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In October 2000, a freight forwarder inShanghai received a fax from an unknowncompany in Hong Kong who claimed to be a“consolidator/forwarder” and offered them anew business opportunity of arranging someshipments from Shanghai to Chittagong.
The consolidator alleged that they wereintroduced by another forwarder in SouthKorea and would like to nominate theShanghai forwarder to ship out the goods fromChina, firstly to Hong Kong for consolidation,with a final destination in Bangladesh orIndonesia.
The consolidator asked that they arrangethe shipment as follows:
THE MAGAZINE OF THE TT CLUB, NEWS AND ESSENTIAL INFORMATION THE TRANSPORT MUTUAL FOR CLUB MEMBERS AND THEIR BROKERS
Continued on back page
This arrangement between the forwarder andconsolidator went on smoothly for the first twoshipments, where all of the cargoes were oflow value.
A problem arose on the third shipmentinvolving the transport of denim at a value ofUS$500,000. The consignee shown onforwarder’s through bill of lading claimed thatthe cargo had never arrived. The shipper inChina, who still held the full set of originalhouse bills of lading, claimed that they hadnever received money from the buyer becausethe letters of credit were fake.
The Shanghai forwarder is facing threatenedlegal action from the shipper for the full cargovalue of US$500,000. The buyer even
Beware of fraud with newbusiness opportunities
■ the Shanghai forwarder to issue their ownthrough bill of lading covering the entirety ofthe intended voyage from Shanghai toChittagong showing the buyer as theconsignee.■ they arrange an ocean voyage fromShanghai to Hong Kong with a shipping line,whilst naming the consolidator as consigneeon the ocean bill of lading.■ the consolidator would take delivery of thecargo in Hong Kong and then arrangetransshipment to the ultimate consignee inChittagong after consolidation.■ the buyer in Chittagong to issue a letter ofcredit.
suspected that the forwarder might have beeninvolved in the fraud with the consolidatorregarding the shipment. RecommendationsNever issue any bill of lading assumingresponsibility for an entire voyage where you, infact, have no control over the voyage.
ContentsClub News 2
Sending blank bills of lading? 3
Vertical Tandem lifting (VTL)of containers 4
IMDG Code- Amendment 30 5
Young International FreightForwarder of the Year 6
Containers Overboard! 8
Mutual Concern 10
Speed and empty straddle carriers 11
Benchmarking of accidents 12
Some newbusiness cangenerate a lossinstead of a profit.
®
By Larry Kwok, Hong Kong
The Shanghai forwarder isfacing threatened legalaction from the shipper forthe full cargo value ofUS$500,000.
ISSUE NO.3/2001 EDITED BY JOHN NICHOLLS
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CLU
BNEW
S
Ian Lush joined the Club Managers in Januaryfrom GeoLogistics where he was EuropeanMarketing Director with specific responsi-bilities for marketing development across all ofGeoLogistic’s operations in Europe, the MiddleEast and Africa.
Ian brings to TT a broad experience base gainedin LEP International (re-branded GeoLogisticsin 1998) and in Pinkerton Security Serviceswhere he was part of an international teamfocusing on the security of high value productsin transit.
IanLushappointed Marketing Director
New Property UnderwriterRecognising market pressure for one-stopshopping, the Club recently announced that itwould expand its ports and terminal operators’cover to include property related risks. Toassist in the development of this new businesssector, Niels H. Aaskov has been appointed asits Property Underwriter.
Chief Executive, Paul Neagle providesfurther details: “Many terminals which areprimarily container handling facilities, alsohave property risks, typically warehouses,storage and inspection facilities. The Club hastaken a decision to position itself so that it is
Members and brokers will know that the designof Club certificates has changed. The intentionhas been to make them more attractive, andeasier to follow.
To go with this change, we have re-written theClub wordings. The cover is identical to thatcontained in the existing wordings, and in someplaces enhanced. This is formally guaranteedby the Club.
However, simpler language has been usedand the number of words has been reduced bybetween one-half and two-thirds. There is now asemi-tabular layout and increased reliance oncontext and cross-referencing, in order to keeprepetition to a minimum.
To minimise confusion, the existing structurehas been preserved. Cover is still generallymade up of clauses dealing with the same risks,assembled in the same sequence. Only thestyle within the individual clauses dealing witheach risk has been revised.
The results have been thoroughly testedglobally, by marine lawyers and potential users.We now feel confident to roll out the wordings.They will begin to appear with accounts startingor renewing from mid-2001 onwards.
Members and brokers who would like to lookat these new wordings immediately, or who haveany comments or questions, should contact IanHyslop at the Managers’ office in London.
Simplification changesto the Club’s wordings
able to underwrite such risks as part of anoverall package. Indeed, this strategy hasalready paid dividends with the acquisition ofadditional business in both the Americas andEurope.”
Niels points out that other types ofMembers have property risks and it seemedlogical and consistent with the mutuality of theClub for these risks to be written as part of theClub package.
“The fast-developing logistics and supplychain management sectors offer us majoropportunities. Many forwarders and logistics &supply chain specialists now have largeproperty assets such as warehouses anddistribution centres and they require cover forthese buildings and their contents wherever inthe world they are located.”
Niels joined the Club from AIG where hewas Assistant Vice-President, AIG GlobalProperty Facility. He has extensive experienceof writing property and energy business aroundthe world and has wide contacts in non-marineareas of the market which, formerly, have notbeen part of the Club’s business but which arebecoming relevant as the transportationindustry’s insurance requirements evolve.
Niels has excellent linguistic skills. His firstlanguage is Danish, he also speaksNorwegian, Swedish and some Germanbesides excellent English.
Commenting on his new role, Ian explains, “theClub has a great opportunity to leverage itsmarket position not only to build upon existingproducts but also to add significant value to itsMembers’ businesses with new, innovativeproducts. The opportunity to work within thisconstantly evolving market in a newly createdrole is both exciting and demanding.”
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agent at the loading point. The cargo mayhave been badly packed or stowed: if it has,you will be responsible for the damage unlessthe bill has been appropriately claused.Maybe the cargo was short-shipped, yet theagent issued a “clean on board” bill of ladingin your name: you have stated that the cargowas definitely on board the named vessel andwill be liable to the consignee when it doesnot turn up on the due date. Maybe someonein the agent's office is doing some unofficial“side business” with the shipper: effectivelyconspiring together to defraud the buyer orthe banks. Whatever is going on, all the timethe bills of lading are being issued with yourname, address and company logo proudly atthe top.
For these and a host of similar reasons, theTT Club does not recommend that forwarderssend out packs of their blank bills of lading toother forwarding companies in anothercountry, unless both companies are somehowlinked through ownership, shareholdings orsimilar arrangements. It is far better, in theClub’s view, for each partner in a joint serviceto issue its own bills for outward-bound cargo:that way each company takes responsibility forits own loading and despatch arrangements.Some agreement may be necessary for thepartners to share the deductibles on insuranceclaims in the same way as profits are oftenshared, but that is a different matter entirelyfrom giving someone the keys to your owncompany safe.
If, having read this, you still feel that you cantrust someone sufficiently with blanks of yourbills of lading, then you should take thefollowing precautions:
Of course you would not do that as you wouldhave no control over the use that the agentwould make of your cheque book. Yet givingsomeone your blank bills of lading tocomplete and sign on your behalf, amounts tomuch the same thing. An NVOC bill of ladingis not just a piece of paper: like a cheque it hasbeen invested by the law with magical powers.It represents the goods, it is evidence of acontract between you and the shipper; it alsocarries your logo and with it a message thatyou are liable to the holder for anything whichhappens to the goods. That is an awful lot ofyour company goodwill to give to someoneelse in a distant country.
If you give an agent blank bills, you haveonly his word that he will only use them in yourjoint service. But what happens if he goesagainst his word? What happens if one day heencounters problems with another NVOC in,say, Australia or the USA and cannot get anymore bills from them and decides to issueyour bills of lading instead? The first you mayknow of it will be some time later when aclaims recovery company starts writing nastyletters demanding compensation for somecargo which arrived damaged in Alice Springsor Albuquerque. Even worse, the agent maypop round to his local printers to get somemore copies run off, perfect in every particularexcept that you have no knowledge of it. Sittingin Birmingham or Bradford or Basingstoke, youcan have no idea what is happening in officesin Bombay, Busan or Buenos Aires. Yet thoseguys are doing things in your name.
Even if the use of your bills is restricted toyour joint service, you are picking up theresponsibility which rightly belongs to the
Sending blank bills of lading?
■ All bill of lading forms should be clearlyoverprinted to show whether they are intendedas originals or non-negotiable copies. Theoriginals, in sets of three, must also be printedwith serial numbers, and the agent must beasked to submit monthly reports of the billsissued. Any unused originals from the sets ofthree, and any spoilt sets, must be cancelledand returned to you with the reports.■ A senior member of staff should be giventhe task of monitoring the traffic, the returns andthe relationship with the agent. Actions shouldbe taken as soon as problems arise, not left torun for a few weeks or months “to see how itworks out”. If there are any difficulties in gettingmonthly reports no new batches of blanksshould be sent out until the reports are up-to-date and any outstanding problems resolved.■ There must be a clear contractualagreement with the partner company settingout the arrangements and the use to whichyour bills can be put.■ And finally (but, actually before you do anyof this) you must check with your liabilityinsurers to see if they will cover the increasedrisk of someone else issuing your bills, andpay the additional premium they will (verylikely) want.
Sending blank bills of lading is rather like giving your cheque book to someone
else and saying “we have agreed that you will only draw cheques on my
account for expenses incurred on my behalf, and then not more than £50 at a
time”. By Andrew Trasler, London
Blank bills canequate to blankcheques.
TT Club can assist with partneragreements.
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Vertical Tandem Lifting (VTL)of containers
be required to be taken into account at alltimes. This was quoted in kN. The result inrespect of a 1AAA container (9'6'' high, 40' box)would be that with two boxes being lifted andafter taking account of the tare weight of theboxes and the wind load factor, the permissiblecargo load would be no more than 11 tonnes.
A further note drafted by the working groupstated that the certification process fortwistlocks should use a safety factor of at leastfour based upon the ultimate strength of thematerial. The working group also considered anearlier amendment to the Standard, which hasjust completed its ISO procedure and will bepublished shortly.
This sets down for the first time ISOstandards regarding twistlocks, latchlocks,lashing rods and stacking pieces. They are tobe published as four Annexes to the Standard.However, the working group decided that thereference in both the twistlock annex and thelatchlock annex to only being used to lift emptycontainers should be changed and thatlatchlocks should only be used in lifting if thebearing surface was not less than 800 mm2.This would eliminate the single sided latchlockhaving only 600 mm2 bearing surface whichtests have shown has a greatly reduced tensileforce capability.
All of these changes were agreed by SubCommittee 1 (with a few improvements to thewording used) and, finally, by the fullCommittee. The ISO position now goes forvoting by national standards bodies and it doesnot represent the final position and membersshould bear that in mind. The InternationalCargo Handling Co-ordination Association’s(ICHCA) International Safety Panel was askedby TC 104 to develop a complementarypackage that terminals, shipping companiesand enforcement agencies should be able toaccept as a safe, sound and authoritative guideto the operational aspects of VTL. In this wayVTL may be introduced in a safe way. ICHCAwill seek consultation with the containerhandling industry on the practicalities of theoperational guidelines.
under tensile, racking and compression forces.In addition, a thorough test/researchprogramme relating to twistlocks and,separately, corner castings in assemblies withtwistlocks had been carried out in the summerby a US Government facility for theOccupational Safety and Health Administration(OSHA) and those results were also available.
The results showed that twistlocks had atensile force capability in excess of the cornercastings, which in turn had a capability far inexcess of the design load specified in ISOStandard 1161. By basing VTL limits upon thedesign load of the top corner castings in 1161it was clear that the integrity of the containersand the twistlocks would be fully maintained.Two further controls were built in.
Firstly, that the number of boxes should belimited to three and, secondly, that an arbitrarywind force factor was established which would
At a recent meeting of Technical Committee(TC) 104, the working group of ISO Standard3874 dealing with handling and securing ofcontainers, consideration was given to VTLbecoming a new work item (agreed by allparties) and to decide how to deal with thisaspect of container handling. An original draftamendment to the Standard, to include a newparagraph 6.2.5, said that series one freightcontainers can be used in VTL operationsprovided that the equipment used to link theboxes together is certified under ILO Convention152. If the text as proposed had been adopted,there would have been no limit to the numbersof boxes that might be lifted in this way, nor anyreference to the loaded/unloaded state.
The working group at its previous Aprilmeeting in Paris had commissioned a technicalreport on the engineering aspects of thecapabilities of corner castings and twistlocks
By Mike Compton, Director, PSO
Mike Compton isalso Chairman of theICHCA InternationalSafety Panel
new high-speed trains. Arrangements weremade to borrow the gun. But when the gun wasfired, the engineers stood shocked as thechicken hurtled out of the barrel, crashed intothe shatterproof shield, smashed it intosmithereens, crashed through the controlconsole, snapped the engineer’s backrest intwo, and embedded itself in the back wall ofthe cabin.
Horrified, the British engineers sent NASAthe disastrous results of the experiment, alongwith the designs of the windshield, andbegged the US scientists for suggestions.
NASA’s response was just one sentence:“Thaw the chicken.”
Amendment
■ Marking, Labelling and Placarding - thefollowing changes are included in chapter five:- the word SALVAGE must be marked on thepackage as well as on the dangerous goodsnote- IBCs of more than 450 litres must be markedand labelled on two opposing sides.- all labels have been identified with a codenumber corresponding to the class and, whereappropriate, sub division.- all specified subsidiary labels must nowinclude the class number and for class 5 thedivision number.- a new class 7 label is included for fissilematerials.- Segregation - chapter 7.2 includes a numberof diagrams to assist understanding ofsegregation arrangements for CTUs.
Amendment 30 has a long transitionalperiod attached to it. In fact, both the presentCode and the new one will remain viable for thewhole of 2001 and the new provisions will notcome fully into force until 1 January 2002.
Electronic VersionVersion 5 takes Amendment 30 into accountand is now available from IMO. Both single userand network versions of the software areavailable starting at £295 plus VAT. ContactIMO’s electronic sales department for detailson +44 20 7463 4137 or www.imo.org
■ Training - chapter 1.3 outlines a programmefor training those involved in consigning andhandling DO for sea transport. This isspecifically stated as not being a mandatoryrequirement.■ Samples - part 2.04 allows samples to betransported under the Code’s provisions. TheProper Shipping Name must be supplementedby the word SAMPLE.■ Flammable Liquids - the sub divisions 3.1,3.2 and 3.3 based upon flashpoint have beenremoved and any sub division is now basedentirely on packing group criteria.■ Containment - chapter 3.2 allows somerelaxation in the use of IBCs. Chapter 4.1 nowincludes a formula to determine the maximumdegree of filling allowed for containers forliquids. Chapter 4.1 and 6.6 introduces theconcept of large packagings- these are packagings consisting of an outerpackaging containing articles or innerpackagings having a capacity of between 400 kg or 450 litres up to 3000 litres. Theprovisions for the construction of portable tanksin chapters 4.2 and 6.7 are now based upon theOrange Book provisions. However, existing IMOtype tanks can continue to be used until 2010.■ Solid Bulk Materials Possessing ChemicalHazards - apart from a reference in the index, allinformation relating to their transport has beendeleted from the Code.
IMDG CODE
Scientists at NASA have developed a gun builtspecifically to launch dead chickens at thewindshields of airliners, military jets and thespace shuttle, all of which suffer travelling
It takes a rocket scientist
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Amendment 30 is now live and in itstransition period. It comes into force on 1 January 2002. The main technicalchanges in Amendment 30 are as follows -
30
collisions with airborne fowl, to test thestrength of the windshields.
British engineers heard about the gun andwere eager to test it on the windshield of their
The topic of the dissertation for the Award in 2000 was to arrange the shipmentof some project cargo from the entrant’s home country to another country thatis roughly half way around the world.
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the consignment must be separated to enablethe shipment to be processed economically. Atthe same time the aspects of importance to theprincipal must be noted when choosing thecarrier (speed or cost effectiveness). Byselecting two carriers, aircraft and ship, boththe time frame and financial aspect can bemaintained at an acceptable level. Thedissertation also deals with the documents tobe processed along the transport chain whichare required to ensure that the shipment runssmoothly. In addition to the normal transportprocedures, account is to be taken of thespecial handling needed for the dangerousgoods.Place of departure: Ludwigsburg, GermanyDestination: Melbourne, AustraliaDelivery terms: Delivered duty paid
The inland destination was chosen as themachine is used in the chemical industry,which is mainly in the Melbourne area inAustralia.
Two options are available to ship to theoverseas destination: ocean and air-freight. The consignment has to be split as the spareparts will not be finished on time. The machineand chemicals for the test runs, which can beready on time, are sent by sea. The spares willbe sent on by air at a later date so that theconsignment reaches its destination completeand on time. The consignor is to be madeaware of this by fax.
Attention must be drawn to the following toensure that the two parts of the consignmentare carried without any hitches.
Conventional or container loading is possible.As the frequency at which container ships sailis significantly higher than that of conventionalcargo vessels, container loading isrecommended.
The machine is packed in a wooden case. As the materials for the test runs are dangerousgoods, special features must be observed whenpacking.
First of all the hazard class, UN number andpacking group must be determined for each ofthe dangerous goods. This is done using theIMDG Code.
The packaging for the individual substancesmust be UN tested. For the nitrocellulosesolution either the carton must be tested as theouter packaging or the individual cans. For theglycidaldehyde either the carton is to be testedas the outer packaging or the individual sprays.The types of packaging permitted for class 3dangerous goods are explained in appendix 3of the IMDG Code.
As all the substances mentioned are class 3dangerous goods and there is no ban oncombined cargo within this class (see appendix4 of the IMDG Code for separation regulations),all hazardous substances can be packed in awooden case for simplicity’s sake to prevent anysmall packages from going astray.
A Sirex certificate is needed for this case tocomply with Australian quarantine regulationsregarding the use of wood as a packaging.Testing to UN guidelines is not applicable asthe case is only considered as a repackaging/loading aid.
The spares were delayed by two weeks due toproduction problems and could not be shippedwith the machine and the chemicals. There wasa time penalty applicable if the entire cargo wasnot on site in good time for the commissioningof the machine.
All candidates were asked to decide howbest to ship all sections of the project cargobearing in mind the transport options availableand the fact that a time penalty (financialpenalty) was part of the contract.
The winner was Heike Hurst of Danzas inAppenweier, Germany who wrote an excellentdissertation based on shipping the goods fromGermany to Melbourne in Australia.
A precis of the winning paper is set out below.
The following dissertation relates to all theprocesses involved in handling a shipment toAustralia. The goods being shipped are amachine and chemicals, classed as dangerousgoods. Because the various components of theshipment were to be finished at different times,
Young International Freight Forwarder of the Year 2000
The cargo was a pipe-winding machine. This cargo was principally in three parts: the machine itself – a sensitive piece ofequipment that had to be kept upright, andwas packed in a case of a size such that itwould not go into a container, neither wouldit go through the cargo door of an aeroplanespares for the machine, and chemicals(dangerous goods) to test the machine afterinstallation.
under Commercial Code 8.33 special drawingrights for damage during on-carriage, liabilityunder bill of lading or Visby rules 2 SDRs/kgor 667.67 SDRs/unit).
Spare parts will be sent by airfreightbecause of the time factor. The cost of theairfreight is low by comparison to the penaltythat could be imposed. These calculations aresent to the shipper and approved before thegoods are airfreighted.
The load must be adequately secured within thecase so that none of the individualconsignments can be damaged. The consign-ment will be handed over to a shipping agent inHamburg for it to look after stuffing the goods.Because of its size, the machine cannot beloaded flush with the edges of a flat container.Attention should be paid when stowing as towhether the machine can be loaded jutting outon one side or whether it has to be fixedcentrally on the container on account of internallocalised loading.
Because of its width, the machine willprobably be stowed relatively further up on deckdue to the “missing batches” which may occur.As, depending upon stowage categories, thedangerous goods must be partially loaded ondeck it is possible to pack the case on the flatcontainer. Insurance allows deck loading. Whenloading on deck, care must be taken to ensurethe packaging is secure and weather-proof asthe consignment faces between four and fiveweeks sailing time and is exposed to extremechanges in weather. It is recommended that thedangerous goods in the cartons are also packedin oiled paper to prevent water damage.
Export documents for the machine:Export declarationTwo copies of the commercial invoice inEnglish; this must not be certified but dulysigned. The original commercial invoice musthave a handwritten signature.
Packing declaration (on FCL consignmentsthis is prepared in the hinterland by theconsignor/loader whilst for LCL consignmentsthis document is drawn up at the port by thestowage firm).
Packing listSirex certificateCertificates of origin are not required
Bills of lading must not be certified; bills oflading to order are permitted - a notify addressis required.
Importing into Australia is relaxed to a largeextent; there are import quotas for certaingoods. There are no restrictions on importingmachines into Australia. Should an importlicence or approval for the importation of thesegoods be necessary, these documents wouldhave to be dealt with by the buyer in advanceof the purchase contract.
Packing regulations for exports to Australiaare strict and the regulations must becomplied with.
Every kind of wooden packaging (both innerand outer) is subject to inspection by thequarantine authorities at the time ofimportation and in the event of an attack byinsects being discovered, it can be fumigatedor rejected at the cost of the importer. It istherefore recommended to treat the woodagainst Sirex wasps (Sirex or other wood-boring insects) in Germany and attach arelavent Sirex certificate to the exportdocuments.
The wooden packaging provisions are alsoimportant when loading in containers. Careshould be taken to ensure that the wood usedto fasten the packages in the container(wedges, slats, etc) has been treated by thesemethods.
Insurance/liabilityDoor-to door insurance with full cover (WPA)is recommended for this transport. Thepremiums are geared to the value of the goodsand risk.
When properly packed, the insurance[company] is liable for partial and total loss,damage, etc. Any damage which may occurmust be reported to the goods in transit insurerwhich for its part will seek recourse (liability
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Heike (right) being introduced by Chris Gillespie (President of FIATA) to Princess Margriet of the Netherlands following the opening ceremony of the FIATA World Congress in Rotterdam.
ConclusionThis dissertation deals with the completeprocessing of a shipment to Australia. A theoretical concept of the whole processmust first be developed when planning theshipment. Things such as loadingpossibilities, pre-determined deadlines,handling of dangerous goods, specialcharacteristics of the goods, etc, must beclarified during this planning process. The information gleaned determines the nextcourse of action. The smooth running of thewhole project should always be the centraltheme when planning the shipment.Consideration should always be giventheoretically to whether the individual stepsand precautions to be taken will mergetogether without any problems and nodifficulties can come to light. This relates toboth the practical side of the shipment suchas loading, stowing, etc and the theoreticalaspect which is responsible for thedocuments being processed smoothly. In this respect consideration must be givenabove all to the customs documents so as toavoid any problems during export andimport. A start can be made on the practicalhandling of the shipment once the theoreticalconcept has been defined. A schedule isrecommended to take account of on-carriage, transshipment and journey time sothat all parts of the consignment arrive at theirdestination at the same time.
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Much has been said in the press latelyabout the danger to small vessels – andeven large ones - created by floatingcontainers. However, the risk of hitting acontainer, statistically speaking, is notthat great. Research reveals that thenumber of containers lost overboard onthe high seas each year is just a tinypercentage of those transported, and ofthose that do go overboard, most mustsink within a short period of time.
hold a box on the surface until the cargobecomes waterlogged. In rough weatherconditions containers tend to be smashed upby wave action. The average side wall of acontainer is made of mild steel just 1.3mmthick and with up to 20 tonnes of cargo movingaround inside they soon lose their structuralintegrity and sink. In calmer seas this processmay take longer.
Should an accident happen in a harbourarea, the harbour authority would be expectedto issue a wreck removal order as standardprocedure. Similarly, the removal of boxes isan integral part of standard wreck removalprogrammes instigated by the appropriatemaritime authority.
It is true that reefer boxes and tankcontainers, due to their inherent buoyancy,create a greater threat when lost over the side.However, because of their high value(US$25,000 – US$70,000) it is a far moreviable proposition to build in tracking devicesand recover them. In addition, because of their
buoyancy they are more likely to be visible onradar and to the observant watch.
Given the relatively small number of boxeslost over the side each year, most of which willdisappear without incident, the threat toshipping is statistically small. The Clubsuspects that the container is being heldresponsible for many incidents that it has notcaused. There are many hazards floatingaround in the oceans from fallen trees andother material carried to the sea by rivers, tosleeping whales, a problem known to seafarersfor generations.
George Fawcett, the Club’s containerclaims specialist, is somewhat sceptical ofclaims that relatively minor damage to smallvessels has been caused by floatingcontainers:
“Any collision with a container that is lyingdead in the water is likely to do seriousdamage to a lightly built vessel, especially ifthe impact involves a corner casting or cornerpost.”
A hazard to shipping? Warning device ideas welcomed
ContainersOverboard!
To put the problem in perspective, the top20 carriers control vessels with a totalcontainer slot capacity of 3.7m TEU (CIYearbook 2001) and these lines representsomething approaching 60% of the total worldcontainer fleet, currently around 13 millioncontainers. Not all of these units are moving atthe same time, but some 5 – 6 millioncontainers are often on the move at one time.In any year there could be a total movement ofsome 48 million containers.
The Club insures 15 of the top 20 containerlines for their container losses along with anumber of other lines. By extrapolation ofinformation from its own insurance statistics,the Club calculates that the total number oflosses on the high seas, over the side, isprobably less than 2000 boxes per annum.That means that less than 0.005% of thecontainers shipped each year, end up in theocean – or one in 17,500. Put another way thisis one container in the capacity of three largecontainer ships.
Most dry cargo containers are steel boxesweighing between two tonnes (20ft) and fourtonnes (40ft) and are constructed to beweather-proof not watertight. If empty they sinkquickly due to water ingress. If full, they mayfloat for a while as air trapped in the cargo may
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In defence of the shipping industry, Georgestates that no one is uncaring or unwilling toimprove the safety of containers at sea but theissue is one of perspective and cost basedupon the statistics.“Millions of dollars are spent each yearensuring ship safety and consistent operationsbut when ships hit severe storms and heavyseas, some losses may occur. Together withthe UK P&I Club, we recently produced a pairof ‘awareness’ videos intended to help thoseinvolved in container transport including thosewho load containers, often many hundreds ofmiles from the ocean.”
The Club believes that the benefit ofcontainerisation to world trade and populationfar outweighs the risk of hitting a container atsea. George Fawcett again:
“Virtually all manufactured goods carried atsea are containerised and clearly containerdistribution is a major contributor to globaltrade patterns and the low cost oftransportation benefits us all.”
No complacency in the ship design field“Although container transport is actually verysafe in terms of total numbers, the industry isnot complacent and supports all initiatives thathelp reduce losses at sea or preventaccidents.”
This will take some time as any changes incurrent practice would come at a cost and maynot bring the benefits sought. If carriers were toact independently they may face a competitivedisadvantage.
Given the highly competitive nature ofinternational business any changes to
regulations have to be agreed at an internationallevel to be meaningful. Amongst the changesbeing mooted are improvements to lashingsystems, on-deck cell guides and changes intonnage measurement. George believes thatthe potential for improving the safe workingload of lashing and securing systems islimited:
“There has been constant improvement for30 years and there is only so much further thetechnology can advance. Much of the recentdevelopment is related to improving the safetyof the working environment for stevedores, thusreducing the need to work on top of everincreasing container stacks.”
The debate regarding on-deck cell guidesand open hatches is on going. Several majorlines pioneered the concept in large vessels butsignificantly the latest vessels have been builtfor conventional deck stowage. Nevertheless,the concept is not regarded as a failure and stillhas supporters at the highest levels. Certainly,operational experience has shown that this typeof ship is less likely to lose containers over theside.
Germanischer Lloyd executive boardmember Hans Payer and the former Nedlloydnaval architect Ernst Vossnack are amongstthose who are proposing changes in tonnagemeasurement which would give navalarchitects more freedom to design bettervessels.
There are some people that would like to seehigher freeboards with more boxes carriedbelow deck and with greater use of on-deck cellguides. However, any owner building such aship today would find himself with a white
whilst working around port and terminal areas,but they have also shown themselves to be farmore versatile.
The Club likes to ensure that its employeesare trained early when it comes to safety, sopictured is Andrew Webster’s (our man inDubai) one year old son, showing that thejackets are also particularly useful when itcomes to tracking wandering children!
The recent introduction of the Club’s very ownhigh visibility waistcoats has proved to be verypopular. Not only have the jackets been wornby Members for statutory protection and safety
High visibilitychildren
elephant. Current tonnage measurement rulesmean that such a ship would be paying muchhigher port and canal dues than a conventionalcontainer ship.
Changes in tonnage measurement rules arerequired and this is not likely to happenovernight. With the on-going consolidationamongst the deep-sea lines maybe dialoguebetween carriers, leading ports and canalauthorities could come to some sort ofcompromise when it comes to new designs?
The Club is working with the trackingspecialist TRI-MEX International, and is lookingat the possibility of fitting tracking devices tocontainers so that they can be more easilylocated and recovered – or avoided.Technology cost considerations mean that onlyreefer or tank containers are likely to be so fittedin the foreseeable future but as these boxes arethe most likely to remain afloat, such adevelopment would be very positive. To fit allcontainers would currently be uneconomic, butthere again, technology costs are falling year byyear.
It has been suggested that containers couldbe fitted with EPIRB systems and this ispossible but as George Fawcett points out:Who is going to monitor eight millioncontainers?Which frequencies would be used?Who is going to recover containers ininternational waters?
Whilst there is little likelihood of containersoverboard causing damage, if readers have anysimple ideas to “show” the container prior to itssinking please send them to the Editor.
Since 1995, TTMS (Gulf) has been involved indeveloping and servicing TT Club business inthe Middle East and the Indian subcontinentregion. We have been involved with severalnational forwarding associations and haveassisted in the writing of standard tradingconditions and training programmes designedto educate the next generation of forwardersand logistics companies.
This type of involvement reinforces the TTClub’s commitment to a regional strategy ofbringing services to its Members. Travel in theregion is extensive as face-to-face contact isthe best way of ensuring Member satisfaction- all members of the team in Dubai travel toMembers in the region. Dubai provides anideal central location for the region as flightconnections are excellent and commu-nications are first class.
In the course of our operations in Dubai wehandle some 450 claims from 90 Members ina typical year and the team is happy that theyare consistently asked to give papers atconferences and provide in-house seminarsfor Members both on loss prevention andcoverage issues.
Over the last year, Dubai itself has seen anenormous growth in the internet "industry" andindeed we now have a business park/free zonededicated to this - Internet City. The Dubaiports and customs has embraced the newinternet age wholeheartedly and is seeking to‘web enable’ almost all of its systems within avery short time. It intends to provide a fastermore efficient platform for its tradingcommunity - we will undoubtedly see many ofthe other regional administrations taking asimilar route very soon.
The growth in technology has not beenforgotten in the logistics sector, with many TTClub Members in the region investing heavilyin new hi-tech applications to allow integration
TTMS(Gulf)
10 HOUSE-TO-HOUSE
MUTUAL
LEGAL NEWS AND VIEWS
CO
NC
ERN Continuing to extend the reach of the Supreme
Court’s 1994 Sky Reefer decision, a federaldistrict court in New York has recently held thatif an ocean carrier’s local agent is a“subcontractor” within the meaning of a“Himalaya Clause” in an ocean bill of lading,the local agent is entitled to the benefit of aforeign forum selection clause in that bill oflading. As a result, claims against a carrier’slocal subcontractor must be brought in theforum identified in the bill of lading, not wherethe local subcontractor can be found or evenwhere the damage allegedly occurred.
In the New York case, plaintiff shippedgoods to New York with an Italian NVOCC. Theocean carrier issued a waybill to the NVOCCshowing the NVOCC’s New York agent(“Challenger”) as the consignee. The NVOCCissued a bill of lading to the shipper showingthe shipper’s buyer as the ultimate consignee.The shipper instructed Challenger not torelease the shipment to the ultimate consigneeuntil the shipper authorised its release.Challenger in turn allegedly instructed thecarrier’s agent in New Jersey not to release theshipment. The shipment was neverthelessreleased to the ultimate consignee. Theshipper was allegedly never paid. Theconsignee filed for bankruptcy. Thereupon, theshipper filed suit against Challenger in NewYork for the value of the goods, contending itsuffered the loss because Challenger did notfollow the shipper’s instructions.
Challenger in turn filed a third-partycomplaint against the ocean carrier and thecarrier’s agent for indemnity in the event it washeld liable to the shipper. The waybill calledfor disputes to be resolved in China.
The carrier and the carrier’s agent filed amotion to enforce the Chinese forum selectionclause. As to the New Jersey agent, thecontention was made that the carrier hadsubcontracted its duty to make proper delivery
to the agent. The “Himalaya Clause” in the billof lading extended the benefits available to thecarrier under the waybill to the carrier’ssubcontractors. Accordingly, the benefit of theChinese forum selection clause ran in favour ofthe New Jersey agent as well as the carrier.
Challenger contended that the third partyclaim was one for indemnity and that anindemnity claim did not “arise under” the billof lading. As to the New Jersey agent, theshipper’s agent also contended that the foreignforum selection clause was not an“exemption”, “defence”, or “limitation” underthe Himalaya Clause.
Judge Koeltl ruled in favour of the carrierand the carrier’s agent. He held that in thesecircumstances Challenger’s third party claimarose under the bill of lading and further heldthat the Chinese forum selection clause was a“defence” under the Himalaya Clause that ranin favour of the carrier’s agent. LPR, SRL v.Challenger Overseas, LLC, 2000 US DistLEXIS 9746 (7 July 2000). Judge Koeltl alsoenforced a provision in the NVOCC bill oflading calling for disputes between the shipperand the NVOCC, including its agent,Challenger, to be heard in Italy. As a result,plaintiff’s claims were dismissed. Healy &Baillie represented the carrier and the carrier’sagent in that litigation.
Since there is one contract of carriage, aplaintiff should be allowed only one recoveryfrom all parties performing that contract ofcarriage. Allowing suit in one forum against allrelevant parties serves this purpose. As statedby Judge Koeltl, if the carrier’s subcontractorsdid not have the benefit of the forum selectionclause, it “would have the untenable result thatdifferent claims arising out of the very sameagreement to transport goods would belitigated in different parts of the world.”By LeRoy Lambert of Healy & Baillie LLP, New York
Carrier’s agent is entitled to benefit of foreignforum selection clause in ocean bill of lading
By Andrew Webster
corners to 12kph irrespective of the height ofthe box.
Even in straight-line travel the later modelshave been fitted with speed limiters thatreduce the operating speed in accordancewith the travelling height of the box:
11HOUSE-TO-HOUSE
with their customers and provide a seamlesslogistics service.
The Club is fortunate to have a good nameand reputation in the region, largely due to theservice we provide to the Members. With adedicated claims handling team in Dubaibacked by expertise in London we can solve
The straddle carrier was damaged as a result oftoppling over whilst rounding a corner at acontainer receiving area. It was reported thatthe straddle was not carrying a container andthe spreader was estimated to have been in themid height position.
A preliminary survey of the straddle carriershowed no obvious abnormal mechanicalfaults with the tyres or the steering boxes andassociated linkages. The speed of the straddleat the time of the incident was unknown,although it is likely that the incident was a resultof the straddle carrier travelling too fast for thecorner.
The estimated cost to replace the unit, whichhas been written off, is approximately US$2.8million.
With an empty straddle carrier speed is themajor culprit in rollovers of this type. When thestraddle has a box attached, the centre of gravityis somewhat lower than an empty straddle(irrespective of the position of the spreader).
The Club advises that in general the older (1 over 2) models travelling with a box lessthan five metres high on the spreader should belimited to 20kph in a straight line.
If the box is greater than five metres high onthe spreader then the speed, in straight-linetravel, should be reduced to 15kph and on
Speedand emptystraddlecarriersA claim from an incident involving a straddle carrier, that occurredlast year at a Member’s terminal, highlights the perils of drivingstraddle carriers too fast, especially when running empty.
Members’ problems for them quickly andefficiently.
Building on past success, TTMS is seekingto expand the Membership in India and Egyptby means of small forwarders’ schemes,giving the smaller operator access to theClub’s services in the most cost-effective way.
We shall be using the TTXpress platform toprovide documentation for these schemes sothat administration and time spent waiting arereduced to a minimum. Iran is also a relativelynew market for the Club and we are currentlyexploring the best way to deliver the TTproduct range.
The Club recommends that when corneringwith an empty straddle carrier, speed shouldbe limited to below 12kph at all times.
At trailer height – max speed 25kph.
At 1 over 1 box height – max speed 22kph.
At 1 over 2 box height – max speed 17kph.
At 1 over 3 box height – max speed 12kph.
12 HOUSE-TO-HOUSE
Carry out a thorough check on all newcustomers and business partners, including asmuch of the following as possible:1) Date of foundation.2) Parent, subsidiary and affiliate companies.3) Licence details with renewal dates.4) Details, and a copy, of the company’sliability insurance policy.5) Membership of professional associations ororganisations.6) List of other clients and any letters ofrecommendation.7) Directors’ names and their personalexperience and that of senior staff.8) Details of company’s trading conditions,bill of lading, etc.
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Continued from page one 9) Claims record (last 5 years).If necessary, contact a Club office orcorrespondent to request assistance with thesechecks.
Be constantly alert to offers of new businessthat come from a remote and strange source.In this case, the named South Korean forwarderhad only a few business contacts with theShanghai forwarder during 1995, but had nosuch contacts during the past few years.
When you have only limited informationabout your business partner, avoid issuingyour own bill of lading, but instead, sign asagent on your partner’s house bill of lading.
If you do not have control over the entirevoyage/transit, then do not issue documentsthat evidence such total control.
In the previous edition of House to House weasked whether any ports and terminalscovered by the Club would be willing to assistICHCA’s International Safety Panel in settingup international benchmarking by providingdetails of accidents for the year 1999.
Little data has been received by PSO inLondon, which means that this work may notgo ahead. The Club feels that suchbenchmarking would be of value to theindustry and we ask once more if you havesuch data, would you assist ICHCA in thistask.
The details needed are repeated below forease of reference:
The raw data supplied will be treated intotal confidence by the PSO and used solelyfor global benchmarking. The final data willonly be supplied to those organisations thattake part by supplying the initial data.
In developing the scheme, the Panel hastried to make data collection as simple aspossible. For example, for containeroperations, the two pieces of informationwhich need to be supplied are:
a) Measure of personal injury - the number ofpersons absent from work for more than oneday as a result of accidents at work. b) Measure of work carried out - the totalnumber of TEUs, or units for Ro-Ro operation,handled in the same period.
Ideally these figures should be suppliedseparately for each geographic location, whereoperations are carried out at more than onelocation. The way it is intended to work is thateach response will be calculated as the numberof injuries per 100,000 containers/unitshandled. All berths are treated as being thesame. The total number of responses will beadded up and an overall rate calculated. Thisbecomes the benchmark which will be sent toall those who participate.All responses should be sent to Mike Compton, Director, PSO, 64 -78 Kingsway, London WC2B 6AH, UKfax + 44 20 7404 6806 or e-mail: [email protected].
Responses should be sent to the PSO as soon as possible.
Benchmarking of accidents for ports and terminals
