Double Banking and STS Transfers on Bulk Carriers

In this article we consider both the legal and practical aspects of ‘double banking’ operations on bulk carriers.  From a legal and operational perspective double banking can be considered as a modified form of ship to ship (STS) transfer due to some of the risks involved, such as damage to the vessel. There is a lot of guidance to assist with STS operations for liquid cargoes. However, there are no specific international guidelines for bulk carrier STS operations in port.

There are various types of double banking operations.  A vessel may be ordered by a port authority to double bank where there is congestion in a port. This is double banking in the more traditional sense; although two vessels are banked together, the cargo from both vessels is discharged ashore. Another example is where a vessel is ordered by her charterers to double bank and discharge into a barge. There may also be instances where two vessels double bank at a berth for the purpose of a ship to ship transfer.

Before carrying out a double banking operation in port, both the legal and practical aspects should be considered. For the purpose of this article, reference to “double banking” includes double banking with an STS operation in port.

Double Banking Operations –  The Legal Aspects

It is very important that you review the content of the charter party in anticipation of and prior to conducting double banking operations.  Double banking may fall under a “Ship to Ship Transfers” clause in a charter party if the double banking operation involves a transfer between vessels.

The BIMCO Ship to Ship Transfer Clause for Time Charter Parties is one such clause. This clause can be used for both liquid and dry cargo vessels, and allows ship to ship operations for cargo transfer purposes only (operations such as bunkering are excluded). However, this clause does not operate where there is double banking but no ship to ship transfer, for example, where a port authority orders a vessel to double bank due to congestion.

If double banking operations are not covered in a charter party it may not be clear who has responsibility when things go wrong. For this reason a clause should be included in the charter party to deal with double banking. These clauses normally make the charterer responsible for any damage to the vessel caused through hull contact, or during cargo operations. Further, an owner may wish to make it expressly clear in the clause that charterers remain liable even if such an operation is ordered by the port authorities.

Master’s Role

Even if there is nothing in the charter party about double banking then the Master may still be obliged to carry out the operation, unless the operation is considered unsafe by the Master.

Double banking clauses will usually provide that the operations are subject to the Master’s approval. But this does not mean the Master has an absolute right refuse to do these operations.

When can the Master Refuse to Double Bank?

The 2014 case of The Falkonera, considered a proposed STS operation between two VLCC’s.  The charterers had a right to ask for STS transfers, subject to the Master’s approval. The charter party also stated that approval from the Master could not be “unreasonably withheld”. In addition, there was an overlapping clause stating such transfers should be carried out in accordance with the recommendations set out in the ICS/OCIMF Ship to Ship Transfer Guide. The Master refused to agree to the operation because of a previous bad experience and because the ICS/OCIMF Ship to Ship Transfer Guide did not have specific guidelines for VLCC to VLCC transfers.

The Court decided that the Master’s refusal was unreasonable, that the charterer’s had the right to conduct an STS transfer with any vessel, including a VLCC, and the Owners had not specified any reasonable basis for rejecting the transfer on account of any characteristic of either vessel. The fact that such a transfer did not feature in the ICS/OCIMF guideline did not mean such transfers were precluded.

As such, if a double banking operation includes a ship to ship transfer element and the charter party contains a clause requiring the Master’s approval, it is unreasonable to withhold approval unless there is a characteristic of the operation making it unsafe. Given that there will be similar practical and safety issues to consider where a vessel is to be double banked even without an STS transfer, if a charter party requires the Master’s approval for double banking a court is likely to take a similar view. Therefore, unless the clause states that the Master’s right to refuse is unfettered, there would need to be a characteristic of the double banking operation making it unsafe in order for the Master to validly withhold his approval.  

STS Service Providers and Letters of Indemnity

As discussed above, a double banking operation may include a ship to ship transfer element. As the charter party clause should place responsibility for the STS operation on the charterer it is usually the charterer that will contract with any STS Service providers for the operation, although this may not be the case for double banking in port.  Where a STS Service provider is involved they often ask the Master for a letter of indemnity to be signed. This letter may state that the vessel’s owners take all liabilities arising from the STS operation.  If the Master signs this letter it could mean that the vessel owner takes unlimited liability for the actions of the STS Service provider. This might then affect the vessel owner’s P&I cover.

North recommends that Masters do not sign these letters. If the Master is under pressure to sign such a letter of indemnity, he should first make sure he has received charterer’s instructions and authority to sign on their behalf. The Master may also seek advice from North by contacting their usual contacts within the FD&D department. If the Master has no time to get instructions from the charterers he should sign the letter “for receipt only”, and then straightaway tell the charterers that this has been done in line with their instructions for the double banking and STS operation.

Image: A bulk carrier STS transfer.

Operations and the Bill of Lading

While some bills of lading for liquid cargoes (such as the BP Tank Ship Bill of Lading, or the BISCOILVOYBILL) include a Liberty Clause to cover a change of vessel via STS transfer, most dry bulk bills of lading do not. If instructed to carry out an STS transfer at an intermediate port by charterers, thought needs to be given to the bill of lading position (- there is likely to be a deviation under the bill of lading as the cargo is not being discharged at the intended discharge port and the bill of lading may not be being surrendered) and whether the owners can insist on being provided with an LOI by the charterers. Owners’ position will depend on the charter party terms and the operation being proposed and Members are encouraged to seek guidance from the Club.

Double Banking – the Practical Aspects

As well as considering the above charter party and letter of indemnity issues before conducting any STS / double banking operation, consideration should be given to the practical aspects of the operation.

This should include:

A Risk Assessment:
A full and comprehensive risk assessment of the entire operation should be completed.  Control measures should be discussed and agreed by all parties involved.

Double Banking Method Statement:
A fully documented method statement should be prepared. This should include all stages of the operation from the approach, mooring, equipment required, personnel roles, cargo operations to finally safely departing the location. The dimensions, draft and condition of the vessels involved should be known to ensure that the plan takes into account any differences in length and size between the vessels.

Other things that should be considered:

Local Regulations: These should be checked and specifically included in this document to make sure that you do not breach any regulations. Your local agent should be able to inform you of any requirements and obtain suitable permission for you to perform the operation.

Moorings: An important consideration. Time should be given to considering the mooring arrangement between the two vessels. Also, the moorings between the inboard vessel and the berth should be reviewed; these may need to be increased due to the additional forces of another vessel on the outboard side. The fact that there are increased forces on all moorings for double banked vessels that are affected by weather and tidal forces should also be considered. As well as the ships mooring lines and bitts, the SWL of the quayside bitts should be known and confirmed as suitable.

Fendering: This should feature in the method statement. Suitable fenders should be placed between the vessels. Some ports will provide the vessels with fenders. The fender type and size should be considered to ensure maximum protection for the vessels.

Safe Access: Safe access should be established between the vessels and also between the inboard vessel and the quay. It is important that this is safe for crew and be appropriate. It should not be a makeshift arrangement.

Equipment Check:
The equipment outlined in the method statement and in the risk assessment needs to be checked to confirm it is in good condition, fully certified and appropriate for the operation.

Contingency Planning:
What could go wrong? Issues that could arise during the operation should be considered. You should then draw up detailed contingency plans that contain the actions required by the vessels and the crew involved.

There may be already some contingency plans included in the vessels SMS; they should be referenced to assist with planning.

Personnel:
When deciding on the crew’s job roles, you should consider whether they have the relevant training and practical experience needed to make the job smooth and safe.

Cargo Documentation:
The cargo documentation for any cargoes to be transferred should be correct to ensure there are no issues during, or after the transfer operation. The parties involved should know the correct cargo name, cargo quantities and also know the associated requirements and hazards of transferring and carrying the cargo involved. Local authority regulations may impact the ability to conduct the operation depending on the cargo type.

Tool Box Talk:
After the method statement and the steps set out above have been completed, all parties involved should meet to discuss and agree any changes or improvements. Immediately prior to the operation, the crew should have a tool box talk to run through their responsibilities and to give them the chance to ask any questions.

The Master should always check the requirements for double banking or STS transfers in the company Safety Management System.

Record Keeping:
It is important that the ship’s crew keep accurate records of the entire operation. These records should include:

• A signature sheet showing that the crew involved have reviewed the Method Statement.
• SMS operational checklists, completed as required, for example:

1.    Pre arrival / berthing checklist.
2.    Pre cargo ops checklists
3.    Pre Departure Checklists

• Certification and maintenance records for any equipment to be used.
• Record of tool box talks and briefings.
• Accurate logbook entries for the entire operation.
• Accurate tidal and weather records for the operation.
• Any communication related to the operation with outside parties such as the charterer.
• Any letters or checklists from STS service providers.
• Any notes of protest issued by the Master.
• Accurate cargo figures.
• Accurate Stability Information for arrival and completion.

Whilst double banking operations carry some risk, they can be conducted safely and smoothly without incident if Members and their crews put in place suitable control measures with regard to the charter party and vessel operations.