Effects of off-spec bunkers

Introduction
Taking on board off-spec bunkers can cause significant disruption to a vessel's ability to trade. In addition, it creates problems in recovering from insurers costs incurred due to lack of and/or limitation in cover. This article is intended to provide an example of the problem as experienced by shipowners. The case described below relates to a passenger ship, but applies equally to all types of vessels. The article outlines problems that may arise when passenger ships have to deal with off-spec bunkers.

Passenger ship operations are very sensitive to disruptions.

Passenger ship operations are very sensitive to disruptions. Costs can occur in the form of hull and machinery damage, need to pay damages and compensation to passengers and crew, as well as damage to reputation that may influence future bookings and earnings.

Course of events
Following the vessel's arrival in Singapore, a bunker barge delivered bunkers to the vessel. The bunker delivery statement noted that 90 MT of supposedly IFO 180 CST had been supplied. Fuel samples were taken for testing by a credible bunker quality testing company. However, the results would not be available for another two to three days.

The vessel departed Singapore for Thailand on that same day. That evening, the vessel experienced a total blackout, including the loss of all navigational equipment. Power was temporarily restored two minutes later. A second blackout occurred the following minute, resulting in the vessel being out of control. Although power was finally restored within two minutes, the vessel was only able to continue at half speed.

The chief engineer observed that the bunkers supplied in Singapore that day had a high degree of carbon residue, clogging the complete fuel system in the main and auxiliary engines. The master informed the owners of the problem and the decision was made to return to Singapore due to safety considerations.

The following day, fuel samples were taken in the settling and service tanks where the bunkers had been loaded and the vessel began discharging the off-spec bunkers. Soon after the discharge started, a representative from the Singapore Maritime Port Authority informed the vessel that they were being cautioned due to the emission of black smoke - apparently the result of the burning of the off-spec bunkers. An engine repair contractor boarded the vessel the same day and upon surveying the situation, indicated that repairs would take at least two days provided no extensive damage was found. After consultation with the owners, the master decided to abort the cruise.

The de-bunkering operation was completed the following morning, at around the same time when all passengers were discharged from the vessel. Another bunker barge provided a fresh supply of IFO 180 CST. A second agency was used for the sampling of the new bunkers taken and a different bunker testing company was used to analyse the samples. The results of the tests of the first and second bunkers indicated high ash, water and total sediment potential (TSP) content. In addition, high sodium to water content was also reported, indicating the presence of seawater in the bunkers. However, the bunker brokers advised the company that the samples had not been taken at the bunker barge as required by the Singapore Standard CP60:1996. Further samples were drawn at the barge's manifold and sealed with a barge seal.

Damage to machinery
The damage to the main engine as a result of using the off-spec bunkers was abrasive wear marks on all fuel nozzles, abrasive wear on all fuel pump barrel/plunger assemblies, as well as heavy fouling of all turbochargers. The turbocharger impellers were noted to be heavily fouled, the labyrinth seals on the gas sides were choked with carbon deposits, and the bearing bushes were worn. In addition, the boiler burner unit was also heavily fouled. Upon review of the engine logbooks, there was no evidence of any problems with the engines prior to taking on the off-spec bunkers. The running hours of the main and auxiliary engines were noted to be well within acceptable limits for overhauls.

In this case, there was no indication that the vessel had received the results from the first fuel test prior to sailing. In addition, the vessel had apparently a very limited amount of bunkers on board prior to loading the first off-spec bunkers. Therefore, the vessel had to commence using the new bunkers prior to receiving the test results. In this case the vessel was not able to create a 'buffer' by using the existing bunkers while awaiting the test results. Had this been the case, the company may have been able to discharge the off-spec bunkers and take on replacement bunkers.

What type of damage is actually covered?
In this type of case, shipowners can find themselves in a situation where insurance can only cover a portion of the costs incurred. For example, in this instance the cost of repairs to the damage to the machinery was below the hull and machinery deductible. For loss of hire, the vessel was off-hire but again the losses were below the off-hire deductible. The P&I entry covered the member's liability to pay damages or compensation to passengers on board the ship in consequence of a casualty, as per Rule 28(b) of Assuranceforeningen Gard's Statutes and Rules. However, such compensation relates only to the member's legal liability to the passengers and can not include any claim in respect of payments made to passengers to protect the member's commercial reputation or to foster customer goodwill.

The shipowners are therefore left to bear a significant cost for business disruption in these instances, where only limited insurance cover would be available under hull and machinery, loss of hire and P&I. Dependent upon the circumstances, demurrage may also be owed, creating an additional problem for the shipowner.

Lessons learned
The lessons learned from this case apply to all types of ships. However, the passenger ship industry is probably more sensitive than most industries.

Fuel testing
Bunkering procedures, including fuel-testing procedures, should be reviewed to ensure correct procedures when dealing with off-spec bunkers.¹ The crew involved should also be properly briefed on these procedures to avoid costly and time-consuming interruptions. The Det Norske Veritas Annual Report 2000 states that only 40 per cent of the world fleet performs fuel testing. This lack of testing can lead to extensive damage to the vessel's machinery, which is costly both to the owner and insurer. On the other hand, there are cases where there is a company fuel testing procedure but due to commercial or other reasons the results of the tests are neither received in time nor are actions taken to adjust the fuel equipment and engines accordingly. The improper use of off-spec fuel can cause significant damage to the vessel and its ability to trade. In the case outlined above, the costs were considerable and were only partially recoverable from insurers.

Taking on bunkers
Every precaution should be taken to ensure that adequate bunker supplies are available to allow for proper testing before use of any new bunkers taken on. It is imperative that passenger ships, as well as other vessels on tight charter schedules, are able to deal with situations where it is necessary to use bunkers without the test results being available. This may involve complex contingency planning in order to properly evaluate and ensure that a 'buffer' exists. For example, some shipowners maintain a quantity of marine diesel oil (MDO) on board for situations where off-spec bunkers need to be discharged and only limited IFO is available. Another rule of thumb is to maintain at least five days' steaming worth of bunkers in reserve.²

Bunker suppliers
Be selective when choosing fuel oil suppliers and be aware that cheap bunkers are not synonymous with quality bunkers.³