Dolphin Maritime and Aviation Services

 
International specialists in all aspects of inland, marine and aviation transport cargo claims.

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International specialists in all aspects of inland, marine and aviation transport cargo claims.

OCEAN VOYAGER

Date: 8th December 2017    Type: Grounding  Voyage: Spain to Norway ... Read more
 
 

Shortages from bulk cargoes are generally unavoidable, but in the majority of cases, the losses are usually deemed to be “paper losses”.  There are therefore a number of ways in which you can reduce you exposure to such unjustified claims and thereby protect yourself against payments where the losses are beyond the scope of the policy.  Sometimes, this can be achieved by the surveyors taking appropriate measurements in determining the shortage.  Alternatively, you might consider minor amendments to your policies.

As you will be aware, a ship-owner will usually try to avoid liability on the grounds that the loss falls within the “standard” trade allowance.  The standard is as high a figure as he thinks he can successfully get away with and we have often been faced with owners maintaining that the “usual” allowance is 5%.  Clearly, this is absurd.

Generally speaking, a reputable shipping line will apply an allowance of 0.5% – 1.0% although, it must be remembered that this allowance applies to losses proved to have occurred on board the vessel. 

Ideally the policy should therefore also incorporate an excess at a similar percentage.  Naturally, the level of the excess is dependant commercial value of recurrent business.  If set too high, you may lose business, however, if the excess is reduced to an absolute minimum, you will benefit from premiums while at the same time, being faced with huge claims.

On balance, we would recommend an excess of 1%.

However, there are other measures which you can also employ to ensure that claims are kept to a minimum and that they are justified. 

Measurement

When dealing with bulk cargoes, the quantity is extremely difficult to measure accurately.  Furthermore, Bs/L are generally claused “weight unknown”.

Since the carriers can only be held responsible for the amount loaded on board the vessel through to time of discharge, you should ensure that a draft survey is carried out both at the loading and at the discharge port to identify any cargo losses while in the care of the carrier.  While this is fairly inaccurate, it is an accepted measurement.  If the quantities differ, you are clearly in a position to show that carriers are responsible.  Bare in mind our comments on moisture content below.  On the other hand, where the loaded cargo quantity does not match the quantity shown in the invoice, then you are clearly in a position to show that shippers have failed to ship the correct quantity.  Such claims should be rejected. 

Note that carriers can not be held liable for losses quantified by truck scale since any such differences in weight may have occurred while in transit to the weigh bridge which may itself be inaccurate.

Moisture content

It is noted that many claims for losses do not take into account changes in moisture content.  When cargo is shipped, it usually incorporates a substantial moisture content which will evaporate during the course of the voyage.  When the cargo is weighed at the discharge port, unless losses by evaporation are taken into account, a considerable loss will appear to have occurred for which your assured will claim, even though they are not entitled as no actual physical loss has occurred.  Accordingly, a moisture content analysis should be carried out at time of loading and at time of discharge in order that the difference can be properly calculated.  This difference will usually account for several M/T allegedly ?short?.

On the other hand, some cargoes such as sugar can absorb moisture, thereby increasing in weight. This may also result in caking and deterioration of the cargo. Sugar will change its moisture content to achieve equilibrium with the current atmospheric conditions, which may differ greatly from time of loading to time of discharge.  It is essential that any change in percentage moisture is accurately measured and taken into account.

Bags

As you will know, the majority of torn bags occur due to the use of hooks by stevedores.  Carriers will usually argue that cargoes are carried on FIO terms and that the stevedores were employed by the shippers or consignees.  The question of who has legal responsibility for the actions of stevedores is complex and difficult to overcome without litigation, which is usually not cost effective in view of the sums involved.  We would therefore suggest that use of hooks is strongly discouraged perhaps by inserting into the policy an exclusion for losses caused by torn bags as a result of improper use of hooks by the stevedores.

Claims Settling Department