The existing “Albion”, “Uniform” and “Transcif” softwood contracts have been functioning for well over 20 years and while many companies would probably quite happily continue to use them, they are no longer in line with many aspects of modern shipping.

The contract terms were designed specifically for the UK timber industry, but the advent of electronic documentation and the growth in the movement of softwoods from the Nordic countries to destinations across the world calls for standardisation. When the massive volumes of softwoods imported on these contracts is considered, the need for change becomes even more evident.

One of the most significant changes is the use of “Incoterms” that are laid down by the International Chamber of Commerce (ICC). These terms set out a very clear structure for global contracts and have standardised many parts of all contractual shipping documents.

The Timber Trade Federation‘s National Softwood Division (NSD) has been working for over eight years to agree an updated contract that meets the needs of agents, shippers and importers. The NSD committee, which comprises Nick Boulton (TTF), Martin Cunliffe (Travis Perkins), Asko Raty (Stora Enso), Bernard Lowery (Howarth Timber) and Andrew Venman (Jewson), and which is chaired by Charles Hopping (Hoppings Softwood Products), has formulated a document that appears to meet the requirements of all the parties.

Final draft

A recent meeting gave TTF members the opportunity to see the final draft and comment on it before it goes for agreement with shippers. The intention is that it is effective from January 1, 2005.

The level of interest was proven by the high attendance, with around 40 members present. This appeared to underline the keenness by all the UK parties involved to see the new contract through as speedily as possible.

Mr Raty described Incoterms, laying out the different options available, namely FAS, FOB, FCA, CFR, CIF, CPT, and DDU. A website, www.iccwbo.org/ incoterms/preambles.asp, will provide further information.

As Mr Hopping explained: “There is a lot of pressure from sellers to move to Incoterms. For example CIF under the existing Albion contract is slightly different from the ICC definition, so you may find subtle differences but in many instances things have not changed much at all.”

However, there will inevitably be some issues within any new contract that reduce or detract from the previous agreement for some parties and these opinions were clearly voiced during the meeting.

Reduction in claim times

Concerns centred on “Passing and Retention of Title” and the reduction in claim times on quality and condition from 90 to 30 days by importers. Various comments and discussion took place over these points, with the potential problems of title seeming to mainly be an issue to agents, while claims periods were possibly seen as a larger problem by terminal importers.

While these points were left unresolved, the general consensus was that “this is as good as it gets” and the option is always there to insert a rider into the contract to cater for specific issues.

Summing up, Mr Hopping said: “The Albion and Uniform contracts are well beyond their sell-by dates and all the parties need to get a new contract in place.”

The general feeling from the floor was that the contract is acceptable and it will now go out to the Nordic shippers representatives for their approval.

“We hope to have it all approved from January 1, 2005,” Mr Hopping confirmed.