Just in Time Arrivals

3.2.1. Contracts

For ships on time charter the owner–charterer relationship is not a problem, as the charterer has the right to direct the ship to proceed at any speed. The charterer pays all the bunkers so directly profits from fuels savings.

Therefore, contractual barriers primarily apply to those ships that operate under voyage charter (i.e. most bulkers and tankers) during the laden voyage. This is because voyage charter parties include a Due Despatch clause which obliges the ship’s master contractually to proceed to the next port with utmost despatch, regardless of whether a berth is available or not.

An additional complication is added when a ship carries several different cargoes. For example, a parcel tanker may carry 20 or more different cargo parcels. Per parcel, multiple parties are involved in the commercial agreements e.g. seller, buyer, broker, charterer and shipowner, and the shipowner may have different obligations to different cargo owners.

Furthermore, cargoes may be traded many times between the load and discharge port. This means that each party in that sales chain must redraft the owner–charterer cargo contract after each trade agreement. Currently, there is no widely used industry standard clause for JIT Arrival that is included by default in the charter party (and widely accepted by all parties). On the contrary, several different clauses exist, e.g. BIMCO has published a Virtual Arrival Clause for Voyage Charter Parties and also shipping companies have developed their own clauses for JIT Arrival implementation that differ from the BIMCO clauses (e.g. SHELLVOY6 and BPVOY4). But since there is limited application of JIT and parties do not understand the liabilities JIT Arrival could potentially impose, every sales contract could take days to agree. By that time, the ship would have arrived at the discharge port, with no application of JIT Arrival.

Finally, even if contractually an agreement is sought for all cargoes and among all parties involved, how to calculate and share any costs/revenues from the implementation of JIT Arrival may be complex. For example, in a voyage charter delays due to the weather are paid by the shipowner whereas delays in the loading and discharging of cargo are paid by the charterer.

Potential solutions

Since the contractual barriers mainly relate to those ships that operate under voyage charter, potential solutions
mainly aim to improve existing voyage charter party agreements:
– Include a JIT Arrival standard clause in the voyage charter party to allow the ship’s Master to
optimize speed, without being in breach of contract
– Adapt charter party to allow the vessel to arrive at the Requested Time of Arrival at the Pilot
Boarding Place (RTA PBP) whilst tendering her NOR at the time that she would have arrived had
she proceeded on voyage at charter speed using due despatch (virtual arrival) and physically
arrived at the PBP
– Include a JIT Arrival standard clause in the charter party contract that can be passed through the
sales chain like any other clause. Standard clauses, since they automatically come into effect,
are normally not challenged by any party. Applying a standard clause does not mean that by
definition costs/benefits are fairly distributed, but the distribution is accepted, and no time is
lost in renegotiating terms
– For the calculation and sharing of the financial benefits of slowing down the ship, some charter
parties prescribe that the Virtual Arrival time (i.e. time the ship would have tendered its NOR
based on RTA PBP) must be determined by an independent third party which party should be
agreed upfront by both the ship owner and charterer
– Fuel savings could also include a split with terminal (in addition to the shipowner and charterer)
such that all three parties receive an equal share of the fuel saved through JIT Arrival. This requires
a check and adjustment of the entire contractual chain

3.2.2. Operations and Procedures

 

Gaps in procedures

A major step that has to be taken before Just in Time can be implemented, is beside the data related gaps to identify the gaps in procedures in ports. Examples of gaps in procedures are:

-There is no preclearance by customs

-Not enough capacity or not aligned capacity of a (nautical) service provider

-Delays by terminals that are not ready with cargo operations at the vessel order time

-Extreme peaks and troughs in capacity demand

 

3.2.3. Data and Standards

Data

Data exchange and therefore data sets and data standards are of great importance in the implementation of Just in Time arrivals.

This page considers how the exchange of the key information and data that is required for JIT Arrivals can be improved in a port.

As Just in Time Arrival relies on data of shipping lines, terminals and ports, digital exchange of data in an uniform way is of huge operational importance. In line with resolution MEPC.323(74), IMO invites Member States to encourage cooperation between the shipping and port sectors to contribute to reducing GHG emissions.

Data Sets

Non-technical vs. technical standards: Where non-technical standards are the definitions of the data elements, technical standards provide the way how these data elements can be exchanged. For example the API specifications.

Important data events for JIT

The most important timestamps for Just in Time arrivals are obviously related to the arrival of the vessel. As many vessels are on berth exchange, also the timestamps related to the outbound vessel are important. For a definition of the relevant timestamps, see endorsed standards.

Data mapping

To define the Just in Time arrival process in a port, it is important to map if all important timestamps are available and if these timestamps are according to the standards. Mapping where (or in which system(s)) the timestamps are available is also important. The last check should be to understand which systems are connected and are exchanging which relevant timestamps already.

The importance of standards

As discussed before, standards and the usage of standards is key in the successful exchange of data and thus in Just in Time arrivals.

 

For nautical, administrative and operational data sets and corresponding standards a implementation guide is available or under development. These can be of help while implementing Just in Time arrivals.

 

Gaps in data definitions

As discussed before, it is key to the process to speak the same language in a port and also between ports as shipping is a worldwide trade. So mapping the gaps between the current definitions used in port and the standards is important.

Gaps in availability of data

It could also be the case that some data is not available in a port, or that a timestamp is not used at the moment. To be fully aligned with the Just in Time concept, all timestamps should be in place.

Gaps in data exchange

As timestamps are available, it is important that these timestamps can be exchanged system to system between the relevant parties. If not all timestamps are shared between the relevant parties, these gaps should be identified.

3.2.4. Stakeholders/Actors

The stakeholders

All parties involved in the arrival and departure* time of a vessel are important to make Just in Time work. The biggest players are:

• port authorities
• terminals
• shipping companies
• (nautical) service providers

Stakeholder mapping to the local situation

Key stakeholders in port in relation to Just in Time should be mapped. Basically, the Just in Time concept and the business process of port call optimization with “general” stakeholders should be translated to the local situation.

Data owners

An important group to involve are the parties that are data owner of timestamps that are relevant to the Just in Time process. For example, think of a terminal who defines the RTA Berth of a vessel.

Other stakeholders

Besides data owners also other parties that play a role in the Just in Time process or are key in the (decision making) processes in port should be involved. For example, if the Port Community System will be used for the data exchange, involve them.