Demurrage On Line is owned and operated by Demurrage Specialists International. Its purpose is to serve as a "soapbox" on issues that are being talked about to death but no action being taken. The issues apply not only to demurrage but to contract clauses, nominations, ETA's, contractual windows, arbitration decisions - the list goes on and on. Send us your feedback keeping it professional and not personal. We are on the soapbox with "Public Dock" Clauses.
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THE INFAMOUS PUBLIC DOCK CLAUSE
More and more companies are using a clause referred to as a "Public Dock Clause" as a way to cut their demurrage exposure thereby passing the liability incurred by the seller due to awaiting a berth to the buyer.
According to the American Association of Port Authorities a "public dock" is one that is owned and operated by the Port Authority. The legal interpretation of public is "of, relating to, or affecting ALL the people or the whole area of a nation or state".
KMI's terminals are owned and operated by Kinder Morgan Energy Parnters.
GATX is owned and operated by the GATX Corporation.
IMTT is owned and operated by International-Mates Tank Terminals.
These terminals are privately held facilities which perform and provide a service to their lease holders in the industry. It is not a facility accessible to or shared by all people. I know that I cannot bring my yatch up to the dock and say "fill'er up" even if I was first.
The fact that IMTT, GATX and KMI store product for their lease holders does not make them a public dock. There are many other companies that provide storage for other companies. It does not make their facilities "public".
The terms "first come/first served" applies specfically to a scheduling procedure required by the terminal. The scheduling procedure is specified in the lease holder's Terminalling Agreement. If the terminal's procedures are not followed accordingly, the barge is not placed on the schedule. In addition, there have been times a barge may have arrived prior to another and is on the schedule but get bumped by the terminal for a variety of reasons.
There is a delivery window in the contract which, under the Public Dock clause becomes moot. There was a time, not too long agao, when a barge arrived within the contractual window and tendered its NOR. If she had to await a berth, laytime started when arrived plus any applicable free time. Somewhere along the way someone came up with the idea of putting in a "public dock" clause.
We understand both side of the transaction and how the cookie crumbles. However, it would seem that a more equitable and commercial solution to this escape clause could be negoitated. Why should the buyer be solely liable for a delay getting into berth simply because the seller is a lease holder in a privately held facility?
One thought is in the event of a delay getting into a berth is that additional free time be given to the waiting time. This would be over and above the allowed laytime given by the barge company. For example, allowed free time awaiting a berth could be five hours or whatever is negotiated. After the free time expires, laytime commences to run and the allowed laytime under the barge company's terms would apply.
We addressed our "soapbox" comments only to barges as this seems to be the greatest area of conflict.
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Tel: 561-988-2656 - 561-999-0213
www.demurrage.com
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