Fish Tender Operators Need to Read the Fine Print on Their Tender Charters
Fish tender vessels transport fresh fish from the catcher vessels on the fishing grounds to processing facilities. Some fish tender vessels are specialized tenders, while others are vessels primarily engaged in other trades, such as crabbing, that supplement their annual income conducting fish tender operations. The agreement for the use of the tender vessel usually takes the form of a tender charter, under which the processor charters the exclusive use of the tender vessel for a term.
The terms most important to the tender vessel operators appear to be the daily charter hire rate, and the guaranteed minimum number of days of the charter. Equally important should be which . . .
of the parties is insuring the cargo of fish carried on the tender vessel, and making sure the insurance extends to protect the tender vessel and owners, and not just the processor. This can be easily accomplished by having the tender vessel and its owner named as an additional assured on the cargo policy and/or securing a waiver of subrogation from the cargo underwriters.
Many tender charters do not address the subject of insurance of the fresh fish cargo. The tender charters are typically written by the processor or its legal counsel, and seldom do the forms favor the tender owner/operator. Some forms essentially make the tender owner/operator a guarantor of the continued quality of the cargo, and leave little or no respite for mechanical breakdowns, groundings or other casualties that could lead to damage to or loss of the cargo.
In our experience, we have seen numerous instances where fresh fish carried aboard tenders spoils. The processor then makes a claim and is compensated for the loss by its cargo insurers, who then sue the tender vessel and its owner for recovery of their subrogation claims. The value of a full hold of fish can be substantial, easily exceeding $250,000, which is far more than most tender operators can hope to earn in tender fees over the course of an entire fishing season.
Tender operators need to be mindful of insuring their risks and carefully reviewing tender charters, or having their legal counsel review them. As they tend to be short, fairly simple documents, the cost for legal review should be manageable, but seldom do we review tender charters before there is a problem. Like they said on the old Fram oil filter commercials: “You can pay me now, or you can pay me later.” The big difference is that waiting until later can be VERY expensive.
