Slop Management and Load on Top (LOT) Procedures

Slop Management and Load on Top (LOT) Procedures in Oil Transportation: Legal, Operational, and Commercial Insights

In the maritime transportation of crude oil and petroleum products, contract clauses go beyond simple logistics and payment terms. Among these, slop management and the Load on Top (LOT) procedure are crucial elements that affect product quality, operational cost, and legal responsibility. This article explains the concept of slop, the mechanics of LOT, and how both are handled within oil shipping agreements.

What is Slop?

Slop refers to the residual mixture of hydrocarbons, water, and tank cleaning waste remaining in a vessel after a previous cargo has been discharged. These residues are typically stored in designated slop tanks on the ship. Managing this material is essential to avoid contamination of the next cargo and to ensure compliance with international maritime regulations.

What is the Load on Top (LOT) Procedure?

Load on Top (LOT) is the practice of loading fresh crude oil or petroleum product directly on top of the existing slop in one or more cargo tanks. This is done instead of discharging or segregating the slop.

While the LOT procedure provides cost and time savings, it introduces risks regarding the final quality of the cargo. Therefore, it is often accompanied by strict sampling and testing requirements, especially if the mixed product is to be sold without further processing.

How is LOT Reflected in Contracts?

A typical clause in oil shipping contracts may read as follows:

“The Seller’s chartered vessel may arrive at the designated load port with slops in one or two tanks. It is the sole and exclusive option of the Seller to perform LOT (Load on Top) procedure or keep said amount of slops segregated from the incoming cargo. In the event of any LOT procedure, Seller will arrange that said tanks containing the slops would be sampled separately.”

This clause gives the Seller full discretion to decide whether to perform LOT or segregate the slops. If LOT is applied, the Seller is responsible for ensuring separate sampling of the affected tanks to document the cargo’s condition and avoid disputes over contamination or quality.

Why is LOT Important?

• Quality Assurance: LOT can impact the overall specification of the cargo. Separate sampling ensures transparency.
• Risk Management: Defines legal responsibility in case of contamination or quality degradation.
• Operational Efficiency: Avoids the need to discharge slops before loading, saving time at the port.
• Cost Savings: Reduces handling and disposal costs associated with slop.

Example Scenario:

A vessel arrives at a loading port with 500 tons of slop in two tanks from its previous voyage. The ship is scheduled to load 25,000 tons of fresh crude oil. The Seller opts to use the LOT procedure, loading the new oil directly on top of the slop. The total loaded quantity becomes 25,500 tons.

Before loading, the slop tanks are sampled separately, and the results are recorded. This ensures that the final cargo composition is traceable, and any disputes regarding quality can be addressed using the sampling data.

If the Seller had chosen to segregate the slop instead, that 500 tons would not have been part of the delivered cargo and would have required special handling or disposal.

In global oil trading, slop and LOT procedures are not minor operational details—they are contractual, technical, and commercial elements that directly affect risk, quality, and profit margins. Sellers benefit from the operational flexibility and cost advantages of LOT, but must ensure compliance through proper sampling and documentation.

For buyers, awareness of these practices is vital for protecting quality expectations and negotiating fair terms. When drafted and executed properly, these clauses allow for efficient and transparent oil trade operations.