A group of major charterers have slammed Bimco’s new Carbon Intensity Indicator (CII) time-charter clause as “imbalanced and unworkable”.
The shipping heavyweights have warned that no CII clauses could end up being adopted to the detriment of shipowners.
The charterers from the bulker, tanker and container sectors are therefore looking to develop ‘alternative clauses’ to redress a perceived contractual imbalance.
The concerns are highlighted in an open letter sent this week by more than 20 leading charterers to Bimco president Sabrina Chao.
In November, Bimco unveiled a new model CII time-charter clause to cope with emissions legislation set to come into force on 1 January.
Charterers see the Bimco clause as “places the obligation to comply with CII disproportionately on charterers”.
The companies claim that talks over several months had sought “to secure the adoption of a clause which would strike the right balance and enhance collaboration between owners and charterers to lower greenhouse gas emissions”.
But key provisions proposed by charterers on vessel performance and maintenance were not included in the final text.
“This makes the Bimco clause imbalanced and unusable for the members of this group and will likely lead to a wide variety of homegrown CII clauses or – to owners’ detriment – no clause being agreed.”
Signatories to the open letter include four of the top five liner players Mediterranean Shipping Co (MSC) AP Moller-Maersk, CMA CGM and Hapag-Lloyd.
Dry cargo specialist Oldendorff Carriers, Norden, grain houses ADM and Bunge and trading houses and tanker operators Clearlake Shipping, Trafigura, Mercuria Shipping also figure.
The charterers’ lobby argues that operational measures to reduce emissions require close collaboration between owners and charterers.
“Shifting CII requirements disproportionately to charterers is detrimental to achieving a good outcome for each individual vessel with the International Maritime Organization regulation,” the letter reads.
Falling short of ‘expectations’
The lobby argues that owners are “equally responsible for maintaining the vessel’s operating efficiency, technical operations, navigation, insurance, crew, and all other related matters”.
“In circumstances where charterers’ employment orders are only partly responsible for the CII rating, this group does not accept taking wholesale responsibility for compliance with the regulations.
“Unfortunately, the Bimco CII clause falls short of expectations.
“Consequently, the signatories of this statement wish to continue to collaborate to develop alternative CII clauses that fairly share the responsibility for the journey towards decarbonization between owners and charterers.”
Other operators and owners signing the letter including Amaggi, Unifeeder, Cofco International, Engelhart CTP, Louis Dreyfus Company, Pangaea Logistics, Nordic Bulk, Americas Bulk, Phoenix Bulk, Stena Bulk, Vitol, and Wallenius Wilhelmsen.
Regulatory complexity
In response to the charterers letter, Bimco said it would continue to seek feedback on CII clause and explain regulatory complexities.
“We have received constructive comments, both positive and negative, from many of our members,” said David Loosley, Bimco’s Secretary General and CEO.
“This insight is invaluable for already published clauses and the development of future clauses.”
“We will continue to seek solutions to help our members operate commercially in a complex regulatory environment,” he said.
