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The world is getting smaller but trade is expanding. Perhaps these perceptions are linked. When the Hong Kong branch held their seminar on cargo care on 8 October they were well placed as custodians of the world's leading dry cargo port to assess the changes in the way cargo is traded and handled.
In the keynote address, Captain Eddie Liaw, ship management general manager of OOCL explained how his company was providing shipping services door to door; and how with electronic tracking and communications, the oceans become host to the mobile warehouse known as container shipping.
David Fielder, vice president, legal and claims and insurance of Panalpina, China, set the scene by looking at the bill of lading, explaining that for many container shipments the bills were no longer seen on board. He recognised that ships were frequently asked to load cargo under clean bills of lading to charterers' instructions even though the cargo was discoloured or damaged before loading on board. Some banks are instructed to pay only on the presentation of clean bills and under these circumstances the carrier cannot rely on a letter of indemnity: a proper agreement must be reached with the charterer.
It was refreshing to hear 'Visha' K S Vishwanath, cargo manager, French Marine International Underwriters Ltd, explain the practical risk reduction measures taken by a responsible cargo underwriter prior to shipment. He divides cargo into 14 different risk categories from the 'agri' family to container goods explaining how sensible loss prevention measures start with the cargo insurance policy. This paper will be published in full in a future issue of Seaways.
William H M Ng, managing director of William Shipping and Management Services Ltd, brought years of practical experience to the seminar by explaining all the potential problems which can occur if cargo is booked and forwarded by unqualified personnel. There are many factors to consider, such as the physical dimension of the cargo lifting points for loading/ discharge, special requirements on voyage and suitable handling arrangements in the delivery port. The forwarder has to know the correct documentary requirements of both the exporting and importing countries and be aware of transit times for perishable cargoes. The agent then has to ensure that the cargo is available at the right berth at the right time for shipment and that it is properly marked and packaged. A close link with stevedores makes all the difference. Mr Ng advocates the use of checklists and sees the main role of an effective agent as answering the question, 'what are the important facts all the parties need to know in time?'
Reacting to cargo claims, the P& I clubs have found themselves in the front line. Although they do not insure the cargo, the cargo insurer will be seeking to claim against the carrier if it can be shown that not enough care was taken during the voyage. P & I clubs have been stung by massive claims for steel products on the grounds that they deteriorated during the voyage. The answer to this problem was to introduce pre-shipment surveys after which the claims were substantially reduced. Matthew Moor, claims executive of the North of England P & I Association, Hong Kong, elaborated on the role of P&I clubs and advised delegates to read The Mariners Guide to Marine Insurance just published by the Institute.
The second part of the seminar examined the shipowner's responsibility for cargo care during the voyage; a thoughtful and refreshing reminder of good practice by Ang William, manager insurance and claims, China Navigation. Michael Mann, marine surveyor with Perfect Lambert, covered the subject of stowage and ventilation problems, pointing out the nature and scale of damage that can occur when insufficient dunnage is used or when the ship's crew do not ventilate the cargo properly.
Mike Wall, principal, Kiwi Marine Consultants, showed through a dynamic Powerpoint presentation how bad stowage could lead to major claims but also irrecoverable losses to the shipowner where, for example, the vessel is taken out of service for repairs and the cargo is contaminated. Having described in detail the problems and costs, Mike Wall put forward helpful solutions - pre-charter surveys are a good investment, use reputable owners, supervise stowage, insure with a reputable P&I Club and ensure crew members are competent and interested.
Philip Ashby, managing director, Ashby Receivers Ltd, Hong Kong, outlined cases where recent claims had arisen. They involved shipbrokers who fixed over the telephone, bad stowage, insurers underwriting risks they had not foreseen, forwarders accepting cargo, using delivery agents they cannot trust, surveyors allowing claims at inflated levels and suspect trade finance. Mr Ashby pointed out the central role of banks and the wise precautions they should take to avoid fraud.
'What is the best way to proceed if there is a claim?' This was the question answered by Edgar Wong, claims executive, Through Transport Services Asia. His informative paper looked at assessing the damage, serving a claims notice, obtaining and preserving evidence, mitigating loss, claiming against the right party and protecting time. He wisely observed that mitigation is the key action after an incident.
The summing up was given by John Martin, director, Richards Hogg Lindley. He highlighted the complexity of issues involved when transporting other peoples' goods. He provided a comprehensive insight into the subject of general average before concluding that cargo movements need to be well managed at all times, and to do this competent, well qualified personnel were needed who understood not only their own role in the transport chain but also have an understanding about others roles so that co-operation becomes the key to success.
Congratulations to the Hong Kong branch committee for organising this event. Cleverly put together by practitioners for practitioners, it provided a rare overview of the care needed from when the cargo is first booked until the time it arrives.
Julian Parker FNI
Seaways December 1999