Ice class bulk carrier

Winter navigation and how it affects the freight market

Several areas in the world which are very important to shipping may have navigation impeded or made quite impossible during the winter months due to ice. Navigation in the Hudson Bay of Canada is only possible between July and October each year. St. Lawrence Seaways which links the Atlantic Ocean with Great Lakes and allows ships to reach in the North American Continent closes the route from the middle of December to the beginning of May. Baltic Sea which is a main exporting region with high shipping activity becomes ice bound from November to March and some of the ports are closed during the coldest periods of winter, despite the efforts of the sophisticated ice breakers which are sailing in the area assisting the sea-going vessels. In general, problem with ice during the winter months appear in Northern Seas, Baltic Sea, Arctic, Azov Sea, West and East Coast Canada, Russian Far East, Bering Sea and Southern Ocean. Not only some of the ports in these areas are closed during the deep winter months but also the overall navigation during the winter should take place by specialized ice class vessels and, in most cases, with the assistance of ice breakers.

The ice class vessels

If you open the OpenSea map during the winter months, you may see available cargoes in ice areas looking for candidate ships, which are trading in these ice conditions earning a seasonal freight premium. However, not all the ships can navigate in the ice even with the assistance of ice breakers. The ships which can navigate into the ice have been built with special characteristics and if any other vessel tries to enter an ice zone will definitely face damages or even stick in the ice. The special characteristics of an ice class ship include a thicker hull with stronger structural integrity, rudder and propeller protection, sea chest protection in order for same not to be blocked from ice and in some cases heating system for the fuel and/or the ballast tanks. In any case, the ice class vessels should be built in accordance with the guidelines of the classification society and they take a relevant class notation which shows their strength against ice. The vessels with higher class notation can sail into worse ice conditions without the assistance of ice breakers while the weaker notated vessels can navigate into ice areas with the assistance of ice breakers only. Furthermore, there is ice-class notation for ships with no ice strengthening that are capable of operating independently in very light ice conditions. The ice class notations of the Classification Societies are described in the below table.

Ice classes of ships

The first category (IA Super etc) includes the ice class ships with structural strength higher than the IA category and their hull form and engine output are capable of navigating in very difficult ice conditions. The other three categories (IA, IB and IC) are ships with the strength and engine output capable to navigate in ice with the IA in more difficult conditions than IB and IC accordingly. ICE-C category includes vessels that may operate in light ice conditions only. ICE-C is now considered to be Ice Class II by the Finnish authorities and not accepted as fully ice strengthened. These vessel can sail into light ice condition only, consisting of ice flow of 10 to 20 cm thickness.

The effects of ice-campaigns on freight market

Apparently navigating in ice areas is not an easy task for shipowners. Only the ice class vessels can navigate in heavy ice conditions while not all the other ships are willing or able to fix a business which will result in sailing in even weak ice. Due to the lower supply of such vessels and the high demand in many of these areas (e.g. Baltic Sea, Canada) as well as the higher risk involved in this trade, it is very usual the vessels participating in this trade to earn a good premium on the freight. Furthermore, the ice conditions influence other aspects of the market as well. Since there are much higher delays both in sailing and port stay due to the ice conditions, the overall supply is also decreased and subsequently the effect on the market is positive. On the other hand, closure of a few ports might have an adverse effect on the market in case the trade volume is also affected, however we assume that in such cases the cargoes are still exported or imported by the nearest ports which remain open and therefore there is not a negative effect arising out of such actions.

At the same time, there are special regions like Azov Sea or Inland Rivers where small tonnage massively going out of cold areas into neighbor non-ice regions (i.e.: Black Sea/Mediterranean) creating additional/seasonal over-supply in such areas. On the other hand, there are also shipowners, especially in the Short Sea Shipping sector who lay up their vessels during the deep winter in an effort to minimize their risks or seasonal losses if the market goes down.

In any case whether you own the best ice class ship in the world or a non-ice class ship which is going to enter an ice area, you need to take certain precautions in order to avoid delays, damages and disputes with your counterparties.

Main precautions for shipping during the ice-season:

(A) Incorporate an ice clause in the charter party

Everything starts on the negotiations of charter party conditions. And the main points which should be considered are the special terms for entering into the ice, the party who will cover the additional costs as well as the places of tendering NOR etc.

In general, when the shipowner discusses the vessel’s next employment with a potential charterer, a special ice clause should be agreed and incorporated in the c/p, especially when there is some intention for the vessel to trade within a port or area which may be affected by ice. This clause might be a point of dispute between the parties since each of the Owner and the Charterer may require its own clause passing full of the liabilities to the other party. To overcome this situation, BIMCO has drafted a relevant clause for time charter parties and one for voyage charter parties.

The ice clause for time charter parties mentions that the vessel will not be obliged to force ice however may follow ice breakers subject to Owner’s prior approval. Also, it mentions that the vessel will not be obliged to enter an ice zone in case the Master believes that the vessel will not be able to safely enter, load/discharge and depart and gives Master the authority in such case to sail to the nearest ice-free port. The clause also mentions that any delay and additional cost which will arise due to ice will be for Charterer’s account and the vessel will remain on-hire.

The relevant clause for voyage charter parties describes the actions that the parties should take in case the loading and/or the discharge port becomes inaccessible or unsafe due to ice. In this case, Owners may notify the Charterers who in turn should nominate another safe load or discharge port otherwise the Owners have the right to cancel the charter party (in case the problem arise in the load port) or discharge the cargo at the nearest port (if the problem happens in the discharge port or near the icebreakers meeting point). Furthermore, in case the vessel is already at a port and faces a risk to freeze, according to the Bimco Clause, Owners should notify Charterers and if no action is taken then the Owners may instruct the vessel themselves to sail to the nearest port. In any case, Charterers will need to compensate Owners for any loss happened due to the ice.

Notwithstanding these standard clauses, it is very common the parties to ask for amendments. Especially Charterers try to limit Owner’s rights in order for the Master/Owners not to be able to refuse entering a port just to their own discretion and in some cases due to thin ice only. This happens especially upon negotiation of a single trip/voyage when the parties should be aware of the expected ice conditions. For example, in a voyage from South Korea to East Canada, the following clause had been agreed for a handysize bulker that was not ice-class but agreed to call an area with possible thin ice.

The vessel shall not be ordered to force ice or follow ice-breakers but to trade the ports/areas in which, small size of floating ices are drifted and thin ices are on the surface of waters. If damage is found to the vessel’s hull due to vessel’s trading thin ice area, charterers will indemnify Owners.

The clause is much more generic than the Bimco clause, however gives Owners the right to refuse enter an area where the vessel should force ice or follow ice-breakers and also gives the responsibility for any damage due to ice to Charterers.

(B) Insure the vessel for trading outside the INL

The common H&M cover insures the vessel for worldwide trading within the so called International Navigational Limits (INL). Operating outside the INL, in areas which can be hazardous due to ice, could lead to damage to the ship and delay due to the subsequent repairs. Since the risk for such damage is much higher, the Owners should inform the underwriters well in advance and always prior such call so as to take their consent and insure the vessel, in some cases against an additional premium. The charter party usually regulates the party who will be responsible to cover such additional premium and the Owners usually request same to be Charterer’s responsibility. In any case, the additional cover must be in place in order for the Owners to recover their costs if any damage occurs to vessel’s hull or propulsion system.

(C) Take the latest information and forecast on the ice conditions

Prior the commencement of the voyage, latest information on the ice conditions of the seas and ports should be obtained. The port agent can provide the latest information in regards with the current situation at the ports and forecast. In the meantime, there are also online meteorological websites where someone can be informed of the ice volume and thickness. One such source is the website of the Baltic Sea Ice Services (http://www.bsis-ice.de/actualsituation.shtml) which provides information about the ice conditions in North Sea and Baltic Sea. Another source is the website of the Baltic Icebreaker Management (http://baltice.org/) where you can find information on the ice condition in Baltic Sea, including an interactive map of the ice conditions along with the traffic of ships and icebreakers. Information on the ice conditions in Canada can be found from the Canadian Coast Guard Central and Arctic Region (http://www.marinfo.gc.ca/en/Glaces/index.asp). Similar sources of information are available in all regions where ice is a threat.

(D) Navigate carefully in the ice

Since winter navigation is one of the most dangerous zones in shipping, when it meets the additional risk of Men’s Factor a casualty is more likely to happen. For this reason, it is very important for stricter control on such voyages. First of all, when the vessel is expected to enter an ice area and icebreaker’s assistance is required, the Master needs to keep the local authorities informed of vessel’s ETA in order to arrange for icebreaker’s assistance. These arrangements should be made in a timely manner in order to avoid any vessel’s delay since the ice breakers in the ice areas are not indefinite and their availability highly depends on the overall traffic. Upon request of ice breaker’s assistance, the vessel should maintain contact with the ice breakers via VHF however the initial contact is sometimes difficult and this may result into delays. While under escort, the vessel should be in continuous communication with the icebreaker via radiotelephone.

In order for the vessel to successfully navigate through the ice, she should follow a few important principles. First principal is her ability to maneuver and not trapped in the ice. In this regards, knowing the exact maneuvering characteristics of the ship will definitely assist to better manage difficult ice conditions. Another principal of navigating in the ice is the vessel to keep moving, very slowly though and along with the ice movements and not against them. In case the vessel stops sailing and trapped in the ice, she goes wherever the ice goes. Sailing in high speed should be avoided since it almost always results to damage in the propeller which is a very usual damage from ice. Furthermore, due to the long delays that the vessel may experience, she should be equipped with sufficient water, supplies and fuel.

The vessel should always follow the recommended route which is based on the latest information and ice condition. Additional bridge watches must be arranged depending on the visibility while there should be sufficient light to complete the transit and in case there is not daylight, the vessel must be equipped with sufficient high powered lights. Furthermore, the engine room crew must be ready since the vessel may be required to go full astern at any time and the engine maneuvers may be frequent.

And lastly, a few recommendations from OpenSea Team for fixing ships in the ice areas:

For Charterers: (a) Assess your risks beforehand: In some cases it is much safer and cheaper to leave cargo in the port for a few months, than struggle with delays, higher additional losses and further risks. (b) Input your main ice-clause conditions into special field of your cargo inquiry, in order for shipowners to consider same along with your freight ideas.

For Shipowners: (a) Consider charterer’s ice-clauses not only with the money you will earn, but also with your overall risk and assess whether the ship is actually ready for such voyage. (b) Contact with different port agents and ask for their assessments and recommendations. (c) Check with your underwriters and P&I Club prior fixing the cargo.

For Shipbrokers: (a) Pay special attention to such voyages and check all information from different sources beforehand. (b) Stay objective.

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