A charter party is contracted when a shipowner allows another party (commonly referred to as a charterer), to charter their vessel for the purpose of transporting cargo.
Within this agreement, the charterer would state the allotted time that is required to load and unload cargo to and from the vessel, which is known as laytime. Should the time frame for loading or unloading goods exceed the laytime, the shipowner is permitted to charge the charterer vessel demurrage fee.
The inverse is also true when the charterer completes the loading and unloading of goods earlier than the agreed laytime. The charterer is then allowed to claim a despatch fee from the shipowner.
There are various conditions and clauses that can affect laytime. In this article, we’ll take a detailed look at the Conoco Weather Clause (CWC) and how it affects laytime and demurrage charges. We’ve also made sure to include a case study towards the end of the article for better understanding.
What Is the Conoco Weather Clause (CWC)?
The Conoco Weather Clause (CWC) is defined as “Delays in berthing for loading or discharging and any delays after berthing which are due to weather conditions shall count as one-half laytime or, if on demurrage, at one-half demurrage rate.”
As such, CWC exists to ensure a shared burden between the shipowner and the charterer during unfavorable weather conditions that prevent berthing, loading, or unloading of goods.
How The Conoco Weather Clause Works
The Conoco Weather Clause is initiated by the charterer, and the ship owners are free to prove that any delays in berthing, loading, or unloading of goods are not caused by unfavorable weather conditions.
There are 2 principal guidelines to consider before a Conoco Weather Clause can be initiated:
- Laytime has already started.
- Proof, preferably documented, that the delays encountered are due to bad weather. The best evidence is to secure written confirmation from the port operator or the shipowner’s agents that vessel operations have ceased due to bad weather resulting in port closure or work stoppage due to unforeseen weather conditions.
Establishing laytime is important because it is the basis for the computation of demurrage and disputes are often long undertakings. In the next section, we will discuss how laytime commences under the Asbatankvoy Charter Party and the Shellvoy Charter Party.
How Laytime Commences with Asbatankvoy Charter Party
In clause 9 established in the Asbatankvoy Charter Party, laytime can be established based on two requirements. First, a berth must be reachable on arrival (ROA), and second, a Notice of Readiness (NOR) has already been given by the master of the vessel.
Physical or Non-Physical obstructions do not form part of laytime such as:
- Non-availability of tugboats
- Congestion experienced in port
- Bad weather
- The NOR has already been issued but a vessel does not have access to its assigned berth
How Laytime Commences with Shellvoy 5 Charter Party
Under the Shellvoy 5 charter party agreement, an ROA is no longer required. Laytime can start based on two scenarios:
- 6 hours after the vessel arrives at its assigned berth and written notice has been given that the vessel is ready to load/unload cargo.
- If the vessel does not proceed directly to its berth, laytime may start 6 hours after the vessel is in the assigned waiting area or in what is defined as the port’s waiting area, a NOR has already been issued by the Master of the vessel, and the berth is readily accessible.
A berth is deemed to be inaccessible if it is affected by bad weather, waiting for tugboats, or within the limits set by port traffic control. If a berth is accessible, but the vessel cannot dock due to weather conditions, laytime commences and CWC can be applicable.
When The Conoco Weather Clause Applies
Taking both types of charter parties into account, the Conoco Weather Clause applies when either of the following conditions is valid:
- The vessel is in berth and bad weather has disrupted loading and/or unloading operations.
- The vessel hasn’t reached its assigned berth and is unable to berth due to bad weather conditions but the laytime has already commenced.
The Conoco Weather Clause applies only up to the time when bad weather ceases. Any other reasons that contribute to delay, such as port congestion, have to be assessed differently based on the actual events and circumstances.
Case Study: Conoco Weather Clause
One infamous scenario featuring a Conoco Weather Clause can be found in the case of Moutain Blossom. This case was arbitrated in New York with the facts of the case as follows.
Under the Asbatankvoy charter party, the vessel had arrived at the loading port and was unable to dock due to berth availability. While waiting, the port authorities declared that the port will be closed due to heavy fog.
The charterer sought protection and initiated the Conoco Weather Clause for port closure beyond their control. The arbitrator ruled that since the vessel could not get into the assigned berth due to the fog, one-half of the laytime did not count as part of the total laytime.