is a International Maritime Organization (IMO) regulation which aims to prevent and reduce air pollution from ships.

37 The MARPOL 73/78 Annex VI Regulations for the Prevention of Air Pollution from Ships entered into force on May 19, The MARPOL 73/78 Annex VI Regulations for the Prevention of Air Pollution from Ships entered into force on May 19, The regulation set limits on sulphur oxide (SO x ) and nitrogen oxide (NO x ) emissions from ship exhausts, and prohibit deliberate emissions of ozone depleting substances. The regulation set limits on sulphur oxide (SO x ) and nitrogen oxide (NO x ) emissions from ship exhausts, and prohibit deliberate emissions of ozone depleting substances.

38 The agreement set a global sulphur cap of 4.5% by mass for all heavy marine bunker fuels, and a 1.5% cap by mass for fuels burnt in special SO x Emission Control Areas (SECA). The agreement set a global sulphur cap of 4.5% by mass for all heavy marine bunker fuels, and a 1.5% cap by mass for fuels burnt in special SO x Emission Control Areas (SECA). Alternatively, ships must fit an exhaust gas cleaning system or use any other technological method to limit SO x emissions in these areas. Alternatively, ships must fit an exhaust gas cleaning system or use any other technological method to limit SO x emissions in these areas.

39 The agreement also set limits on NO x emissions from diesel engines. The agreement also set limits on NO x emissions from diesel engines. As NO x emissions from shipping are primarily from engines, the MARPOL Annex provides a mandatory technical specification for ship engines manufactured since 1 st January As NO x emissions from shipping are primarily from engines, the MARPOL Annex provides a mandatory technical specification for ship engines manufactured since 1 st January 2000.

40 The global limit for the sulphur content of marine bunkers set by the Regulations at 4.5% m/m is not expected to have much operational impact as the incidence of marine fuels exceeding this level is not high. The global limit for the sulphur content of marine bunkers set by the Regulations at 4.5% m/m is not expected to have much operational impact as the incidence of marine fuels exceeding this level is not high. The main impact will be felt when the Baltic and North Sea/English Channel SOx Emission Control Areas (SECAs) become operational on May 19, 2006 and in November 2007, respectively, further limiting sulphur content of fuels to 1.5% m/m. The main impact will be felt when the Baltic and North Sea/English Channel SOx Emission Control Areas (SECAs) become operational on May 19, 2006 and in November 2007, respectively, further limiting sulphur content of fuels to 1.5% m/m.

41 IMO has currently agreed on the designation of two SECA’s as per below: IMO has currently agreed on the designation of two SECA’s as per below: 1. The Baltic Sea Area which will enter into force on the 19 th May The North Sea Area and the English Channel has also been agreed, but due to the amendment process in IMO, it will not enter into force as a SECA until 19 th November 2007.

42 It is expected that further SECA’s will be designated in the future and IMO has set forth certain criteria for designating such SECA’s. It is expected that further SECA’s will be designated in the future and IMO has set forth certain criteria for designating such SECA’s.

43 For the sake of good order, it should be noted that the limitations in sulphur content applies to all fuel oils (heavy fuel oils, marine diesel oils and gas oils) and regardless of use on board (i.e. In combustion engines, boilers, gas turbines etc.). For the sake of good order, it should be noted that the limitations in sulphur content applies to all fuel oils (heavy fuel oils, marine diesel oils and gas oils) and regardless of use on board (i.e. In combustion engines, boilers, gas turbines etc.).

44 Currently, the average sulphur content in fuel oils is in the region of 2.7%. Currently, the average sulphur content in fuel oils is in the region of 2.7%. Results of a comprehensive number of fuel samples tested indicate that only 0.2% of the fuel oils tested have a sulphur content exceeding the required 4.5%. Results of a comprehensive number of fuel samples tested indicate that only 0.2% of the fuel oils tested have a sulphur content exceeding the required 4.5%.

45 However, it also indicates that only 4% of the fuel oils supplied today have a sulphur content of 1.5% or less. However, it also indicates that only 4% of the fuel oils supplied today have a sulphur content of 1.5% or less. It has been estimated that the low sulphur fuel oil demand in the SECA’s will be in the region of million tons per year, of which approximately 0.7 million tons per year is available in north west Europe today. It has been estimated that the low sulphur fuel oil demand in the SECA’s will be in the region of million tons per year, of which approximately 0.7 million tons per year is available in north west Europe today.

46 It is generally acknowledged that the above will lead to increased prices for low sulphur fuel oils and a price hike from 25 to 100 USD/ton has been indicated depending on method of production and market availability/demand. It is generally acknowledged that the above will lead to increased prices for low sulphur fuel oils and a price hike from 25 to 100 USD/ton has been indicated depending on method of production and market availability/demand.

47 Although it has been indicated that the total world wide availability of low sulphur fuel is adequate with the current SECA’s and associated low sulphur limit (1.5%), it is highly uncertain as to whether the availability will be adequate in world wide ports. Although it has been indicated that the total world wide availability of low sulphur fuel is adequate with the current SECA’s and associated low sulphur limit (1.5%), it is highly uncertain as to whether the availability will be adequate in world wide ports.

48 It should further be noted that currently, low sulphur fuel is in general only available to operators with contract agreements with oil majors. It should further be noted that currently, low sulphur fuel is in general only available to operators with contract agreements with oil majors. Future spot availability is thus dependent on the developments in market demand and price after entry into force of SECA’s. Future spot availability is thus dependent on the developments in market demand and price after entry into force of SECA’s.

49 Currently only marine gas oils used for voyages within the EU are regulated by the Sulphur content of liquid fuels directive 99/32/EC. Currently only marine gas oils used for voyages within the EU are regulated by the Sulphur content of liquid fuels directive 99/32/EC. The maximum sulphur limit for these fuels since 1 st July 2000 has been 0.2%. The maximum sulphur limit for these fuels since 1 st July 2000 has been 0.2%. This will be reduced to 0.1% from 1 st January This will be reduced to 0.1% from 1 st January 2008.

50 BUNKERING OPERATIONS

51 A bunker transfer process has to comply with the following operational requirements: A bunker transfer process has to comply with the following operational requirements: Safety requirements Safety requirements Operational requirements Operational requirements Documentation requirements Documentation requirements

52 Safety requirements Safety is the corner-stone of any good operation. Safety is the corner-stone of any good operation. In the absence of safe working procedures and practices, no operation or venture will succeed. In the absence of safe working procedures and practices, no operation or venture will succeed.

53 Safety requirements Important safety requirements: 1. Personal protective equipment in use. 2. Dangers of toxic gases addressed. 3. Permit to work system followed. 4. Life saving appliances kept in readiness. 5. Pollution prevention gear kept in readiness. 6. Fire-fighting equipment kept in readiness.

54 Operational requirements Important operational requirements are: 1. Pre-transfer checks carried out. 2. Sampling procedures understood and adhered. 3. Equipment onboard kept in optimum condition. 4. Personnel onboard are well rested. 5. Material Safety Data Sheets circulated.

55 Documentation requirement A complete bunkering operation should include the following documentation: 1. Bunker requisition form 2. Statement of fact 3. Non-cargo tank declaration / inspection form 4. Tank measurement / calculation form 5. Bunker delivery note

56 Documentation requirement A complete bunkering operation should include the following documentation: 6. Meter delivery report 7. Sample witnessing and receipt 8. Note of protest from cargo officer (if applicable)

57 TANKER MANAGEMENT

58 VESSELS TYPEDWT RANGE (MT) FROMUPTO SMALL VESSEL BELOW16499 GENERAL PURPOSE (GP) MEDIUM RANGE (MR) LONG RANGE I (LR-1) LONG RANGE II (LR-II) -- AFRAMAX SUEZMAX VERY LARGE CRUDE (VLCC) ULTRA LARGE CRUDE (ULCC) & ABOVE CLASSIFICATION OF VESSELS

59 CRUDE OIL. CRUDE OIL. PRODUCT –BLACK OIL –WHITE OIL. PRODUCT –BLACK OIL –WHITE OIL. COMBINATION CARRIER (OBO). COMBINATION CARRIER (OBO). VEGETABLE CARRIER. VEGETABLE CARRIER. CHEMICAL TANKER. CHEMICAL TANKER. LPG CARRIER. LPG CARRIER.

60 BULK CARRIER - ship specifically designed to transport vast amounts of cargoes such as sugar, grain, wine, ore, chemicals, etc. BULK CARRIER - ship specifically designed to transport vast amounts of cargoes such as sugar, grain, wine, ore, chemicals, etc.

61 Bulk Carrier

62 DRY CARGO SHIP - Vessel which carriers all merchandise, excluding liquid in bulk. DRY CARGO SHIP - Vessel which carriers all merchandise, excluding liquid in bulk.

63 Dry Cargo Ship

64 CONTAINER SHIP - A ship constructed in such a way that she can easily stack containers near and on top of each other as well as on deck. Container ships usually carry in the range of 25,000 to 50,000 deadweight tons. CONTAINER SHIP - A ship constructed in such a way that she can easily stack containers near and on top of each other as well as on deck. Container ships usually carry in the range of 25,000 to 50,000 deadweight tons.

65 Container Ship

66 TANKER - A tanker is a bulk carrier designed to transport liquid cargo, most often petroleum products. Oil tankers vary in size from small coastal vessels of 1,500 tons deadweight, through medium-sized ship of 60,000 tons, to the giant VLCCs (very large crude carriers). TANKER - A tanker is a bulk carrier designed to transport liquid cargo, most often petroleum products. Oil tankers vary in size from small coastal vessels of 1,500 tons deadweight, through medium-sized ship of 60,000 tons, to the giant VLCCs (very large crude carriers). VLCC - very large crude carriers: tankers between 200,000 and 300,000 dwt. VLCC - very large crude carriers: tankers between 200,000 and 300,000 dwt. ULCC - ultra large crude carriers. Tankers larger than 300,000 dwt. ULCC - ultra large crude carriers. Tankers larger than 300,000 dwt.

67 Oil Tankers

68 JAHRE VIKING Length Meters Beam Meters Draft Meters Displacement GT (ITC 69): 260,851 / NT (ITC 69): 214,793 / DWT: 564,763 / Cubic: 658,362

69 PASSENGER SHIP - A passenger ship that its authorized to carry over twelve passengers. PASSENGER SHIP - A passenger ship that its authorized to carry over twelve passengers.

70 Passenger Ships

71 REEFER - Refrigerator ship, a vessel designed to carry goods requiring refrigeration, such as meat and fruit. A reefer ship has insulated holds into which cold air is passed at the temperature appropriate to the goods being carried. REEFER - Refrigerator ship, a vessel designed to carry goods requiring refrigeration, such as meat and fruit. A reefer ship has insulated holds into which cold air is passed at the temperature appropriate to the goods being carried.

72 Reefer

73 VEHICLE CARRIER - Ship with facilities for vehicles to drive on and off (roll-on roll-off); a system of loading and discharging a ship whereby the cargo is driven on and off on ramps. Equipped with large openings at bow and stern and sometimes also in the side, the ship permits rapid loading and discharge with hydraulically operated ramps providing easy access. VEHICLE CARRIER - Ship with facilities for vehicles to drive on and off (roll-on roll-off); a system of loading and discharging a ship whereby the cargo is driven on and off on ramps. Equipped with large openings at bow and stern and sometimes also in the side, the ship permits rapid loading and discharge with hydraulically operated ramps providing easy access.

74 Vehicle Carrier

75 GAS CARRIER - Liquefied natural gas carrier, perhaps the most sophisticated of all commercial ships. The cargo tanks are made of a special aluminum alloy and are heavily insulated to carry natural gas in its liquid state at a temperature of -285°F. The LNG ship costs about twice as much as an oil tanker of the same size. GAS CARRIER - Liquefied natural gas carrier, perhaps the most sophisticated of all commercial ships. The cargo tanks are made of a special aluminum alloy and are heavily insulated to carry natural gas in its liquid state at a temperature of -285°F. The LNG ship costs about twice as much as an oil tanker of the same size.

76 Gas Carrier

77 SPECIALIST SHIP – Designed with a specific purpose at the time of construction. SPECIALIST SHIP – Designed with a specific purpose at the time of construction.

78 Specialist Ship - Dredger

79 Specialist Ship - Heavy Lift

80 SPECIALIST SHIP – INS VIRAT – AIRCRAFT CARRIER

81 CHARTERING OF TANKERS

82 WHAT IS TANKER CHARTERING? WHAT IS TANKER CHARTERING?  A PROCESS INVOLVES NEGOTIATIONS BETWEEN SHIP OWNERS & A CHARTERER (OIL CO.) FOR HIRING A SHIP (TIME/VOYAGE OR COA BASIS) FOR CARRIAGE OF CRUDE OIL/POL AT MOST COMPETITIVE RATES, TERMS & CONDITIONS.  FREIGHT RATES ARE INFLUENCED BY VARIOUS INTERNATIONAL SUPPLY DEMAND FORCES & OPPORTUNITY COSTS.  INTERNATIONAL FREIGHT MKT. HAS NEITHER FLOOR LEVEL NOR ANY CEILING.  DIRECT NEGOTIATIONS OR THRU BROKERS MOSTLY ON /PHONE/FAX WITH PROPER DOCUMENTATION/AUDIT TRAIL/RECORDING.

83 83 WHAT IS TANKER CHARTERING?  A BRIEF NOTE GIVING FIXTURE RECAP ON MAIN TERMS THROUGH /FAX IS EXCHANGED BETWEEN PARTIES AS EVIDENCE OF CONTRACT  AS PER INTERNATIONAL INDUSTRY PRACTICE, CHARTERING IS NOT A TWO BID PROCESS (I.E.TECH.& PRICE) BUT IS A COMPOSITE BID SYSTEM INVOLVING TECHNO-COMMERCIAL EVALUATION OF MULTIPLE PARAMETERS LIKE SPEED/DEAD FRT./YEAR BUILT ETC. HAVING ITS VARYING IMPACT ON COST  CREDENTIALS OF SHIP OWNERS IS CHECKED THROUGH IMB/ BIMCO/BROKERS BEFORE NEGOTIATION  CONSIDERABLE FINANCIAL EXPOSURE FOR BOTH – CHARTERER & SHIP OWNERS.

84 TYPE OF CHARTER VOYAGE CHARTER FOR ONE VOYAGE FOR ONE VOYAGE 1 OR 2 LOAD PORT/ DISPORTS 1 OR 2 LOAD PORT/ DISPORTS FREIGHT, DEMURRAGE DEAD FREIGHT FREIGHT, DEMURRAGE DEAD FREIGHT BUNKER PORT CHARGES ON SHIP OWNERS A/C. BUNKER PORT CHARGES ON SHIP OWNERS A/C. CARGO RELATED CHARGES ON CHARTERERS A/C. CARGO RELATED CHARGES ON CHARTERERS A/C. TIME CHARTER FOR TIME/PERIOD. FOR TIME/PERIOD. VESSEL AT CHARTERERS DISPOSAL. VESSEL AT CHARTERERS DISPOSAL. MONTHLY CHARTER HIRE IN ADVANCE. MONTHLY CHARTER HIRE IN ADVANCE. BUNKER & PORT CHARGES ON CHARTERERS ACCOUNT BUNKER & PORT CHARGES ON CHARTERERS ACCOUNT CARGO RELATED CHARGES ON CHARTERERS A/C. CARGO RELATED CHARGES ON CHARTERERS A/C.

85

86

87 Lay day/Lay time. Lay day/Lay time. Demurrage / Despatch. Demurrage / Despatch. Lighterage operation:Transhipment. Lighterage operation:Transhipment. :Mv/Dv - Double Banking. :Mv/Dv - Double Banking. :Fenders. :Fenders. Charter Party – Time/Voyage. Charter Party – Time/Voyage. Bill Of Lading. Bill Of Lading. DW – Deadweight :Plimsoll Mark. DW – Deadweight :Plimsoll Mark. :Displacement :Displacement

88 ETA/ETB/ETC/ETD/NOR. ETA/ETB/ETC/ETD/NOR. LOA/Beam/Fore/Aft. LOA/Beam/Fore/Aft. GRT/NRT. GRT/NRT. Draft-Port/Ship. Draft-Port/Ship. FOB/C&F/CIF. FOB/C&F/CIF. Ballasting/Deballasting/SBT/CBT/COW. Ballasting/Deballasting/SBT/CBT/COW. Stripping/Trimming/List. Stripping/Trimming/List. OBQ-On Board Quantity (ROB).On carried. OBQ-On Board Quantity (ROB).On carried.

89 CHARTER HIRE CHARTER HIRE FREIGHT-DEADFREIGHT FREIGHT-DEADFREIGHT BUNKER COST- FO/LDO/HFHSD. BUNKER COST- FO/LDO/HFHSD. STEAMING/PUMPING. STEAMING/PUMPING. PORT CHARGES: PORT CHARGES: SHIP RELATED : PILOTAGE SHIP RELATED : PILOTAGE : TUG./MOORING : TUG./MOORING : PIER/PORT DUES : PIER/PORT DUES

90 : LIGHT DUES. : OPC. : OPC. : HULL INSURANCE. : HULL INSURANCE. CARGO RELATED : WHARFAGE. CARGO RELATED : WHARFAGE. : OCTROI. : OCTROI. : CUSTOM/EXCISE DUTY. : CUSTOM/EXCISE DUTY. : INSURANCE PREMIUM. : INSURANCE PREMIUM.

91 DRY DOCKING CHARGES. DRY DOCKING CHARGES. DEMURRAGE/DETENTION/DEV. DEMURRAGE/DETENTION/DEV. DUTY ON SHIPS’ STORES. DUTY ON SHIPS’ STORES. PORT DISBURSEMENT. PORT DISBURSEMENT. ADVANCE TO MASTER. ADVANCE TO MASTER.

92 OWNER (Revenue) CHARTERER (Transport) THE CHARTER PARTY (A contract) BAREBOAT TIME VOYAGE Trip Time Charter Consecutive voyage Contract of Affreightment

93 CHARTERING DECISIONS : TIME Vs. VOYAGE In a UPGOING & STRONG tanker market a ship owner would like to give a tanker on a voyage charter basis to earn higher freight rates from voyage to voyage basis. In a UPGOING & STRONG tanker market a ship owner would like to give a tanker on a voyage charter basis to earn higher freight rates from voyage to voyage basis. In case the market indicates falling trend of freight rates the ship owners would like to give the ship on long time charter basis to protect himself from the losses. In case the market indicates falling trend of freight rates the ship owners would like to give the ship on long time charter basis to protect himself from the losses. If the Charterer is sure about the long term employment and exercises utmost diligence in the usage of the vessel he should opt for a time charter especially in up going frt. market. If the Charterer is sure about the long term employment and exercises utmost diligence in the usage of the vessel he should opt for a time charter especially in up going frt. market. Time charter rates comparison with voyage charter rates as on for following size of vessels : Time charter rates comparison with voyage charter rates as on for following size of vessels :

94 Types of Time Charter : Types of Time Charter : Trip Time Charter - Short period, flexibility to charterers, commonly practiced veg.oil, chemicals,dry bulk cargo.Trip Time Charter - Short period, flexibility to charterers, commonly practiced veg.oil, chemicals,dry bulk cargo. Time Charter - Voyage expenses, pumping at loadport and disport on charterers account.Time Charter - Voyage expenses, pumping at loadport and disport on charterers account. TANKER TIME CHARTER

95 Duty to maintain- Due diligence by owners to maintain and restore the vsl to required condition, charterers right to putoff the vsl.Duty to maintain- Due diligence by owners to maintain and restore the vsl to required condition, charterers right to putoff the vsl. Limits of trading period- Charterer’s option.Limits of trading period- Charterer’s option. Final voyage-Redelivery, where & when.Final voyage-Redelivery, where & when. Trading limits-WIWLTrading limits-WIWL TANKER TIME CHARTER

96 Lay days/Canceling-Charterer’s option.Lay days/Canceling-Charterer’s option. Owners to provide-All provisions, wages, Ins.etcOwners to provide-All provisions, wages, Ins.etc Charterers to provide-Generally for dry cargo.Charterers to provide-Generally for dry cargo. Rate & Payment of Hire-Delay in payment, tanker withdrawal clauses and etc.Rate & Payment of Hire-Delay in payment, tanker withdrawal clauses and etc. Instructions and Logs-Performance monitoring.Instructions and Logs-Performance monitoring. Directions and conduct of vessel’s personnelDirections and conduct of vessel’s personnel TANKER TIME CHARTER

97 Bunkers-Supply of quality bunkers.Bunkers-Supply of quality bunkers. Supernumeraries-Representative on Board.Supernumeraries-Representative on Board. Sub-letting-Liabilities from mal- performance.Sub-letting-Liabilities from mal- performance. Loss of vessel-Total loss or Constructive loss.Loss of vessel-Total loss or Constructive loss. Off-Hire – Shelf time form specifies the time.Off-Hire – Shelf time form specifies the time. Periodical dry docking-Area of dry docking.Periodical dry docking-Area of dry docking. TANKER TIME CHARTER

98 Performance clause-Speed, bunker consumption and port stay.Performance clause-Speed, bunker consumption and port stay. Salvage-Apportionment of expenseSalvage-Apportionment of expense Lien – Each party’s rights of lien.Lien – Each party’s rights of lien. Exception – Unplanned repairs & breakdown.Exception – Unplanned repairs & breakdown. Injurious cargoes – Explosives.Injurious cargoes – Explosives. TANKER TIME CHARTER

99 Laying up – Charterers and Owners to consult.Laying up – Charterers and Owners to consult. Requisition by Govt.Requisition by Govt. Protective clauses – Both to blame collision clause, New Jason clause, Clause Paramount.Protective clauses – Both to blame collision clause, New Jason clause, Clause Paramount. TOVALOP & ITOPF – P&I Club Insurance.TOVALOP & ITOPF – P&I Club Insurance. Law and Litigation – English law.Law and Litigation – English law. TANKER TIME CHARTER

100 VOIYAGE CHARTER CRUDE : VOYAGE – RASTANURA TO VIZAG VOYAGE – RASTANURA TO VIZAG SMAX ( MT) $ / MT SMAX ( MT) $ / MT LS FREIGHT $ 3.95 MILLION RS CRORES AT WS 335 LS FREIGHT $ 3.95 MILLION RS CRORES AT WS 335 LPG : VOYAGE – RASTANURA TO VIZAG VOYAGE – RASTANURA TO VIZAG VLGC (39000 MT) $ / MT VLGC (39000 MT) $ / MT LS FREIGHT $ 1.95 MILLION RS CRORES LS FREIGHT $ 1.95 MILLION RS CRORES

101 OMC AND INDIAN SHIPPING INDUSTRY Almost 70% of imported crude for OMC is carried by Indian Fleet Entire indigenous crude is transported by Indian fleet for OMC Out of total 18 product tankers on Time Charter to Oil Industry, OMC handles 11 of them OMC is about to start direct chartering of vessels shortly

102 CHARTERING PROCEDURE Contd… Floating of enquiry Floating of enquiry Receipt of offers Receipt of offers Evaluation of offers Evaluation of offers Negotiations / counters Negotiations / counters Fixtures on “Subjects” Fixtures on “Subjects” Charter Party Charter Party

103 WE SHOULD KNOW …… Tanker Market structure Tanker Market structure Worldscale Worldscale A F R A A F R A Factors which have influenced freight market levels Factors which have influenced freight market levels

104 TANKER MARKET STRUCTURE 3 Players 3 Players –Owners –Charterers –Brokers

105 THE SHIP BROKER Collects and distributes information about the markets Collects and distributes information about the markets Acts as an intermediary for a negotiation Acts as an intermediary for a negotiation Provides the skill and expertise to deal with the post fixture administration & operations Provides the skill and expertise to deal with the post fixture administration & operations Ethical standards ??? Ethical standards ???

106 THE TANKER MARKET Works very quickly Works very quickly Address commission Address commission Brokerage Brokerage Negotiations on phone or Messenger Negotiations on phone or Messenger Recap via or Fax Recap via or Fax Asbatankvoy is widely used standard Charter party with additional clauses Asbatankvoy is widely used standard Charter party with additional clauses

107 FACTORS INFLUENCING FREIGHT MARKETS Political events Political events Oil demand Oil demand New building activity New building activity Tanker scrapping Tanker scrapping External pressures External pressures

108 STATUTORY REQUIREMENTS

109 In 1948 under the auspices of United Nations, an international conference in Geneva adopted a convention formally establishing International Maritime Organization, or IMO. In 1948 under the auspices of United Nations, an international conference in Geneva adopted a convention formally establishing International Maritime Organization, or IMO. The purposes of the Organization is to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships. The purposes of the Organization is to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships.

110 Statutory requirements laid down by IMO can be broadly classified into the following : Statutory requirements laid down by IMO can be broadly classified into the following : 1. Maritime safety 2. Marine pollution 3. Liability and compensation 4. Others

111 Statutory Requirements – Maritime Safety SOLAS (Safety Of Life At Sea) SOLAS (Safety Of Life At Sea) LOADLINE LOADLINE COLREG (Regulation for Preventing Collision at Sea) COLREG (Regulation for Preventing Collision at Sea) INMARSAT (International Maritime Satellite Organization) INMARSAT (International Maritime Satellite Organization) STCW (Standards of Training, Certification and Watchkeeping for Seafarers) STCW (Standards of Training, Certification and Watchkeeping for Seafarers) SAR (Search And Rescue) SAR (Search And Rescue)

112 Statutory Requirements – Marine Pollution MARPOL (Prevention of Pollution from Ships) MARPOL (Prevention of Pollution from Ships) OPRC (Oil pollution Preparedness, Response and Co-operation) OPRC (Oil pollution Preparedness, Response and Co-operation) AFS (Anti-fouling Systems on ships) AFS (Anti-fouling Systems on ships) Control and management of ships ballast water sediments Control and management of ships ballast water sediments

113 Statutory Requirements – Liability and Compensation CLC (Civil Liability for Oil Pollution Damage) CLC (Civil Liability for Oil Pollution Damage) FUND (International Fund for Compensation for Oil Pollution Damage) FUND (International Fund for Compensation for Oil Pollution Damage) HNS (Hazardous and Noxious Substances) HNS (Hazardous and Noxious Substances) Bunker Oil Pollution Damage Bunker Oil Pollution Damage

114 Statutory Requirements – Other Subjects FAL (Facilitation of International Maritime Traffic) FAL (Facilitation of International Maritime Traffic) TONNAGE (Tonnage Measurement of Ships) TONNAGE (Tonnage Measurement of Ships) SUA (Suppression of Unlawful Acts) SUA (Suppression of Unlawful Acts) SALVAGE SALVAGE

115 SOLAS Safety Of Life At Sea

116 SOLAS - Safety of Life a Sea Convention SOLAS - Safety of Life a Sea Convention MSC - Maritime Safety Committee, a major committee within the International Maritime Organization. MSC - Maritime Safety Committee, a major committee within the International Maritime Organization.

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118

119 The SOLAS Convention is generally regarded as the most important of all international treaties concerning the safety of merchant ships. The SOLAS Convention is generally regarded as the most important of all international treaties concerning the safety of merchant ships. The first version was adopted in 1914, in response to the Titanic disaster. The first version was adopted in 1914, in response to the Titanic disaster.

120 The main objective of the SOLAS Convention is to specify minimum standards for the construction, equipment and operation of ships, compatible with their safety. The main objective of the SOLAS Convention is to specify minimum standards for the construction, equipment and operation of ships, compatible with their safety. A number of certificates are prescribed in the Convention as proof that this has been done. A number of certificates are prescribed in the Convention as proof that this has been done.

121 Control provisions also allow Contracting Governments to inspect ships of other Contracting States if there are clear grounds for believing that the ship and its equipment do not substantially comply with the requirements of the Convention - this procedure is known as Port State Control. Control provisions also allow Contracting Governments to inspect ships of other Contracting States if there are clear grounds for believing that the ship and its equipment do not substantially comply with the requirements of the Convention - this procedure is known as Port State Control.

122 A few areas covered under SOLAS are: Construction Construction Fire protection Fire protection Life saving appliances Life saving appliances Radio communication Radio communication Safety of navigation Safety of navigation Carriage of cargoes Carriage of cargoes Management of safe operation of ships Management of safe operation of ships Enhance maritime safety and security Enhance maritime safety and security

123 LOADLINE

124 LOAD LINE - The line on a vessel indicating the maximum depth to which that vessel can sink when loaded with cargo. Also known as marks. LOAD LINE - The line on a vessel indicating the maximum depth to which that vessel can sink when loaded with cargo. Also known as marks. INTERNATIONAL LOAD LINE CERTIFICATE - A certificate which gives details of a ship's freeboards and states that the ship has been surveyed and the appropriate load lines marked on her sides. A classification society or the Coast Guard issues this certificate. INTERNATIONAL LOAD LINE CERTIFICATE - A certificate which gives details of a ship's freeboards and states that the ship has been surveyed and the appropriate load lines marked on her sides. A classification society or the Coast Guard issues this certificate.

125 The stability of ships can be seriously affected by overloading, especially if the cargo shifts during the course of the voyage. The stability of ships can be seriously affected by overloading, especially if the cargo shifts during the course of the voyage. The practice of marking ships to indicate how low they may safely rest in the water when loaded goes back several centuries. The practice of marking ships to indicate how low they may safely rest in the water when loaded goes back several centuries.

126 The first seafarers who set to sea in wooden canoes thousands of years ago must have already - perhaps by trial and error - worked out the optimum freeboard for their vessels. The first seafarers who set to sea in wooden canoes thousands of years ago must have already - perhaps by trial and error - worked out the optimum freeboard for their vessels. They discovered that overloading the vessel could have severe consequences. They discovered that overloading the vessel could have severe consequences.

127 It has long been recognized that limitations on the draught to which a ship may be loaded make a significant contribution to her safety. It has long been recognized that limitations on the draught to which a ship may be loaded make a significant contribution to her safety. The first official loading regulations are thought to date back to maritime legislation originating with the island kingdom of Crete in 2,500 BC when vessels were required to pass loading and maintenance inspections. The first official loading regulations are thought to date back to maritime legislation originating with the island kingdom of Crete in 2,500 BC when vessels were required to pass loading and maintenance inspections.

128 The 1930 Load Line Convention was the first international agreement for universal application of load line regulations and applied to seagoing ships in international trade. The 1930 Load Line Convention was the first international agreement for universal application of load line regulations and applied to seagoing ships in international trade.

129 The minimum freeboard was designed to provide a standard of "reserve buoyancy" (the volume of the watertight hull above the load waterline), while the protection of openings in the hull and superstructures, such as hatches, ventilators, air pipes, scuppers, overhead discharges and the access openings in the end bulkhead of superstructures were an important consideration in the assignment of freeboard. The minimum freeboard was designed to provide a standard of "reserve buoyancy" (the volume of the watertight hull above the load waterline), while the protection of openings in the hull and superstructures, such as hatches, ventilators, air pipes, scuppers, overhead discharges and the access openings in the end bulkhead of superstructures were an important consideration in the assignment of freeboard.

130 All assigned load lines must be marked amidships on each side of the ship, together with the deck line. All assigned load lines must be marked amidships on each side of the ship, together with the deck line.

131 TORREY CANYON DISASTER

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133 While it was recognized that accidental pollution is spectacular, operational pollution is still the bigger threat. While it was recognized that accidental pollution is spectacular, operational pollution is still the bigger threat.

134 TASMAN SPIRIT

135 ONGC URAN P P M J D M BPCR S/WAD HPFR ONGC TROMB. ONGC JDM J.DWEEP PIPELINE SKETCH N P PO P P BPCMJDBPT J 1 J 2 J 3J 4 36 ” 30 ” 42 ” 30 ”


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