Not infrequently, shippers are a little less than entirely forthcoming about what’s in their boxes, whether it’s how much it weighs or what’s actually inside. It puts masters and ship owners at risk but it’s a tough nut to crack, says Martyn Haines, Senior Claims Director, UK P&I Club.
The huge liabilities which can be incurred by ship owners when containers are lost overboard are frequently compounded by the problems of establishing the circumstances surrounding a particular incident and incomplete knowledge of the containers’ contents.
Information from shippers about what’s in each box and its weight can be inadequate, misleading or inaccurate. Deliberate falsification of bills of lading and cargo manifests for commercial motives is not unknown.
Giving a protection & indemnity insurer’s perspective on “Weighing containers: is it really that difficult?” at a conference in London on 29 June organised by Dunelm Public Relations and sponsored by the UK Club.
Haines says: “Nowadays, container operations are often on a massive scale, involving huge commercial values and carried out in an exacting context of safety and anti-pollution laws and regulations.
“When the ship’s crew is loading in excess of 6,000 containers on a tight schedule, they are provided with limited information prior to sailing but cannot necessarily vouch for its reliability. Inevitably, some problems only emerge when the vessel is at sea. Captains are left to deal with them, albeit with information which remains limited.”
Where container contents turn out to have been misdeclared in relation to substance, volume, weight and perhaps their dangerous or illegal nature, the shipper should have some explaining to do. Says Haines. “However, this does not stop the spotlight being turned on owner and master when things go wrong. They will quickly find a range of parties breathing down their necks in their haste to attribute liability.”
He maintained that with huge numbers of boxes, it was not always immediately obvious if individual containers had been lost overboard or a stack had become unstable – particularly in storm conditions.
Port authorities were rigorous in enforcing a ship owner’s obligations in cleaning up pollution and holding him to account for any safety, legal or code violations that might have contributed to an incident. The prospect of fines was never far away. If they did not get the co-operation they wanted, they might target other vessels in the same line.
Clearly, floating and sunken containers which might be or become navigational or pollution hazards had to be dealt with. Recently, the Dutch Ministry of Waterways ordered the recovery of 50 empty containers which were a hazard to navigation. The cost to the P&I club was $1,500,000.
“There could well be claims from crew for personal injury and from cargo owners for loss or damage. Even if the owner does not know, accurately or substantially what was inside the lost containers, there could still be a claim—perhaps very expensive for high value items. The ship owner himself will claim if his vessel is damaged.”
Mr. Haines advised on how the insurer and his Club member should proceed in relation to liability attribution, variously asserted through the prospect or imposition of ship arrest, fines and heavy claims.
“Record everything: voyage plans, weather anticipation, weather conditions, ship’s revs, the vessel’s immediate position when the incident occurred. Take photos of floating containers and collapsed stacks. When you get to court, they will analyse the master’s actions. Was he proceeding by the book? Was he looking after safety? Inform your P&I club and the coast guard. The club can deal with the authorities and get people on standby for the ship’s arrival at the next port. Information is also ammunition. Do not give it out. Keep it to yourselves for deployment at the most appropriate times.
“Today’s P&I claims handler has to face increasingly intricate situations in assessing and agreeing who should accept liability for exactly what,” concluded Mr. Haines. Contracts can be very complex, especially when they involve consortia. They are drawn up by lawyers rather than people with operational experience. The skilled executive has to look beyond the immediate terms and pay close and detailed attention to all the circumstances if he is to arrive at solutions acceptable to his club member.”
“Perhaps most important, he will be striving to get the ship released and earning again. The ‘time is money’ cliche is particularly relevant in merchant shipping.”