New Bunker Contract Approved
BIMCO's Documentary Committee approved a new set of standard bunker terms, developed by a cross-industry group, in New York on May 2. The BIMCO Bunker Terms 2018 improve on the previous edition with a maximum limit of the parties' liabilities – a key change that will lead to wider adoption of the contract, says the organization.
"I think it is a positive step for the industry that representatives for the bunker traders and shipowners have agreed on a standard set of terms, which both parties consider fair and balanced," says Francis Sarre, Chair of the BIMCO Documentary Committee.
The trader representatives who helped draft the contract together account for 25 percent of the total bunker volume sold globally, which BIMCO sees as a very strong sign of support for the final result. The BIMCO Bunker Terms 2018 also have the support of IBIA – the International Bunker Industry Association.
Sarre hopes that the changes to the terms and the broad support will lead to a wide adoption of the standard terms across the industry, which will improve and speed up bunker transactions and reduce disputes. "We all need to improve efficiency and cut costs. With a widely used standard contract all parties involved should save time on drafting contracts and get greater clarity on the contractual obligations and liabilities in the contract. This will hopefully bring more transparency to the bunker industry," Sarre says.
The BIMCO Bunker Terms 2018 therefore include a default limit of the invoice value or $500,000, whichever is higher. The $500,000 is just a default minimum figure that the parties can increase if appropriate.
The BIMCO Documentary Committee consists of over 60 people from across the shipping industry, including: shipowners, ship operators, representatives from P&I clubs and national shipowner and shipbroker associations. The committee also has several observers including the International Group of P&I Clubs, the International Chamber of Shipping, INTERTANKO, FONASBA and the Maritime Law Association of the US.
The new BIMCO Bunker Terms 2018 will be available shortly on BIMCO's website.