Port logs or statement of facts (SOF) are currently produced by multiple parties in a variety of formats , including PDF’s, and even hand written documents. Timed and effort are required to collate and reconcile these statement s before they can be applied to calculations. They are rarely in corporated easily into the company’s Laytime Calculations.
Often the document must be manually reformatted, the data extracted, or details from the SOF manually retyped. This takes time to do, uses valuable manpower doing little more than copy typing, and often introduces errors into the calculation. In a simple trade you can see that the SOF is retyped four times (orange boxes).
Assume a clerk takes 1 hour to input and check a completed SOF that can be retyped into a Demurrage Calculator from a PDF file. A clerk’s salary could be £30,000 per annum, so true employment costs would be double this, say, £60,000 per annum. Assuming 220 days with 7.5 hours worked per day, this gives the clerk an hourly rate of around £36 (or $48 per hour). With
SOFeXchange this work can be done in seconds because the SOF is presented in the format best suited to the Demurrage Calculator, and there need be no retyping at all. Thus, the clerks time is saved.
If a company has 10 vessels, each of which, on average, performs a voyage every 20 days, there will be about 180 voyages per year. As each voyage has at least one load and one discharge, there will be in the region of 350 port calls per year. Hence the annual cost for SOF is $8,750. If delays, errors, incorrect SOFs, etc, result in 1 in 1000 claims that failure (a failure rate of 0.1%), that means one claim is fully lost every 3 years. If the cost of such a claim is a loss in demurrage of $50,000, this is a return on investment of 47%.
SOFs have traditionally been rounded to the nearest 6 minutes. There is no reason for this other than the fact that it is industry practice. SOFeXchange encourages accurate recording of event times. Even with a low demurrage rate of, say, $10,000 PDPR, a saving of anything over 7 minutes per port call will result in a pay back. For larger vessels, where port stays are much longer, the potential savings are substantially higher.
Having the completed SOF available via SOFeXchange, immediately the port call completes, allows the demurrage team to complete a claim without the delay that they experience today. This results in trading PnL’s being accurate, instead of relying on estimated demurrage data. That improves management reporting of trading positions.
The timely availability of the SOF allows for invoicing to happen faster than at present. This means the estimated returns can be actualised and the counter party becomes a trade debtor far sooner. Being able to collect the money earlier results in an improved cash flow position.
There is a charge of USD $25 per port call. This allows unlimited downloads in any format, any number of times. The download is not to be reused or shared outside of the company, but can be used throughout the organisation.
Assume Demurrage is USD 20,000 PDPR. The SOF is 25/20,000 = 0.00125 days = 2 minutes. If we save 2 minutes per port call then we have made a positive difference by more accurate data.