In the world of maritime logistics and shipping, the Statement of Facts (SoF) plays a critical role in documenting every step of a vessel's time at port. This often overlooked document provides essential information about events such as the vessel’s arrival, cargo operations, and any delays encountered during the port stay. Understanding the SoF is crucial for efficient maritime operations, especially when calculating laytime, demurrage claims, and resolving disputes.

This blog will dive into the Statement of Facts and its key components, explore its importance in shipping, and discuss best practices to streamline its use for shippers, charterers, and shipowners alike.

What is a Statement of Facts (SoF)?

The Statement of Facts (SoF) is a formal document that records all the critical activities and events occurring during a vessel's stay at port. This includes the vessel's arrival time, commencement of cargo operations, loading/unloading completion, and any delays that occur during these processes. An SoF is typically prepared by the port agent or ship’s master and signed by both parties to confirm the accuracy of the information.

Components of a Statement of Facts Document

A Statement of Facts shipping example usually includes the following key sections:

1. Vessel Arrival Information: Time and date of the vessel’s arrival at the port and notice of readiness (NoR).

2. Cargo Operations: Details on when cargo loading and unloading started and completed, reflecting port efficiency.

3. Weather Conditions: Documentation of any weather-related stoppages or interruptions in operations.

4. Berth Information: Details about when and where the vessel berthed within the port.

5. Delays and Other Events: Any delays or operational inefficiencies that occurred, such as waiting times due to port congestion or equipment malfunctions.

The Role of SoF in Shipping Operations

Transparency and Accountability

The Statement of Facts ensures that all parties involved—shipowners, charterers, and terminal operators—have a clear record of what occurred during a vessel’s port stay. By acting as a single source of truth, it eliminates guesswork or assumptions that may arise in the event of a dispute. A well-documented SoF helps confirm whether specific contractual terms, such as cargo handling or demurrage clauses, have been followed.

Laytime and Demurrage Calculations

A Statement of Facts is essential for calculating laytime (the time allowed for cargo operations) and potential demurrage (penalties for exceeding the laytime). Accurate SoF documentation helps charterers and shipowners determine the cause of any delays and allocate financial responsibility accordingly. Without a detailed and accurate SoF, it becomes difficult to assess whether the shipowner or the charterer is liable for delays.

For example, if a delay was caused by bad weather, this may not count against the laytime, depending on the terms of the charter party. However, delays caused by port inefficiencies might lead to demurrage claims, which can significantly impact the profitability of a voyage.

Evidence in Disputes

Shipping operations often involve complex contracts, and disputes between charterers and shipowners are not uncommon. In such instances, the Statement of Facts acts as legal evidence. Whether it’s a disagreement over when cargo operations began, a delay in port services, or a dispute over laytime calculation, the SoF provides a timestamped log of events, ensuring disputes are settled based on facts rather than assumptions.

Common Challenges with the Statement of Facts

Despite its importance, many organizations still manage their SoF processes manually. This approach presents several challenges, including:

Data Inaccuracy

Handwritten Statements of Facts are prone to errors, either due to incorrect time stamps or miscommunication between parties. A slight discrepancy in reporting can significantly affect laytime or demurrage calculations, leading to financial disputes.

Inconsistent Formats

There’s no globally standardized format for an SoF, and different ports or agents may use different layouts. This inconsistency makes it difficult for shipping companies to compare data across multiple voyages or assess the performance of specific ports. Standardizing the format of an SoF, or better yet, digitizing it, can streamline this process.

Operational Inefficiency

The manual completion of an SoF, especially in the traditional paper-and-pen method, can take hours. Not only is this inefficient, but it also increases the risk of human error and delayed processing times, particularly when converting the SoF data into internal systems like spreadsheets for further analysis.

Best Practices for Managing Statements of Facts

To optimize the use of SoFs and improve shipping efficiency, shipping companies should consider adopting the following best practices:

1. Digitize the SoF Process

Transitioning from handwritten SoFs to digital systems can save time and improve accuracy. Digital platforms, like Clearvoyage, use Optical Character Recognition (OCR) technology to extract data from SoFs and create a clear digital log of port activities. This not only streamlines data entry but also reduces the risk of errors.

2. Standardize SoF Formats

Having a standardized SoF format helps to ensure consistency across ports, voyages, and stakeholders. Standardization makes it easier to extract meaningful insights from the data and ensures that all parties have access to uniform information.

3. Connect SoF Data to Laytime Calculations

By linking SoF data directly to laytime calculations, charterers and shipowners can quickly assess potential demurrage costs and take proactive measures. For example, real-time access to port call data can highlight delays early, allowing for adjustments in planning and reducing potential financial impacts.

4. Benchmark Port Performance

Analyzing aggregate SoF data across different voyages can help shipping companies identify patterns and trends in port performance. Over time, this allows for smarter decision-making when planning future voyages, optimizing routes, and selecting partners who consistently demonstrate operational efficiency.

Conclusion

The Statement of Facts is a crucial document in the shipping industry, playing a vital role in ensuring transparency, calculating laytime and demurrage, and resolving disputes. As shipping companies continue to look for ways to streamline their operations, digitizing and standardizing the SoF process is becoming increasingly important.

A Voyage Management System can digitize your shipping business and help streamline your workflows.

By following best practices such as using digital platforms, connecting SoF data to laytime calculations, and benchmarking port performance, maritime businesses can leverage this important document to make better operational and commercial decisions.