18-Feb-2004 -- The visibility is deteriorating, but fortunately the coast is coming closer with each Confluence. Now we are already passing 37N 3E.

This Confluence is located NNW of Alger (Algiers), the capital and main port of Algeria. Alger has about 2.2 million inhabitants.

The view to the SSE shows Alger and Cap Caxine on its West side. The view to SSW shows the ranges of the Tell Atlas.

A glance into the radar shows us the Baie d'Alger with more than 25 ships at the anchorage, waiting for berthing and discharging. This is a "sickness" very typical for many countries like Algeria, where everything is governmental and no private initiative is possible or encouraged. Congested ports due to slow discharging, indifferent and inefficient port workers, agents, officials and receivers. Time is wasted everywhere, the ships are idling around, nothing goes ahead, endless stoppages and waiting periods due to unorganized logistics are common.

What are the consequences?

Well, ships are expensive toys, and a laden ship waiting at the anchorage is even more expensive. On every charter party (i.e. a hire contract) for a ship her owners and the charterers put a clause where they stipulate the maximum number of days a ship may use for discharging (the so called "laydays") - and accordingly on a certain amount of money to be paid to the shipowners for every day the ship needs in addition to discharge. This amount in shipping terms is called "DEMURRAGE". The reason for demurrage is that a shipowner has to be compensated for the delay and for the fact that the ship is not yet prompt at the originally agreed day. Thus it is a kind of penalty for not redelivering the ship back in time.

According to the ship's size and type, demurrage may range from several hundred Dollars per day to several thousands, even far more than 10,000 $ per day. Some shipowners indeed make the real money not with the daily hire they get for the ship, but exclusively with the demurrage.

How does this work? A ship is loaded with, let's say 30,000 tons of wheat from the US to Algeria. In the charter party it is agreed on 12 working days for the discharge of the cargo. Time begins to count as soon as the ship has arrived at the anchorage of the respective discharge port. The Master of the ship duly informs the local agent about his arrival (i.e. he submits his "Notice of Readiness", notifying that his ship has arrived and is ready in all respects to discharge her cargo.) From this very moment time or "laydays" begin to count. The clock is ticking now in favor of the shipowner and against the charterer. But due to port congestion the ship cannot be brought alongside and has to wait at the anchorage for, let's say, 14 days prior to commence discharging. Discharging takes another 15 days then, so the originally stipulated 12 laydays are exceeded by 17 days! - and for these demurrage is payable. A delay of 17 days (and this is even a decent delay in countries like Algeria) cause a demurrage of sometimes well over several 100.000 $.

The question sometimes put to me is: "Who is paying for that?"

Good question. At first hand of course the charterer owes the demurrage to the shipowner. But being well aware of the demurrage to be expected in such ports, he has already taken it generously into account when calculating the freight (i.e. the transport costs). Freight is paid to the charterers by the receiver of the cargo, thus the Algerian importer (mostly a governmental Import-Export-Company). The necessity to pay demurrage rises the price of the merchandise, and the importer is selling it at a higher price to his local wholesellers. The wholesellers at their end have to pay more and accordingly they increase the price towards their retailers, and the ones who really have to pay for everything are the final customers, the small citizens, the ones who need the grain and flour to bake bread, who need the potatoes, the rice and beans, all the imported goods - and this is the Algerian people! The people, lacking anyway a lot of goods in its daily life, have to pay for that - and nobody else!

It is really bitter when we see this misery here on the radar screen. 25 ships (sometimes far more!) idling on the anchorage for nothing... all skyhigh on demurrage and all the year round. A mere destruction of money, millions and millions every year, on the other hand so urgently needed for more benefitial purposes by the Algerian people rather than paying penalties to ships.

And now we see one of the significant reasons why many countries which basically have a lot of ressources do not really develop as they could. It is this restricted economic system, where the Government is rather paralyzing everything than stimulating. One may say: this is indeed scandalous, ... why they do not enlarge their ports and speed up? There is enough unemployed people who would be glad to have a job as a longshoreman or working for such projects... World Bank would give loans at low interests etc etc etc... Yes, all this is correct, but every decision in such countries take endless time. Nobody wants to be responsible for anything, Government is also overthrown in more or less regular intervals, and former decisions, if there are any at all, are annihilated again, ... and so it goes ahead for decades and decades similar to a lingering, insiduous, - and finally lethal - sickness.

Algeria could be a wealthy and prosperous country - if there was not this system, smothering any initiative and offering not the slightest incentive for any economical improvement.

(By the way: the contrary of demurrage is called "DISPATCH". In case a ship completes discharging earlier than originally stipulated, the shipowner has to pay a certain amount per day to the charterers, as he has the advantage of the earlier availability of the ship for her next employment).

In the sea, but with a view of land.