In a recent case underscoring the essential nature of precise cost estimation in maritime logistics, UK´s indemnity insurance provider International Transport Intermediaries Club (ITIC) has settled a US$140,000 claim resulting from an error in calculating port charges.
The incident involved a South American grain shipment where the pool manager’s use of outdated cost estimates for port fees led to a substantial financial discrepancy.
A pool manager organised a ship to load a cargo of grain at a South American port. Using a Final Disbursement Account (FDA) from a previous ship’s call at the same port, the manager estimated the port costs at US$80,000.
This figure was communicated to the pool owner and incorporated into the freight calculations for the voyage.
Unbeknownst to the manager, the ship assigned for the current voyage was 40,000 metric tonnes larger than the previous one, placing it into a higher pricing bracket under the terminal’s rules. Additionally, its deeper draught necessitated a second pilot, further inflating costs.
Consequently, the actual port charges escalated to US$220,000, vastly exceeding the initial estimate.
The unexpected extra cost of US$140,000 was not included in the freight, ITIC said, resulting in a significant financial shortfall for the pool owner.
Upon investigation, ITIC recognised that the pool manager had failed to update the port cost estimates to reflect the specifications and requirements of the larger ship.
Accepting responsibility for the oversight, ITIC settled the claim in full, compensating the pool owner for the unforeseen expenses.
Mark Brattman of ITIC commented: “This incident serves as a stark reminder of the critical importance of precise cost estimation and diligent planning in maritime logistics.
“The substantial shortfall due to inaccurate port charge estimates underscores the risks involved and the necessity of aligning cost calculations with ship specifications to avoid unforeseen financial impacts.”
