Statements of Facts, or SoFs, are documents that provide detailed information about all the events that occurred during the time a vessel spent at port. An SoF includes information about the vessel’s arrival and departure times, the amount of cargo loaded or discharged, and any delays that occurred during the cargo operations.
This document is often completed and filled by the port agent, terminal or shipmaster. And by being a chronological log of a vessel, and given the complexities of industries like oil & gas, mining & metals, such records assume extreme importance for the parties involved, as the information that the SoF contains is later used to calculate laytime and settle demurrage claims.
A Statement of Facts contains an average of 40 events, but this will depend on the type and complexity of the cargo: Within liquid bulk, a Statement of Fact is usually one to two pages, as tankers usually load and discharge only one type of cargo through pipe connections that make it quicker to operate and are not as commonly impacted by weather events.
For break bulk cargoes, on the other hand, the Statement of Fact might extend beyond a couple of pages due to the diverse nature of the cargo. Unlike bulk carriers, breakbulk vessels handle varied cargo types—machinery, timber, steel—which may require different handling techniques. This diversity leads to detailed reporting, which can add up to 100 or more events in an SoF.
Surprisingly, although extremely important for the shipping value chain, many of the SoFs are still written down manually, scanned, and then sent by email to all relevant stakeholders. The information is shared in a PDF file, which is then transcribed into an internal demurrage spreadsheet.
This old-school practice of reviewing SoFs can lead to big contractual deadlocks, as a poorly-written SOF may result in disputes over ambiguous statements: On one side, charterers will try to leverage the delays that happened in order to decrease demurrage. Shipowners on the other hand, may challenge a charterer’s laytime statement based on the events that are in an SoF.
GIven the importance of the subject, this blogpost is an in depth guide of the Statement of Facts document for commodity shippers. We’ll explore how the SoF is structured; its role in driving transparency across maritime operations; challenges & best practices around dealing with this document; and how to extract the most value of SoFs for chartering and demurrage teams.
Key Components of a Statement of Facts Document
A Statement of Fact document is often divided in three parts:
A Header, which contains information such as the name of the vessel, the port location, and the issuing agents contact information; The Body, containing the detailed list of times and events; And the Footer, which may contain technical data, rain logs, stoppage times and reasons, and eventually the signatures from the stakeholders that are involved in this cargo transfer.
A Complete SoF Should Ideally Include: |
Within the events that are logged into a Statement of Facts, three time frames emerge that are essential for both charterers and shipowners. These periods play a crucial role in assessing operational performance and efficiency, and can later be used to drive better voyage planning and commercial decisions:
- Notice of Readiness to All Fast: Denotes the period where the vessel is available at the port for berthing, up to when the vessel is securely moored and all necessary lines and connections are established. A high NoR to All Fast range can mean congestion at the port or berth, possibly due to a lack of available berthing spaces, weather issues or other logistical delays.
- All Fast to Operations Start: Represents the preparatory activities leading up to the commencement of cargo operations, including necessary inspections and paperwork. A longer time might indicate delays in inspections or equipment readiness at berth.
- Operations Start to Operations Complete: The actual time frame in which the cargo operations—whether loading or unloading—were actively carried out. This is a proxy of a port’s efficiency, and a longer period here can point to inefficiencies in cargo handling, equipment malfunctions, manpower issues, or even complications related to the cargo itself.
The Role of SoFs in Driving Transparency and Accountability
Given the high stakes in industries like oil, gas, mining & metals, where even minor delays can result in significant financial implications and supply chain breakdowns, the SoF becomes a pivotal document for settling demurrage disputes. It ensures that the clauses outlined in the charter party are fulfilled and considered in the laytime calculation, based on documented facts rather than assumptions.
In this sense, the Statement of Facts acts as a single source of truth, and ensures that all parties involved have a clear and transparent understanding of the events that happened during the vessel’s port stay.
- Documented Evidence: The SoF serves as an official record, offering evidence of what transpired during a ship’s time at port. Whether it’s the time of arrival, the initiation of cargo operations, or any delays, everything is recorded and signed by all parties.
- Basis for Claims: In instances where disputes arise—like demurrage claims—SoF acts as a reference point. The detailed, timestamped entries mean that parties can ascertain what occurred and when, minimizing the scope for disputes.
- Assigning Responsibility: If there’s a delay or any deviation from what’s accounted for in the charter party, the SoF can help identify the cause and the responsible stakeholder. This ensures that any party that doesn’t fulfill its obligations can be held accountable.
- Benchmarking and Performance Analysis: Over time, reviewing multiple Statements of Facts can provide insights into patterns of delay, stakeholder and port performance, whether certain parties consistently cause delays or whether certain operations take longer than they should. This enables stakeholders to identify operational bottlenecks and take corrective measures when planning the next voyages, or do double down on a specific charter party clause that has been weighing too much on the laytime calculation.
- Financial Implications: The laytime calculation depends on the precise timings and events recorded in the SoF. By ensuring accurate documentation, the SoF indirectly plays a role in the financial accountability of the involved parties and ensures no undue costs to the charterer or shipowner.
Common Challenges When Dealing with SoFs
However, despite its importance, the reality is that commodity shippers often have a hard time trying to decipher SoFs: Handwritten port call events can be confusing and difficult to read, overlapping events might not be exactly described the way they should, and information may not be exactly straightforward:
- Data Accuracy: Transcribing an SoF by hand can be prone to errors, either while categorizing events, or when adding the time stamps and ranges. A lack of attention could mean adding (or deducting) more time to a specific event, which may lead to disputes and miscalculations when processing the claim. Besides, In the hustle and bustle of port operations, updating an SoF with the exact time an event happened can sometimes be overlooked.
- Inconsistent SoF Formats: It’s no doubt that the BIMCO Statement of Facts standard is a push toward uniformity, yet there is still no consistent pattern among SoFs used worldwide as different masters and ports may use different styles of layout for the same document. Besides, teams might often receive different versions from a Statement of Fact with different logged events, making it impossible to choose which version is the correct one.
- Discrepancies around Port Call Events: It’s common for SoFs to miss some events that occurred in a port – this would depend on who’s issuing the SoF, and how important are specific events for its operation or charter party contract. Besides, the name of the events can vary a lot between SoFs, as not all parties have the same naming convention. An example is the event All Fast, which can appear as Vessel Alongside, End Mooring, or Gangway Down, depending on who is drafting the SoF.
- Operational Bottleneck: The reliance on traditional paper & pen for creating a Statement of Facts is a massive operational inefficiency: Data reveals that an SoF document can take up to 90 minutes to be processed (depending on the type of cargo being accounted for), and adds more than 3 hours of processing time along the value chain for chartering, operations and supply chain teams for each Statement of Facts document.
Best Practices for Commodity Shippers
Properly managed, SoFs become invaluable sources of data and insights that can lead to better voyage planning and maritime commercial decisions. Below, we explore some best practices that can significantly help chartering and operations teams when processing SoFs.
Digitalize Statement of Fact Events
One of the most efficient best practices for reducing demurrage costs is to digitize port call events data. SoFs can give detail into every single event throughout the loading and discharging process, which can be used to assess a terminal, berth, or the ship discharge efficiency.
Voyager, for example, applies OCR technology to read and digitize pdf Statement of Facts documents. This data is then used to calculate laytime, process the demurrage claim, and benchmark operation performance through visual dashboards that support chartering and demurrage teams.
Connect Charter Party Logic to Port Call Events
Analyzing port call events in relation to charter party contracts can be valuable to understand the financial implications of specific contract clauses and how they affect demurrage. Are there particular clauses that incur more cost at a certain berth or port? Is there a recurrent weather or delay pattern that can be reconsidered in the charter party agreement?
A logical analysis of your charter party enables dynamic optimization of contracts across the company, allowing for customization down to a specific trade, cargo, or voyage type.
Combining SoF data with charter party logic can showcase powerful trends and lead to better
contract arrangements between charterers and shipowners.
Aggregate SoF Data to Benchmark Operational Performance
When analyzed in the aggregate, SoF data can provide chartering teams with an understanding of the financial implications of calling a specific stakeholder, port or terminal. By benchmarking port calls against a diverse array of factors—such as cargo type, vessel size, terminal capabilities, and even time of year—charterers can identify patterns and anomalies that influence turnaround times.
This approach to data analysis allows for a more nuanced understanding of port operations, extracting actionable intelligence that can inform better scheduling, route management, and better risk forecasting.
SoF data can also be used to compare vessel turnaround times at port
during different stages of berthing and loading/discharging.
Avoid Spreadsheets to Calculate Laytime
While spreadsheets are ubiquitous in shipping operations for tracking SoF events and processing demurrage claims, they come with inherent risks. The complexity and susceptibility to human error in spreadsheet calculations can lead to substantial financial discrepancies.
Implementing specialized software dedicated to handling SoFs and calculating demurrage is highly recommended, as such tools offer greater accuracy and can streamlined operational workflows for chartering teams. Avoiding spreadsheets is not only a best practice but a proactive measure against potential financial mishaps—a lesson many in the industry have learned the hard way.
