JANUARY 27, 1998

CIRCULAR NO. 3/98

TO MEMBERS OF THE ASSOCIATION

Dear Member:

VOYAGE SURCHARGES FOR U.S. TRADING TANKERS: 1998 POLICY YEAR

The current system of charging voyage surcharges for tankers trading to the United States will continue for the next policy year.

As is the case at present, a differential will apply as between those vessels which have segregated ballast tanks (SBT) and those which are not so equipped. In order to qualify for the lower rates applicable to the SBT category of tonnage, a vessel must be equipped with segregated ballast tanks as defined by Regulation 13 of Annex 1 to MARPOL 73/78.

Tankers with SBT will attract a surcharge of US $0.14 per gross ton per voyage in 1998, down from US $0.16 in 1997. Non-SBT tankers will pay US $0.16 per gross ton per voyage in 1998, down from US $0.18 in 1997. As is the case in the current year, a 20 voyage "cap" will continue to apply. Equally, the 50% reduction for tankers calling at the Louisiana Offshore Oil Port (LOOP) or other designated lightering areas will continue.

Parcel tankers will also be treated differently in 1998. In contrast to the arrangements which currently apply, the full gross tonnage of a parcel tanker will only be used for the calculation of a voyage surcharge where that vessel carries more than 10,000 mt of persistent oil as cargo. If a vessel carries between 5,001 mt and 10,000 mt it will incur a cost based on a tonnage of 7,500 gross tons. Otherwise, a parcel tanker carrying 5,000 mt or less of persistent oil as cargo will incur the fixed voyage cost applying to a vessel of 3,000 gross tons, the rule which currently applies.

Members may find the following table to be of assistance in setting out the 1998 policy year arrangements.

The Managers will be pleased to respond to any questions Members may have in regard to the above, or generally.

Yours faithfully,

Joseph E.M. Hughes
Chairman & CEO 
Shipowners Claims Bureau, Inc. 
Managers for THE AMERICAN CLUB