Shipping is essentially a marriage between the commercial interests of charterers who hire ships to transport cargoes, and shipowners who operate ships for commercial gain. The relationship between owners and charterers is governed by freedom of contract – the ability to freely negotiate contractual terms based on each parties’ respective commercial bargaining power. Charterers cannot easily force onerous terms on unwilling owners, but they can clearly state what ships they will not consider hiring even before negotiations begin. It is this aspect of charterers setting pre-contractual “requirements” that BIMCO has seen in relation to the crew change crisis.

Feedback from our members indicates that in certain trades – notably dry cargo – some charterers are pushing back on ships that have had or will have a crew change within 14 days of the proposed date or delivery, or whose owners are planning a crew change during the voyage. Without condoning this practice, these restrictions seem to be mainly applied to spot charters – single voyages usually of fairly short duration where the owners will generally know in advance the intended ports of call. A COVID-19 related delay on such a short voyage may have a significant impact on the commercial and contractual obligations of the charterers.

Longer term “period” time charters lasting many months or even over a year and where the ports of call are broadly encompassed by “worldwide trading” require a more pragmatic approach by charterers. BIMCO’s COVID-19 Crew Change Clause was developed specifically for such longer-term time charters. It encourages a sensible cooperative approach between owners and charterers to find a solution to the crew change issue. That solution may include charterers agreeing that owners can direct the ship to a place where the crew change can be done, if crew changes are prevented at the intended ports of call. 

Clause prompts dialogue 

But even if agreeing to deviate the ship is not possible, the Crew Change Clause still has an important role to play in getting owners and charterers to start a dialogue about essential crew changes under difficult circumstances. Let’s not forget that the crew change crisis is a humanitarian issue caused by the travel restrictions imposed as a result of the pandemic – there is no room for political posturing by countries using COVID-19 as economic leverage.

There is no one-size fits all contractual solution that will fix the crew change crisis. The BIMCO Clause will help in some situations where the contracts are for prolonged periods of time and where ports of call are not known at the time of fixing. Even where owners and charterers can’t agree on including the clause in their contracts, the process of negotiation will start an important conversation that will hopefully lead to a solution.

We cannot emphasis enough the importance of good dialogue. Owners should clearly explain to charterers their crew change plans and procedures and being open about any possible risk of delays. Charterers should respect that owners have been put in this situation by circumstances way beyond their control. It is only by working together with charterers that owners will be able to continue to provide the sustainable transportation services on which charterers are wholly reliant.