Bunker Math Battles: Why Extrapolation and Warranty Misuse Can Sink Your Voyage Claims!

 ⚓ "Bunker Math Battles: Why Extrapolation and Warranty Misuse Can Sink Your Voyage Claims!"

❓ Three Yes/No Questions to Spark Curiosity

1. Are you extrapolating bunker consumption across an entire voyage without clear CP terms?
2. Are you misinterpreting the +/- 5% bunker warranty margin?
3. Could you be submitting flawed bunker performance claims unknowingly?

 

📜 Detailed Clause Breakdown

Key Clarifications from the Charter Party (CP):

1. Extrapolation should not be applied throughout the voyage, as the same has not been agreed upon in the CP.
2. The application of warranties for evaluating bunker consumption is incorrect. As per the CP, a margin of up to 5% more is agreed, and not a range of –5% to +5%.

🔍 What This Means:

1. No Blanket Extrapolation Unless CP Allows
Extrapolating performance data (like fuel consumption) across the entire voyage without explicit agreement in the CP is not valid. CP terms must be honored strictly—meaning owners or charterers cannot just apply a uniform rate or figure over the full passage unless agreed.

Example:
If the vessel burns 25 MT/day over 2 days of bad weather, charterers cannot extrapolate this over 10 days to claim overconsumption unless the CP permits such analysis.

2. Warranty Misinterpretation – +5% ≠ ±5%
Warranties like “bunkers to be consumed at 25 MT/day with a 5% margin” means consumption can go up to 5% more (i.e., 26.25 MT/day) without breaching the warranty.
Not a ±5% range (23.75 – 26.25 MT/day).

Common Mistake:
Charterers incorrectly argue for underperformance even if consumption is within the allowed upper 5% limit.
This misinterpretation can lead to unjustified claims and disputes.

 

⚠️ Implications, Pitfalls & BIMCO/Case Law Commentary

• Implication for Operators: Applying extrapolated figures or wrongly interpreting warranties can lead to wrongful claims or rejections.
• Pitfall: Extrapolation may not consider sea/weather conditions, RPM variations, port delays, etc.
• Practical Tip: Always rely on measured segments and align with CP agreed basis (e.g., good weather days, RPM, or actual logs).

BIMCO Commentary:
BIMCO emphasizes that any performance claim must be based on “agreed performance warranties” under defined conditions (often “good weather days” as per ISO standards). Extrapolating over non-standard periods is highly contentious unless explicitly covered.

Case Law Reference:
The Gas Enterprise [1993] highlights that performance analysis must strictly follow what is agreed in the CP. Courts have rejected claims built on unilateral extrapolations.

 

✅ Actionable Steps for Operators / Managers / Owners / Charterers

1. Cross-check CP Terms Before Making Claims – Is extrapolation or performance warranty range defined?
2. Use Verified Weather Days Only – Benchmark performance analysis on logged good weather days per CP/ISO standards.
3. Clarify Warranty Language Early – Define whether it's ±5% or only +5% during negotiations.
4. Avoid Using Implied Ranges – Use actual logs and calculations; document all voyage segments.
5. Educate Your Chartering and Ops Teams – Misunderstanding warranties leads to time-wasting claims and strained relationships.

 

📣 Conclusion & Call-to-Action

Misapplied extrapolation and misinterpreted bunker warranties can trigger costly disputes. Stick to what’s in the CP—no more, no less.

If you've faced bunker claim headaches or want to sharpen your ops team’s CP performance knowledge, drop your experiences in the comments!

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⚠️ Disclaimer:

This blog is intended for general informational purposes only. It does not constitute legal advice. Shipping professionals should refer to their specific charter party terms and consult legal counsel when needed.