Choosing a VLCC Route Around the Cargo's Commercial Commitments

Overview

The chartering team's role is to make the decision and its assumptions reviewable. It should not turn a map-based preference into an instruction that bypasses the owner's assessment or the proposed contract.

Key takeaways

• Compare routes only after identifying the cargo's required outcome.
• Separate physical feasibility from commercial preference.
• Show how each alternative changes timing and expense exposure.
• Retain a clear process for reconsidering the route.

Define what the route must accomplish

Start with the delivery commitment. A refinery-bound parcel with a firm receiving programme presents a different decision from crude that may be sold to alternative receivers. Both may use a VLCC, but the commercial value of route flexibility differs substantially.

Record the intended delivery location, timing requirement, and remaining destination options. Explain whether a route supports all permitted destinations or favours one at the expense of another. If the cargo desk has not decided which outcome matters most, the route comparison should expose that unresolved priority.

Then identify the base voyage already assumed in the freight negotiation. A route alternative may affect terms that appeared settled under a different itinerary. Ask the contracting team to review the relevant wording rather than assuming that a commercial preference automatically creates a contractual right.

Do not use vessel category as a proxy for access. The Suez Canal Authority publishes navigation rules and related information through its official channels; an intended transit requires relevant current review. See the authority's navigation information. The commercial worksheet should record who is obtaining that review, without attempting to reproduce navigation instructions.

Establish which alternatives are genuinely available

A credible alternative needs more than a line on a route chart. The owner must be willing and able to assess it, receiving arrangements must remain workable, and the commercial parties must understand how the change would be agreed. An option that fails one of those conditions belongs in a pending section.

Ask the owner to provide the relevant passage outlook for each alternative being considered. Ask the agent or specialist for the appropriate local information where a transit or service is involved. Keep the source and date beside each input because route conditions and operational information can change.

For an alternative involving a different discharge arrangement, separate the voyage route from the receiving concept. A change of route and a change of delivery method are not the same decision. Combining them can hide acceptance work or service commitments that have not yet been completed.

A useful feasibility register states the alternative, the reviewer, the outstanding questions, and the decision date. It lets the commercial team continue comparing known features while preventing a speculative option from being presented as immediately executable.

Compare total consequences without inventing a single answer

The comparison should preserve different kinds of cost. Owner-quoted adjustments, externally confirmed charges, internal financing assumptions, and unpriced contingencies should remain distinguishable. This avoids giving a spreadsheet total more authority than its evidence supports.

The table deliberately avoids generic rankings. A longer alternative could be commercially sensible when it supports a usable receiving programme, while a shorter alternative could remain preferable when timing is critical and its dependencies are adequately resolved.

Document the basis of every comparison. If one route assumes immediate receiving readiness and another assumes delay, explain why. Otherwise the analysis may confuse a route advantage with an optimistic port assumption.

Give flexibility an expiry point

Route flexibility loses value when the parties must commit to a particular destination or service. Identify that point and the information expected before it. A route decision can sometimes remain open while the cargo desk gathers better information, but the right to wait should never be assumed.

Separate the commercial recommendation from the authority to implement it. Name the person who can approve additional expense, the person who can amend cargo instructions, and the owner contact responsible for operational assessment. Escalation becomes faster when these roles are clear before uncertainty intensifies.

Write a reconsideration trigger in plain language. Examples include a material change in the receiving programme, an owner-issued passage revision, or the loss of an assumed service arrangement. The trigger should lead to a renewed assessment, not an automatic rerouting instruction.

Also explain what would remain unresolved after approval. A commercial decision may authorise negotiations on an alternative while technical review continues. Recording that distinction prevents internal approval from being misrepresented externally as complete acceptance.

Fictional case: preserving a receiver option

A fictional crude trader has a VLCC parcel initially intended for one refinery, with an alternative buyer still evaluating receipt. The shortest commercial plan favours the first refinery, but a different routing decision would preserve the alternative buyer's timing for longer.

The chartering team asks the owner for conditional passage information and requests separate commercial treatment of the alternative. The cargo desk states when the second buyer will decide. Finance reviews the effect of a later expected delivery without pretending that the alternate sale is already agreed.

The resulting recommendation is conditional: retain the option only until the stated review point, then choose against the information available. If the second buyer declines, the team returns to the base plan subject to the owner's current assessment. If the buyer accepts, the team has already identified the additional approvals and terms needed.

The case illustrates the value of a decision timetable. Flexibility is useful because it supports a particular unresolved sale, not because more route choices are inherently better.

Preserve the reasoning for execution teams

The final decision note should state the selected commercial plan, the information date, outstanding conditions, and the consequences of a material change. Include the owner and receiver confirmations on which the recommendation relies.

Keep operational instructions within the authorised channels. Commercial staff can explain priorities and required delivery outcomes, but the route analysis should not contain improvised navigational directions. That separation also makes it clearer which questions belong with the master, owner, local agent, or contracting team.

After the voyage, review whether the original decision used the available information well. An unforeseen outcome does not automatically make the route choice unreasonable, but an ignored dependency should become a lesson for future enquiries.

Common mistakes

Ranking alternatives solely by distance can omit receiving constraints and contractual consequences. Another error is comparing a confirmed base plan with an unreviewed alternative as though both are equally available.

Avoid inserting unverified transit charges or current operating conditions into a supposedly definitive total. Obtain the relevant information and show its date and scope.

Do not leave the decision open without a named deadline. Indefinite optionality can create uncertainty for the owner and receiver while giving the cargo desk little practical benefit.

Where Zeaclub fits

Zeaclub provides a multi-party shared workspace for owners, charterers, brokers and port agents.

Zeaclub offers digitalised procedures across the voyage workflow.

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