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118-457: The TT Seawise Giant —earlier Oppama ; later Happy Giant , Jahre Viking , Knock Nevis , and Mont —was a ULCC supertanker and the longest self-propelled ship in history, built in 1974–1979 by Sumitomo Heavy Industries in Yokosuka , Kanagawa , Japan. The ship possessed the greatest deadweight tonnage ever recorded. Fully laden, with a displacement was 657,019 tonnes. At

236-423: A bill of parcel and lien authorizing consignment from the consignee. Law 105 stipulated that claims for losses filed by agents, factors, and charterers without receipts were without standing . Law 126 stipulated that filing a false claim of a loss was punishable by law. Law 235 stipulated that a shipbuilder was liable within one year of construction for the replacement of an unseaworthy vessel to

354-475: A loan to a creditor on a schedule with a maturity date specified in written contractual terms . Laws 101 and 102 stipulated that a shipping agent , factor , or ship charterer was only required to repay the principal of a loan to their creditor in the event of a net income loss or a total loss due to an Act of God . Law 103 stipulated that an agent, factor, or charterer was by force majeure relieved of their liability for an entire loan in

472-410: A "sue and labour" clause which will cover the reasonable costs incurred by a shipowner in his avoiding a greater loss. At sea, a ship in distress will typically agree to " Lloyd's Open Form " with any potential salvor. The Lloyd's Open Form (LOF) is the standard contract, although other forms exist. The Lloyd's Open Form is headed "No cure — no pay"; the intention being that if the attempted salvage

590-570: A 40,000  DWT tanker, $ 60.7 million for a 80,000–95,000  DWT , $ 73 million for a 130,000–150,000  DWT , and $ 116 million for 250,000–280,000  DWT tanker. For a concrete example, in 2006, Bonheur subsidiary First Olsen paid $ 76.5 million for Knock Sheen , a 159,899 DWT tanker. The cost of operating the largest tankers, the Very Large Crude Carriers, is currently between $ 10,000 and $ 12,000 per day. Oil tankers generally have from 8 to 12 tanks. Each tank

708-436: A 418,611-ton Ultra Large Crude Carrier (ULCC). The vessel remained unnamed for a long time, and was identified by her hull number, 1016. During sea trials, 1016 exhibited severe vibration problems while going astern. The Greek owner refused to take delivery and the vessel was subject to a lengthy arbitration proceeding. Following settlement, the vessel was sold and named Oppama by S.H.I. The shipyard exercised its right to sell

826-520: A Norwegian investment firm managed by Finanshuset bought the damaged vessel, which had by then been towed to a lay-up location off Labuan. The manager was Norman International AS, a Norwegian ship manager that was subsequently dissolved in 1992. The vessel was subsequently towed from Labuan to Singapore and repaired at the Keppel Corporation . The ship was renamed Happy Giant , in line with Norman International’s tradition of naming tankers with

944-518: A center of innovation after Edwin Drake had struck oil near Titusville, Pennsylvania . Break-bulk boats and barges were originally used to transport Pennsylvania oil in 40-US-gallon (150 L) wooden barrels. But transport by barrel had several problems. The first problem was weight: they weighed 29 kilograms (64 lb), representing 20% of the total weight of a full barrel. Other problems with barrels were their expense, their tendency to leak, and

1062-587: A centre for trade was increasing demand for marine insurance. In the late 1680s, Edward Lloyd opened a coffee house on Tower Street in London . It soon became a popular haunt for ship owners, merchants, and ships' captains, and thereby a reliable source of the latest shipping news. Lloyd's Coffee House was the first marine insurance market. It became the meeting place for parties in the shipping industry wishing to insure cargoes and ships, and those willing to underwrite such ventures. These informal beginnings led to

1180-503: A country, called its flag state . A ship's flag state exercises regulatory control over the vessel and is required to inspect it regularly, certify the ship's equipment and crew, and issue safety and pollution prevention documents. As of 2007, the United States Central Intelligence Agency statistics count 4,295 oil tankers of 1,000 long tons deadweight (DWT) or greater worldwide. Panama

1298-470: A few thousand metric tons of deadweight (DWT) to ultra-large crude carriers (ULCCs) of 550,000  DWT . Tankers move approximately 2.0  billion metric tons (2.2 billion short tons ) of oil every year. Second only to pipelines in terms of efficiency, the average cost of transport of crude oil by tanker amounts to only US$ 5 to $ 8 per cubic metre ($ 0.02 to $ 0.03 per US gallon). Some specialized types of oil tankers have evolved. One of these

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1416-617: A general statement of insurance; the Institute Clauses are used to set out the detail of the insurance cover. In practice, the policy document usually consists of the MAR form used as a cover, with the Clauses stapled to the inside. Typically, each clause will be stamped, with the stamp overlapping both onto the inside cover and to other clauses; this practice is used to avoid the substitution or removal of clauses. Because marine insurance

1534-434: A harbour, for example). In the 19th century, shipowners banded together in mutual underwriting clubs known as Protection and Indemnity Clubs (P&I), to insure the remaining one-quarter liability amongst themselves. These Clubs are still in existence today and have become the model for other specialized and noncommercial marine and non-marine mutuals, for example in relation to oil pollution and nuclear risks. Clubs work on

1652-529: A monohull barge design 488 m (1,601 ft) long and 600,000 tonnes displacement. Seawise Giant's engines were powered by Ljungström turbines . She was damaged in an airstrike in 1988 during the Iran–Iraq War , but was later repaired and restored to service. The vessel was converted to a floating storage and offloading unit (FSO) in 2004, moored off the coast of Qatar in the Persian Gulf at

1770-636: A set of 21 vertical watertight compartments for extra buoyancy . The ship had a length overall of 56 metres (184 ft), a beam of 8.2 metres (27 ft), and a draft of 2.7 metres (9 ft). Unlike later Nobel tankers, the Zoroaster design was built small enough to sail from Sweden to the Caspian by way of the Baltic Sea , Lake Ladoga , Lake Onega , the Rybinsk and Mariinsk Canals and

1888-408: Is Proof of Interest). Their use continued into the 1970s before they were banned by Lloyd's, the main market, by which time they had become nothing more than crude bets. A "tonner" was simply a "policy" setting out the global gross tonnage loss for a year. If that loss was reached or exceeded, the policy paid out. A "chinaman" applied the same principle but in reverse: thus, if the limit was not reached,

2006-435: Is always written on an occurrence basis, covering claims that arise out of damage or injury that took place during the policy period, regardless when claims are made. Policy features often include extensions of coverage for items typical to a marine business such as liability for container damage and removal of debris. A deductible is the first amount of a claim that the policy holders bears themselves. There can occasionally be

2124-455: Is an excess expressed as a proportion of a claim in percentage terms and applied to the entirety of a claim. Co-insurance is a penalty imposed on the insured by the insurance carrier for under reporting/declaring/insuring the value of tangible property or business income. The penalty is based on a percentage stated within the policy and the amount under reported. As an example: a vessel actually valued at $ 1,000,000 has an 80% co-insurance clause but

2242-402: Is beyond the shipowner's control, which imperils the entire adventure; 2) there must be a voluntary sacrifice, 3) there must be something saved. The voluntary sacrifice might be the jettison of certain cargo, the use of tugs, or salvors, or damage to the ship, be it, voluntary grounding, knowingly working the engines that will result in damages. General average requires all parties concerned in

2360-474: Is determined later; although the standard wording refers to the Chairman of Lloyd's arbitrating any award, in practice the role of arbitrator is passed to specialist admiralty QCs . A ship captured in war is referred to as a prize, and the captors entitled to prize money . Again, this risk is covered by standard policies. The most important sections of this Act include::§4: a policy without insurable interest

2478-536: Is independent of the insurers who provide them with the capital to underwrite risks on their behalf. As of 2020, the Nordic region was the largest provider of marine hull insurance at 14% of the world market, China second at 12.4% and Lloyd's of London third at 8.6%, according to the International Union of Marine Insurance . The Marine Insurance Act includes, as a schedule, a standard policy (known as

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2596-472: Is insured for only $ 750,000. Since its insured value is less than 80% of its actual value, when it suffers a loss, the insurance payout will be subject to the under-reporting penalty, the insured will receive 750000/1000000th (75%) of the claim made less the deductible. These are both obsolete forms of early reinsurance. Both are technically unlawful, as not having insurable interest , and so were unenforceable in law. Policies were typically marked P.P.I. (Policy

2714-456: Is known by the acronym 'MAT'. It is common for marine insurance agencies to compete with the offerings provided by local insurers. These specialist agencies often fill market gaps by providing cover for hard-to-place or obscure marine insurance risks that would otherwise be difficult or impossible to find insurance cover for. These agencies can become quite large and eventually become market makers. They operate best when their day-to-day management

2832-413: Is more efficient, and better protection in low-impact collisions and grounding. The same report lists the following as some drawbacks to the double-hull design, including higher build costs, greater operating expenses (e.g. higher canal and port tariffs), difficulties in ballast tank ventilation, the fact that ballast tanks need continuous monitoring and maintenance, increased transverse free surface,

2950-426: Is not always possible in losses to ships at sea or in total theft situations. In this respect, marine insurance differs from non-marine insurance, with which the insured is required to prove his loss. Traditionally, in law, marine insurance was seen as an insurance of "the adventure", with insurers having a stake and an interest in the vessel and/or the cargo rather than simply an interest in the financial consequences of

3068-454: Is split into two or three independent compartments by fore-and-aft bulkheads. The tanks are numbered with tank one being the forwardmost. Individual compartments are referred to by the tank number and the athwartships position, such as "one port", "three starboard", or "six center". A cofferdam is a small space left open between two bulkheads, to give protection from heat, fire, or collision. Tankers generally have cofferdams forward and aft of

3186-436: Is the naval replenishment oiler , a tanker which can fuel a moving vessel . Combination ore-bulk-oil carriers and permanently moored floating storage units are two other variations on the standard oil tanker design. Oil tankers have been involved in a number of damaging and high-profile oil spills . The technology of oil transportation has evolved alongside the oil industry. Although human use of oil reaches to prehistory,

3304-493: Is typically underwritten on a subscription basis, the MAR form begins: We, the Underwriters, agree to bind ourselves each for his own part and not one for another [...] . In legal terms, liability under the policy is several and not joint , i.e., the underwriters are all liable together, but only for their share or proportion of the risk. If one underwriter should default, the remainder are not liable to pick his share of

3422-521: Is unsuccessful, no award will be made. However, this principle has been weakened in recent years, and awards are now permitted in cases where, although the ship might have sunk, pollution has been avoided or mitigated. In other circumstances the "salvor" may invoke the SCOPIC terms (most recent and commonly used rendition is SCOPIC 2000) in contrast to the LOF these terms mean that the salvor will be paid even if

3540-402: Is void.:§17: imposes a duty on the insured of uberrimae fides (as opposed to caveat emptor ), i.e., that questions must be answered honestly and the risk not misrepresented.:§18: the proposer of the insurer has a duty to disclose all material facts relevant to the acceptance and rating of the risk. Failure to do so is known as non-disclosure or concealment (there are minor differences in

3658-586: The Al Shaheen Oil Field . The vessel was sold to Indian ship breakers , and renamed Mont for a final journey in December 2009. After clearing Indian customs, the ship sailed to Alang Ship Breaking Yard , Alang , Gujarat , where she was beached for scrapping, which was completed in 2010. Seawise Giant was ordered in 1974 and delivered in 1979 by Sumitomo Heavy Industries, Ltd. (S.H.I.) at Oppama shipyard in Yokosuka , Kanagawa , Japan, as

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3776-836: The Eastern Roman Empire , a legal opinion written by the Roman jurist Paulus at the beginning of the Crisis of the Third Century in 235 AD was included about the Lex Rhodia ("Rhodian law") that articulates the general average principle of marine insurance established on the island of Rhodes in approximately 1000 to 800 BC as a member of the Doric Hexapolis , plausibly by the Phoenicians during

3894-473: The London Tanker Brokers' Panel (LTBP) . At first, they divided the groups as General Purpose for tankers under 25,000 tons deadweight (DWT); Medium Range for ships between 25,000 and 45,000 DWT and Long Range for the then-enormous ships that were larger than 45,000 DWT. The ships became larger during the 1970s, which prompted rescaling. The system was developed for tax reasons as

4012-583: The Marine Insurance Act codified the previous common law; it is both an extremely thorough and concise piece of work. Although the title of the Act refers to marine insurance, the general principles have been applied to all non-life insurance. In the 19th century, Lloyd's and the Institute of London Underwriters (a grouping of London company insurers) developed between them standardized clauses for

4130-522: The Oppama shipyard by Sumitomo Heavy Industries, Ltd. , named Seawise Giant . This ship was built with a capacity of 564,763  DWT , a length overall of 458.45 metres (1,504.1 ft) and a draft of 24.611 metres (80.74 ft). She had 46 tanks, 31,541 square metres (339,500 sq ft) of deck, and at her full load draft, could not navigate the English Channel . Seawise Giant

4248-545: The Qatar Al Shaheen Oil Field in the Persian Gulf. Knock Nevis was renamed Mont and reflagged to Sierra Leone by new owners Amber Development for a final voyage to India where she was scrapped at Alang by Priya Blue Industries. The vessel was beached on 22 December 2009. Due to the length and the size of the vessel, scrapping only finished at the end of 2010. The ship's 36 tonne anchor

4366-671: The Standard Oil Company along with several of her sister ships . After Glückauf was lost in 1893 after being grounded in fog, Standard Oil purchased the sister ships. The 1880s also saw the beginnings of the Asian oil trade. The idea that led to moving Russian oil to the Far East via the Suez Canal was the brainchild of two men: importer Marcus Samuel and shipowner/broker Fred Lane. Prior bids to move oil through

4484-537: The V-Plus size designation. With the exception of the pipeline, the tanker is the most cost-effective way to move oil today. Worldwide, tankers carry some 2 billion barrels (3.2 × 10  L) annually, and the cost of transportation by tanker amounts to only US$ 0.02 per gallon at the pump. In 1954, Shell Oil developed the "average freight rate assessment" (AFRA) system which classifies tankers of different sizes. To make it an independent instrument, Shell consulted

4602-585: The Volga River . The aft and the stern was put together and then dismantled to make room for the mid-section as the Caspian Sea was reached. In 1883, oil tanker design took a large step forward. Working for the Nobel company, British engineer Colonel Henry F. Swan designed a set of three Nobel tankers. Instead of one or two large holds, Swan's design used several holds which spanned the width, or beam, of

4720-408: The ship-owner that was lost during the term of a charterparty. Laws 236 and 237 stipulated that a sea captain , ship-manager , or charterer was liable for the replacement of a lost vessel and cargo to the shipowner and consignees respectively that was negligently operated during the term of a charterparty. Law 238 stipulated that a captain, manager, or charterer that saved a ship from total loss

4838-457: The "SG form"), which parties were at liberty to use if they wished. Because each term in the policy had been tested through at least two centuries of judicial precedent, the policy was extremely thorough. However, it was also expressed in rather archaic terms. In 1991, the London market produced a new standard policy wording known as the MAR 91 form using the Institute Clauses. The MAR form is simply

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4956-530: The Greek Hellespont Steamship Corporation. Hellespont sold these ships to Overseas Shipholding Group and Euronav in 2004. Each of the sister ships has a capacity of over 441,500  DWT , a length overall of 380.0 metres (1,246.7 ft) and a cargo capacity of 3,166,353 barrels (503,409,900 L). They were the first ULCCs to be double-hulled. To differentiate them from smaller ULCCs, these ships are sometimes given

5074-576: The Marine Board of the National Academy of Sciences conducted a survey of industry experts regarding the pros and cons of double-hull design. Some of the advantages of the double-hull design that were mentioned include ease of ballasting in emergency situations, reduced practice of saltwater ballasting in cargo tanks decreases corrosion, increased environmental protection, cargo discharge is quicker, more complete and easier, tank washing

5192-755: The Suez Canal contributed, as did nationalization of Middle East oil refineries . Fierce competition among shipowners also played a part. But apart from these considerations is a simple economic advantage: the larger an oil tanker is, the more cheaply it can move crude oil, and the better it can help meet growing demands for oil. In 1955 the world's largest supertanker was 30,708  GRT and 47,500 LT  DWT : SS Spyros Niarchos launched that year by Vickers Armstrongs Shipbuilders Ltd in England for Greek shipping magnate Stavros Niarchos . In 1958 United States shipping magnate Daniel K. Ludwig broke

5310-512: The United Kingdom consumed about 1.6 million barrels (250,000 m ) of oil per day in 2009. ULCCs commissioned in the 1970s were the largest vessels ever built, but have all now been scrapped. A few newer ULCCs remain in service, none of which are more than 400 meters long. Because of their size, supertankers often cannot enter port fully loaded. These ships can take on their cargo at offshore platforms and single-point moorings . On

5428-519: The United States and the United Kingdom only had 59 and 27 registered oil tankers, respectively. In 2005, the average age of oil tankers worldwide was 10 years. Of these, 31.6% were under 4 years old and 14.3% were over 20 years old. In 2005, 475 new oil tankers were built, accounting for 30.7 million  DWT . The average size for these new tankers was 64,632  DWT . Nineteen of these were VLCC size, 19 were Suezmax, 51 were Aframax, and

5546-527: The basis of agreeing to accept a shipowner as a member and levying an initial "call" (premium). With the fund accumulated, reinsurance will be purchased; however, if the loss experience is unfavourable one or more "supplementary calls" may be made. Clubs also typically try to build up reserves, but this puts them at odds with their mutual status. Because liability regimes vary throughout the world, insurers are usually careful to limit or exclude American Jones Act liability. These two terms are used to differentiate

5664-457: The breach has been remedied, and the warranty complied with, prior to the loss.:§34(3): a breach of warranty may be waived (ignored) by the insurer.:§39(1): implied warranty that the vessel must be seaworthy at the start of her voyage and for the purpose of it ( voyage policy only).:§39(5): no warranty that a vessel shall be seaworthy during the policy period ( time policy). However, if the assured knowingly allows an unseaworthy vessel to set sail

5782-534: The canal had been rejected by the Suez Canal Company as being too risky. Samuel approached the problem a different way: asking the company for the specifications of a tanker it would allow through the canal. Armed with the canal company's specifications, Samuel ordered three tankers from William Gray & Company in northern England. Named Murex , Conch and Clam , each had a capacity of 5,010 long tons of deadweight. These three ships were

5900-487: The cargo tanks, and sometimes between individual tanks. A pumproom houses all the pumps connected to a tanker's cargo lines. Some larger tankers have two pumprooms. A pumproom generally spans the total breadth of the ship. A major component of tanker architecture is the design of the hull or outer structure. A tanker with a single outer shell between the product and the ocean is said to be "single-hulled". Most newer tankers are " double hulled ", with an extra space between

6018-482: The cargo to expand and contract due to temperature changes, and providing a method to ventilate the tanks. The first successful oil tanker was Zoroaster , built by Sven Alexander Almqvist in Motala Verkstad , which carried its 246 metric tons (242 long tons ) of kerosene cargo in two iron tanks joined by pipes. One tank was forward of the midships engine room and the other was aft. The ship also featured

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6136-489: The charterer. Time charter arrangements specify a daily rate, and port costs and voyage expenses are also generally paid by the charterer. The Worldwide Tanker Normal Freight Scale, often referred to as Worldscale, is established and governed jointly by the Worldscale Associations of London and New York. Worldscale establishes a baseline price for carrying a metric ton of product between any two ports in

6254-462: The claim amount payable. An average adjuster is a marine claims specialist responsible for adjusting and providing the general average statement. An Average Adjuster in North America is a 'member of the association of Average Adjusters' To ensure the fairness of the adjustment a General Average adjuster is appointed by the shipowner and paid by the insurer. An excess is the amount payable by

6372-420: The claim. Typically, marine insurance is split between the vessels and the cargo. Insurance of the vessels is generally known as "Hull and Machinery" (H&M). A more restricted form of cover is "Total Loss Only" (TLO), generally used as a reinsurance, which only covers the total loss of the vessel and not any partial loss. Cover may be on either a "voyage" or "time" basis. The "voyage" basis covers transit between

6490-493: The commencement of the voyage in a voyage policy (section 39(1)) and a warranty of legality of the insured voyage (section 41). The term " salvage " refers to the practice of rendering aid to a vessel in distress. Apart from the consideration that the sea is traditionally "a place of safety", with sailors honour-bound to render assistance as required, it is obviously in underwriters' interests to encourage assistance to vessels in danger of being wrecked. A policy will usually include

6608-519: The company had 34 steam-driven oil tankers, compared to Standard Oil's four case-oil steamers and 16 sailing tankers. Until 1956, tankers were designed to be able to navigate the Suez Canal. This size restriction became much less of a priority after the closing of the canal during the Suez Crisis of 1956. Forced to move oil around the Cape of Good Hope , shipowners realized that bigger tankers were

6726-428: The contract on the basis that it has been repudiated by the party in breach. By contrast, a warranty is not fundamental to the performance of the contract and breach of a warranty, while giving rise to a claim for damages, does not entitle the non-breaching party to terminate the contract. The meaning of these terms is reversed in insurance law. Indeed, a warranty if not strictly complied with will automatically discharge

6844-416: The crew and maintaining the vessel. Finally, in a contract of affreightment or COA, the charterer specifies a total volume of cargo to be carried in a specific time period and in specific sizes, for example a COA could be specified as 1 million barrels (160,000 m ) of JP-5 in a year's time in 25,000-barrel (4,000 m ) shipments. One of the key aspects of any charter party is the freight rate , or

6962-408: The degree of proof that a vessel or cargo has been lost. An actual total loss occurs when the property has been destroyed, or so damaged as to cease to be a thing of the kind insured. A constructive total loss is a situation in which the cost of repairs plus the cost of salvage equal or exceed the value. The use of these terms is contingent on there being property remaining to assess damages, which

7080-499: The demand for new ships started to grow, resulting in 2007 in a record breaking order backlog for shipyards, exceeding their capacity with rising newbuilding prices as a result. This resulted in a glut of ships when demand dropped due to a weakened global economy and dramatically reduced demand in the United States. The charter rate for very large crude carriers, which carry two million barrels of oil, had peaked at $ 309,601 per day in 2007 but had dropped to $ 7,085 per day by 2012, far below

7198-480: The direction of archaeologist Jacques de Morgan , Father Jean-Vincent Scheil , OP found a 2.25-metre (89 in) tall basalt or diorite stele in three pieces inscribed with 4,130 lines of cuneiform law dictated by Hammurabi ( c.  1792 –1750 BC) of the First Babylonian Empire in the city of Shush, Iran . Code of Hammurabi Law 100 stipulated repayment by a debtor of

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7316-603: The establishment of the insurance market Lloyd's of London and several related shipping and insurance businesses. The participating members of the insurance arrangement eventually formed a committee and moved to the Royal Exchange on Cornhill as the Society of Lloyd's . The establishment of insurance companies, a developing infrastructure of specialists (such as shipbrokers , admiralty lawyers, bankers, surveyors, loss adjusters, general average adjusters, et al. ), and

7434-429: The event that the agent, factor, or charterer was the victim of theft during the term of their charterparty upon provision of an affidavit of the theft to their creditor. Code of Hammurabi Law 104 stipulated that a carrier (agents, factors, or charterers) issue a waybill and invoice for a contract of carriage to a consignee outlining contractual terms for sales , commissions , and laytime and receive

7552-513: The fact that they were generally used only once. The expense was significant: for example, in the early years of the Russian oil industry, barrels accounted for half the cost of petroleum production. In 1863, two sail-driven tankers were built on England's River Tyne . These were followed in 1873 by the first oil-tank steamer, Vaderland (Fatherland), which was built by Palmers Shipbuilding and Iron Company for Belgian owners. The vessel's use

7670-400: The first modern commercial exploitation dates back to James Young 's manufacture of paraffin in 1850. In the early 1850s, oil began to be exported from Upper Burma, then a British colony. The oil was moved in earthenware vessels to the river bank where it was then poured into boat holds for transportation to Britain. In the 1860s, Pennsylvania oil fields became a major supplier of oil, and

7788-572: The first tankers of the Tank Syndicate, forerunner of today's Royal Dutch Shell company. With facilities prepared in Jakarta , Singapore , Bangkok , Saigon , Hong Kong , Shanghai , and Kobe , the fledgling Shell company was ready to become Standard Oil's first challenger in the Asian market. On August 24, 1892, Murex became the first tanker to pass through the Suez Canal . By the time Shell merged with Royal Dutch Petroleum in 1907,

7906-499: The fourteenth century and spread to northern Europe. Premiums varied with intuitive estimates of the variable risk from seasons and pirates. Modern marine insurance law originated in the Lex mercatoria (law merchant). In 1601, a specialized chamber of assurance separate from the other Courts was established in England. By the end of the seventeenth century, London's growing importance as

8024-403: The greater number of surfaces to maintain, the risk of explosions in double-hull spaces if a vapor detection system not fitted, and that cleaning ballast tanks is more difficult for double hull ships. Constructive total loss Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between

8142-505: The growth of the British Empire gave English law a prominence in this area which it largely maintains and forms the basis of almost all modern practice. Lord Mansfield , Lord Chief Justice in the mid-eighteenth century, began the merging of law merchant and common law principles. The growth of the London insurance market led to the standardization of policies and judicial precedent further developed marine insurance law. In 1906

8260-547: The hull and the storage tanks. Hybrid designs such as "double-bottom" and "double-sided" combine aspects of single and double-hull designs. All single-hulled tankers around the world will be phased out by 2026, in accordance with the International Convention for the Prevention of Pollution from Ships, 1973 (MARPOL). The United Nations has decided to phase out single hull oil tankers by 2010. In 1998,

8378-484: The insured and is usually expressed as the first amount falling due, up to a ceiling, in the event of a loss. An excess may or may not be applied. It may be expressed in either monetary or percentage terms. An excess is typically used to discourage moral hazard and to remove small claims , which are disproportionately expensive to handle. The term "excess" signifies the "deductible" or "retention". A co-insurance, which typically governs non-proportional treaty reinsurance,

8496-532: The insurer from further liability under the contract of insurance. The assured has no defense to his breach, unless he can prove that the insurer, by his conduct, has waived his right to invoke the breach, possibility provided in section 34(3) of the Marine Insurance Act 1906 (MIA). Furthermore, in the absence of express warranties the MIA will imply them, notably a warranty to provide a seaworthy vessel at

8614-435: The insurer is not liable for losses caused by unseasworthiness.:§50: a policy may be assigned . Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor.:§§60-63: deals with the issues of a constructive total loss. The insured can, by notice, claim for a constructive total loss with the insurer becoming entitled to the ship or cargo if it should later turn up. (By contrast an actual total loss describes

8732-534: The key to more efficient transport. While a typical T2 tanker of the World War II era was 162 metres (532 ft) long and had a capacity of 16,500  DWT , the ultra-large crude carriers (ULCC) built in the 1970s were over 400 metres (1,300 ft) long and had a capacity of 500,000  DWT . Several factors encouraged this growth. Hostilities in the Middle East which interrupted traffic through

8850-432: The late 19th century, one of the largest oil companies in the world. Ludvig was a pioneer in the development of early oil tankers. He first experimented with carrying oil in bulk on single-hulled barges. Turning his attention to self-propelled tankships, he faced a number of challenges. A primary concern was to keep the cargo and fumes well away from the engine room to avoid fires. Other challenges included allowing for

8968-406: The maritime venture (hull/cargo/freight/bunkers) to contribute to make good the voluntary sacrifice. They share the expense in proportion to the 'value at risk" in the adventure. Particular average is the term applied to partial loss be it hull or cargo. Average – is the situation in which the insured has under-insured, i.e., insured an item for less than it is worth. Average will apply to reduce

9086-438: The operating costs of these ships. As a result, several tanker operators laid up their ships. Prices rose significantly in 2015 and early 2016, but delivery of new tankers was projected to keep prices in check. Owners of large oil tanker fleets include Teekay Corporation , A P Moller Maersk , DS Torm , Frontline , MOL Tankship Management , Overseas Shipholding Group , and Euronav . In 2005, oil tankers made up 36.9% of

9204-430: The other end of the journey, they often pump their cargo off to smaller tankers at designated lightering points off-coast. Supertanker routes are typically long, requiring them to stay at sea for extended periods, often around seventy days at a time. The act of hiring a ship to carry cargo is called chartering. (The contract itself is known as a charter party . ) Tankers are hired by four types of charter agreements:

9322-425: The past, ships of the smaller Aframax and Suezmax classes are no longer regarded as supertankers. "Supertankers" are the largest oil tankers, and the largest mobile man-made structures. They include very large and ultra-large crude carriers (VLCCs and ULCCs – see above) with capacities over 250,000 DWT. These ships can transport 2,000,000 barrels (320,000 m ) of oil/318,000 metric tons. By way of comparison,

9440-414: The physical destruction of a vessel or cargo.):§79: deals with subrogation , i.e., the rights of the insurer to stand in the shoes of an indemnified insured and recover salvage for his own benefit. Schedule 1 of the Act contains a list of definitions; schedule 2 contains the model policy wording. Australia has adopted an amended version of this Act, being the Marine Insurance Act 1909. Marine insurance

9558-425: The points of origin and the final destination. Cargo insurance is the sub-branch of marine insurance, though marine insurance also includes onshore and offshore exposed property, ( container terminals , ports, oil platforms , pipelines), hull, marine casualty, and marine losses. When goods are transported by mail or courier or related post, shipping insurance is used instead. In December 1901 and January 1902, at

9676-416: The policy paid out. Various specialist policies exist, including: A peculiarity of marine insurance, and insurance law generally, is the use of the terms condition and warranty . In English law, a condition typically describes a part of the contract that is fundamental to the performance of that contract, and, if breached, the non-breaching party is entitled not only to claim damages but to terminate

9794-445: The ports set out in the policy; the "time" basis covers a period, typically one year, and is more common. A marine policy typically covered only three-quarter of the insured's liabilities towards third parties (Institute Time Clauses Hulls 1.10.83). The typical liabilities arise in respect of collision with another ship, known as "running down" (collision with a fixed object is an "allision"), and wreck removal (a wreck may serve to block

9912-489: The prefix «Happy» and bulkers with the prefix «Norman». She re-entered service in October 1991. Jørgen Jahre bought the tanker in 1991 for US$ 39 million and renamed her Jahre Viking . From 1991 to 2004, she was owned by various Norwegian investment firms and flew the flag of Norway . In 2004, the tanker was purchased by First Olsen Tankers , renamed Knock Nevis , and converted into a permanently moored storage tanker in

10030-581: The price specified for carriage of cargo. The freight rate of a tanker charter party is specified in one of four ways: by a lump sum rate, by rate per ton, by a time charter equivalent rate, or by Worldscale rate. In a lump sum rate arrangement, a fixed price is negotiated for the delivery of a specified cargo, and the ship's owner/operator is responsible to pay for all port costs and other voyage expenses. Rate per ton arrangements are used mostly in chemical tanker chartering, and differ from lump sum rates in that port costs and voyage expenses are generally paid by

10148-415: The propeller weighed 50 tons. Seawise Giant was damaged in 1988 during the Iran–Iraq War by an Iraqi Air Force attack while anchored off Larak Island , Iran on 14 May 1988 and carrying Iranian crude oil. The ship was struck by 2 Exocet missiles . Fires ignited aboard the ship and on oil that escaped into the surrounding water, which blazed out of control. Contrary to some more recent online reports,

10266-750: The proposed Dorian invasion and emergence of the purported Sea Peoples during the Greek Dark Ages ( c.  1100  – c.  750 ) that led to the proliferation of the Doric Greek dialect . The law of general average constitutes the fundamental principle that underlies all insurance . The oldest hedging instruments to mitigate risk in medieval times were sea/marine (Mutuum) loans, commenda contract, and bill of exchanges. Separate marine insurance contracts were developed near Genoa , in Camogli in 1853 and other Italian cities in

10384-528: The record of 100,000 long tons of heavy displacement. His Universe Apollo displaced 104,500 long tons, a 23% increase from the previous record-holder, Universe Leader which also belonged to Ludwig. The first tanker over 100,000 dwt built in Europe was the British Admiral . The ship was launched at Barrow-in-Furness in 1965 by Elizabeth II . The world's largest supertanker was built in 1979 at

10502-788: The rest consisted of refined petroleum products. This amounted to 34.1% of all seaborne trade for the year. Combining the amount carried with the distance it was carried, oil tankers moved 11,705 billion metric-ton-miles of oil in 2005. By comparison, in 1970 1.44 billion metric tons of oil were shipped by tanker. This amounted to 34.1% of all seaborne trade for that year. In terms of amount carried and distance carried, oil tankers moved 6,487 billion metric-ton-miles of oil in 1970. The United Nations also keeps statistics about oil tanker productivity, stated in terms of metric tons carried per metric ton of deadweight as well as metric-ton-miles of carriage per metric ton of deadweight. In 2005, for each 1  DWT of oil tankers, 6.7 metric tons of cargo

10620-434: The rest were smaller designs. By comparison, 8.0 million  DWT , 8.7 million  DWT , and 20.8 million  DWT worth of oil tanker capacity was built in 1980, 1990, and 2000 respectively. Ships are generally removed from the fleet through a process known as scrapping . Ship-owners and buyers negotiate scrap prices based on factors such as the ship's empty weight (called light ton displacement or LDT) and prices in

10738-443: The salvage attempt is unsuccessful. The amount the salvor receives is limited to cover the costs of the salvage attempt and 25% above it. One of the main negative factors in invoking SCOPIC (on the salvor's behalf) is if the salvage attempt is successful the amount at which the salvor can claim under article 13 of LOF is discounted. The Lloyd's Open Form, once agreed, allows salvage attempts to begin immediately. The extent of any award

10856-488: The scrap metal market. In 1998, almost 700 ships went through the scrapping process at shipbreakers in places such as Gadani , Alang and Chittagong . In 2004 and 2005, 7.8 million  DWT and 5.7 million  DWT respectively of oil tankers were scrapped. Between 2000 and 2005, the capacity of oil tankers scrapped each year has ranged between 5.6 million  DWT and 18.4 million  DWT . In this same timeframe, tankers have accounted for between 56.5% and 90.5% of

10974-406: The ship could reach up to 16.5 knots (30.6 km/h) in good weather. It took 9 km ( 5 + 1 ⁄ 2 miles) for the ship to stop from that speed, and the turning circle in clear weather was about 3 km (2 miles). The Jahre Viking Oil tanker Oil tankers are often classified by their size as well as their occupation. The size classes range from inland or coastal tankers of

11092-442: The ship had a capacity of 564,763 tonnes deadweight (DWT), a length overall of 458.45 m (1,504.1 ft) and a draft of 24.611 m (80.74 ft). It had 46 tanks, and 31,541 m (339,500 sq ft) of deck space. When Seawise Giant was fully loaded, her 25 meter/81 foot draft was too deep for the ship to safely navigate the relatively shallow waters of the English Channel . The rudder weighed 230 tons, and

11210-421: The ship. These holds were further subdivided into port and starboard sections by a longitudinal bulkhead. Earlier designs suffered from stability problems caused by the free surface effect , where oil sloshing from side to side could cause a ship to capsize. But this approach of dividing the ship's storage space into smaller tanks virtually eliminated free-surface problems. This approach, almost universal today,

11328-521: The subject-matter's survival. The term "constructive total loss", or CTL, was used by the United States Navy during and after World War II to describe naval vessels that were damaged to such an extent that they were beyond economical repair. This was most often applied to small-type ships ( destroyer , patrol boats, landing ships, mine warfare vessels, etc.) in 1945, the last year of the war, many of which were damaged by kamikazes ; postwar

11446-512: The supply and demand of oil as well as the supply and demand of oil tankers. Some particular variables include winter temperatures, excess tanker tonnage, supply fluctuations in the Persian Gulf , and interruptions in refinery services. In 2006, time-charters tended towards long term. Of the time charters executed in that year, 58% were for a period of 24 or more months, 14% were for periods of 12 to 24 months, 4% were from 6 to 12 months, and 24% were for periods of less than 6 months. From 2003,

11564-713: The system is still used today. Besides that, there is the flexible market scale, which takes typical routes and lots of 500,000 barrels (79,000 m ). Merchant oil tankers carry a wide range of hydrocarbon liquids ranging from crude oil to refined petroleum products. Crude carriers are among the largest, ranging from 55,000 DWT Panamax -sized vessels to ultra-large crude carriers (ULCCs) of over 440,000 DWT. Smaller tankers, ranging from well under 10,000 DWT to 80,000 DWT Panamax vessels, generally carry refined petroleum products, and are known as product tankers. The smallest tankers, with capacities under 10,000 DWT generally work near-coastal and inland waterways. Although they were in

11682-584: The tax authorities wanted evidence that the internal billing records were correct. Before the New York Mercantile Exchange started trading crude oil futures in 1983, it was difficult to determine the exact price of oil, which could change with every contract. Shell and BP , the first companies to use the system, abandoned the AFRA system in 1983, later followed by the US oil companies. However,

11800-433: The term was also used for ships damaged in typhoons. By this time enough ships were available for the war that some could be disposed of if severely damaged. Average in marine insurance terms is "an equitable apportionment among all the interested parties of such an expense or loss". General average stands apart for marine insurance. In order for general average to be properly declared, 1) there must be an event which

11918-530: The time she was built, she was the heaviest self-propelled ship of any kind. With a laden draft of 24.6 m (81 ft) and a length of 458.45 m (1,504.10 ft), she was incapable of navigating the English Channel , the Suez Canal or the Panama Canal . Overall, she is generally considered the largest self-propelled ship ever built. In 2013 her overall length was surpassed by 30 m by the floating liquified natural gas installation Shell Prelude ( FLNG ),

12036-414: The two terms) and renders the insurance voidable by the insurer.:§33(3): If [a warranty] be not [exactly] complied with, then, subject to any express provision in the policy, the insurer is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date. :§34(2): where a warranty has been broken, it is no defense to the insured that

12154-430: The use of marine insurance, and these have been maintained since. These are known as the Institute Clauses because the Institute covered the cost of their publication. Out of marine insurance, grew non-marine insurance and reinsurance . Marine insurance traditionally formed the majority of business underwritten at Lloyd's . Nowadays, Marine insurance is often grouped with Aviation and Transit (cargo) risks, and in this form

12272-407: The vessel and a deal was brokered with Hong Kong Orient Overseas Container Line founder C. Y. Tung to lengthen the ship by several metres and add 146,152 tonnes of cargo capacity through jumboisation . Two years later the ship was relaunched as Seawise Giant . "Seawise", a pun on "C.Y.'s", was used in the names of other ships owned by C.Y. Tung, including Seawise University . After the refit,

12390-458: The vessel did not sink; images of the burnt-out but still afloat vessel have been published online. After the fires were extinguished, the remaining cargo was discharged to other tankers. The ship was declared a constructive total loss , which means the ship was intact but so damaged that it would cost more to repair it than the value of the repaired vessel. Shortly after the Iran–Iraq war ended,

12508-466: The vessel hull instead of being loaded in barrels or drums. It was also the first tanker with a horizontal bulkhead; its features included cargo valves operable from the deck, cargo main piping, a vapor line, cofferdams for added safety, and the ability to fill a ballast tank with seawater when empty of cargo. The ship was built in Britain, and was purchased by Wilhelm Anton Riedemann, an agent for

12626-424: The voyage charter, the time charter, the bareboat charter , and contract of affreightment . In a voyage charter the charterer rents the vessel from the loading port to the discharge port. In a time charter the vessel is hired for a set period of time, to perform voyages as the charterer directs. In a bareboat charter the charterer acts as the ship's operator and manager, taking on responsibilities such as providing

12744-401: The world's fleet in terms of deadweight tonnage. The world's total oil tankers deadweight tonnage has increased from 326.1 million  DWT in 1970 to 960.0 million  DWT in 2005. The combined deadweight tonnage of oil tankers and bulk carriers, represents 72.9% of the world's fleet. In 2005, 2.42 billion metric tons of oil were shipped by tanker. 76.7% of this was crude oil, and

12862-610: The world's total scrapped ship tonnage. In this period the average age of scrapped oil tankers has ranged from 26.9 to 31.5 years. In 2005, the price for new oil tankers in the 32,000–45,000  DWT , 80,000–105,000  DWT , and 250,000–280,000  DWT ranges were $ 43 million, $ 58 million, and $ 120 million respectively. In 1985 these vessels would have cost $ 18 million, $ 22 million, and $ 47 million respectively. Oil tankers are often sold second hand. In 2005, 27.3 million  DWT worth of oil tankers were sold used. Some representative prices for that year include $ 42.5 million for

12980-490: The world. In Worldscale negotiations, operators and charterers will determine a price based on a percentage of the Worldscale rate. The baseline rate is expressed as WS 100. If a given charter party settled on 85% of the Worldscale rate, it would be expressed as WS 85. Similarly, a charter party set at 125% of the Worldscale rate would be expressed as WS 125. The market is affected by a wide variety of variables such as

13098-513: Was only required to pay one-half the value of the ship to the shipowner. Law 240 stipulated that the owner of a cargo ship that destroyed a passenger ship in a collision was liable for replacement of the passenger ship and cargo it held upon provision of an affidavit of the collision by the owner of the passenger ship. In the Digesta seu Pandectae (533), the second volume of the codification of laws ordered by Justinian I (527–565) of

13216-668: Was carried. Similarly, each 1  DWT of oil tankers was responsible for 32,400 metric-ton miles of carriage. The main loading ports in 2005 were located in Western Asia, Western Africa, North Africa, and the Caribbean, with 196.3, 196.3, 130.2 and 246.6 million metric tons of cargo loaded in these regions. The main discharge ports were located in North America, Europe, and Japan with 537.7, 438.4, and 215.0 million metric tons of cargo discharged in these regions. International law requires that every merchant ship be registered in

13334-550: Was curtailed by US and Belgian authorities citing safety concerns. By 1871, the Pennsylvania oil fields were making limited use of oil tank barges and cylindrical railroad tank-cars similar to those in use today. The modern oil tanker was developed in the period from 1877 to 1885. In 1876, Ludvig and Robert Nobel , brothers of Alfred Nobel , founded Branobel (short for Brothers Nobel) in Baku , Azerbaijan . It was, during

13452-441: Was first used by Swan in the Nobel tankers Blesk , Lumen , and Lux . Others point to Glückauf , another design of Colonel Swan, as being the first modern oil tanker. It adopted the best practices from previous oil tanker designs to create the prototype for all subsequent vessels of the type. It was the first dedicated steam-driven ocean-going tanker in the world and was the first ship in which oil could be pumped directly into

13570-458: Was not the largest ship by gross tonnage, ranking sixth at 260,941 GT, behind the crane ship Pioneering Spirit and the four 274,838 to 275,276 GT Batillus -class supertankers . She was the longest and largest by deadweight: 564,763 tonnes. Seawise Giant was featured on the BBC series Jeremy Clarkson's Extreme Machines while sailing as Jahre Viking . According to her captain, S. K. Mohan,

13688-496: Was renamed Happy Giant in 1989, Jahre Viking in 1991, and Knock Nevis in 2004 (when she was converted into a permanently moored storage tanker). In 2009 she was sold for the last time, renamed Mont , and scrapped . As of 2011, the world's two largest working supertankers are the TI-class supertankers TI Europe and TI Oceania . These ships were built in 2002 and 2003 as Hellespont Alhambra and Hellespont Tara for

13806-495: Was saved and donated to the Hong Kong Maritime Museum in 2010. It was later moved to a Hong Kong Government Dockyard building on Stonecutters Island . Seawise Giant was the longest ship ever constructed, at 458.45 m (1,504.1 ft), longer than the height of many of the world's tallest buildings, including the 451.9 m (1,483 ft) Petronas Towers . Despite a great length, Seawise Giant

13924-674: Was the world's largest flag state for oil tankers, with 528 of the vessels in its registry. Six other flag states had more than 200 registered oil tankers: Liberia (464), Singapore (355), China (252), Russia (250), the Marshall Islands (234) and the Bahamas (209). The Panamanian, Liberian, Marshallese and Bahamian flags are open registries and considered by the International Transport Workers' Federation to be flags of convenience . By comparison,

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