Tanker Chartering: Vessel Selection for CPP, DPP and Liquid Chemical Cargoes

In dry cargo, a ship that can lift the tonnage can usually carry the commodity. In tankers that is not true. A vessel with the right size, the right position and an attractive rate can be entirely unsuitable for the parcel because of what her tanks are lined with, what she carried three cargoes ago, or how many separate systems she can keep apart.

Vessel selection therefore starts from the cargo and works outwards. This article follows that order: what the cargo classes mean, what each one demands of the ship, and where a promising candidate is usually eliminated.

Three families of cargo

Clean petroleum products — gasoline, naphtha, jet fuel and kerosene, gasoil and diesel. Light, low in colour, and sensitive to contamination: the commercial risk is that the cargo arrives off specification because of a residue, and the value of that risk is far above the freight.

Dirty petroleum products — fuel oils, vacuum gasoil, bitumen, lubricants, carbon black feedstock. The sensitivity is reversed. Contamination matters less; temperature matters a great deal, because many of these cargoes will not pump at all if they are allowed to cool.

Liquid chemicals — methanol, solvents, glycols, vegetable and animal oils, acids, and a long list besides. Here the cargo dictates the tank material, the cleaning standard, the previous cargo history and often the class of ship, and the parcel is frequently small enough that several cargoes share the vessel.

Coating decides more than size does

The lining of the tank is usually the first thing checked and the most common reason a vessel is dropped.

• Epoxy — the broadest coating in the chemical and clean product fleet. It handles most petroleum products, vegetable oils and many chemicals, but it absorbs certain cargoes, which affects what may be loaded next and how long cleaning takes;
• Zinc silicate — well suited to methanol and many solvents, and poorly suited to acids and to cargoes outside a fairly narrow range of acidity;
• Stainless steel — acids, high-purity chemicals and cargoes that would attack a coating. The most capable and the least available, and priced accordingly;
• Specialised phenolic-epoxy systems — chosen for aggressive cargoes where a standard epoxy would fail, on a limited number of ships.

A coating resistance list is not a formality. It is the document that determines whether the enquiry can be worked at all, and it is worth having in hand before the market is approached rather than after a vessel has been proposed.

IMO ship type

Chemical tankers are built to the IBC Code and certified as Type 1, Type 2 or Type 3 according to the degree of protection the hull gives the cargo tanks. The Code allocates each listed chemical to a ship type, and a cargo requiring a Type 2 vessel cannot be offered to a Type 3 ship whatever the commercial merits.

The certificate of fitness carried by the vessel lists the cargoes she is permitted to carry. Where a cargo does not appear on it, the answer is settled before the negotiation begins.

Previous cargoes

Standard practice is to ask for the last three cargoes carried in the nominated tanks, and for many parcels the receiver or their inspector sets out which substances are unacceptable in that history. The reasons are practical: traces of a previous cargo can put a sensitive parcel off specification, and some combinations are excluded outright.

For high-purity cargoes the tanks are checked before loading by wall wash — samples taken from the tank walls and tested for hydrocarbons, chlorides, colour and permanganate time. A failed wall wash means recleaning at the berth, which costs days at the most expensive point in the voyage. This is why previous-cargo information is requested at the enquiry stage and not treated as a detail for later.

Segregation, pumps and heating

Segregation. Where more than one grade moves on the same vessel, each needs its own pump, its own line and its own valve arrangement. The number of fully segregated systems a ship has is a hard limit on how many parcels she can carry, and it is a different number from the number of tanks.

Pumping. Discharge rate is a commercial term, not just a technical one: terminals allow a limited time alongside, and a vessel that cannot meet the required rate will spend the difference on demurrage. Deepwell pumps, common on chemical tankers, also allow tanks to be stripped more completely, which matters when the cargo is valuable and the outturn figure is disputed.

Heating. Fuel oils, bitumen, some vegetable oils and several chemicals need to be kept within a temperature range throughout the voyage. The enquiry should state the loading temperature, the temperature to be maintained and the temperature required on discharge — three figures, not one. A vessel with coils in only part of her tanks will suit some parcels and not others.

The terminal is part of the selection

A tanker is accepted or refused by the berth as much as by the charterer. Before a vessel is proposed, the limits at both ends are worth confirming:

• maximum length overall, beam, draft and displacement;
• manifold height, spacing and size, and the reducers required;
• hose or loading arm compatibility;
• maximum and minimum loading and discharge rates the berth will accept;
• temperature limits on receipt;
• the terminal's own acceptance criteria, including vessel age and inspection status.

Age limits deserve a separate mention. A number of terminals and receivers decline vessels above a stated age regardless of condition, and that single line removes candidates faster than any technical requirement.

Vetting

Commercial agreement is not the last step. Most oil majors, traders and terminals require the nominated vessel to pass their own screening, based on inspection reports under the industry schemes, the operator's record and the ship's certificates. Approval takes time, it can be refused, and a fixture made subject to it is not a fixture until it is granted.

Where a cargo moves under a buyer or seller with a formal approval process, the sensible order is to identify acceptable tonnage first and negotiate second.

Where candidates fall away

In practice a tanker enquiry loses vessels in a predictable order: coating, then certificate of fitness, then previous cargoes, then segregation, then heating, then terminal limits, then vetting, and only then price. An enquiry that carries the answers to the first six arrives at a short, real list within a day. One that carries only cargo and quantity produces a long list that shrinks to nothing over a week.

Kiev Shipping Ltd handles tanker chartering enquiries for selected clean and dirty petroleum products and liquid chemical cargoes, working from the cargo specification outwards to the tonnage that can actually perform. What to include when requesting freight is set out in Tanker Chartering: What Information Is Needed Before Requesting Freight.

Service overview: Tanker Chartering and Brokerage.

See also: How to submit a chartering enquiry · more in Tanker Chartering.