International News – January 2021

Earlier this month, the National Transportation Safety Board (NTSB) released its Safer Seas Digest 2019, a report that gathers the most important lessons learned from marine accident investigations.

Details from 30 maritime tragedies resulted in a list of observations/deficiencies/recommendations to mariners.

Organizational Oversight

In over one-third of all accidents involved insufficient organizational oversight.

Fatigue

Fatigue continues as a leading primary or contributory cause. Companies should include fatigue management procedures in their safety management systems and ensure compliance with applicable work/rest requirements.

Meanwhile, a watch alarm, if used as intended, is an effective tool that can help ensure that a crewmember remains awake and vigilant while on duty. However, a watch alarm is not a substitute for the management and mitigation of fatigue.

Master/Pilot Exchange

The master/pilot exchange is a critical component of bridge resource management ensuring clear communication and a shared mental model of tasks.

Proper Navigation

The safety of a vessel while underway depends on awareness of the vessel’s position and adherence to a voyage plan. Good seamanship requires correlating information from all means of navigation, including satellite, radar, and visual aids to navigation. Crewmembers navigating the vessel should be familiar with electronic charting systems, radars, GPS, and other systems.

Dynamic Risk Assessment

Owners and operators should conduct a risk assessment prior to vessel operations to determine potential hazards and mitigate dangers. Once a voyage or operation has commenced, unplanned changes to work plans can move operations incrementally toward states of higher risk. Dynamic risk assessment requires that work stop when new hazards are identified, the situation is evaluated, and action is taken to control the added risks.

Proper Lookout

Non-navigational routines should never interfere with the primary task of a watch stander or a bridge team member to maintain a proper lookout. Should performance of another task or duty be necessary, an extra lookout should be posted.

Early Communication Prior to and During Emergency Situations

This can be an effective measure in averting accidents or reducing injuries and loss of life in the event of an accident.

Heavy Weather Conditions

Owners and operators should develop voyage plans, including identification of safe harbors, that assess prevailing weather conditions and anticipate changes along the intended route. Regardless of requirements, planning and preparation before a voyage is critically important, including the identification of safe harbors along the route and adherence to operational limits.

Seafloor Hazards in Undersea Operations

During undersea operations such as dredging of liftboat operations, seafloor conditions, including the presences of pipelines, cables, or can holes; bottom changes due to storm passages; proximity to major rivers; and soil composition can pose significant hazards to safe operations. All available information such as charts and sounding data should be used.

Effective Hull and Structural Component Inspection & Maintenance

To protect vessels, their crews, and the environment, it is good practice for owners to conduct regular oversight and maintenance of hulls and structural components of a vessel, including between drydock periods.

Watertight Integrity and Subdivision

Maintaining watertight integrity to include securing hatches and doors and maintaining the material condition of hull plating, is a fundamental principal of safe operation. Within the hull, watertight bulkheads are designed to prevent progressive flooding when portions of the hull are compromised in a collision or other contact. Cutting holes in these bulkheads for ease of access to adjacent spaces defeats the designed intent of the bulkheads. Vessel owners, operators, and crews should ensure the integrity of their vessels’ watertight subdivision is maintained.

Fire Protection During Hot Work

It is critical to evaluate work areas for fire hazards to ensure that adequate protection is in place. Crewmembers involved in hot work should be trained to establish a fire watch, ensure adequate and appropriate fire protection, identify possible hazards, and take action to remove or mitigate these potential risks to the vessel and crew.

Securing Ventilation and Openings During a Fire

When using fixed firefighting systems or throwable fire extinguishers, crewmembers should secure ventilation (fans and vent registers/louvers) and close all openings, such as engine room doors and windows, to ensure the maximum effectiveness of the extinguishing agent.

Remote Fuel Oil and Lube Oil Cut-Off Valves

Following the initiation of an engine room fire, it is imperative to remove the source of available fuel to the fire. Remote cut-off valves allow the crew to stop the flow of fuel and lube oil to a fire without having to enter an inaccessible or otherwise unsafe engine room.

Labeling of Alarms

Accurate labeling of alarms pertaining to critical machinery and essential systems is crucial so that vessel operators understand the nature of problems or failures.

I recall hearing years ago from the head of the NTSB that their recommendations do not have to be technically or operationally feasible? Check out the digest at: https://go.usa.gov/x7a7G

In related news, The NTSB called for major safety improvements to small passenger vessels after the investigation of a 2019 California dive boat fire that killed 34.

The 75-foot recreational diving vessel, Conception, with 33 passengers and six crew aboard, was anchored in Platts Harbor, off Santa Cruz Island, when it caught fire in the early morning of Sept. 2. All 33 passengers and one crewmember died of smoke inhalation after they were trapped in the berthing area while a fire raged on the deck above. Both exits from the berthing area led to the fire- and smoke-filled enclosed area above.

The NTSB called for all vessels similar to the Conception with overnight accommodations to be required to have interconnected smoke detectors in all passenger areas. It also recommended that a secondary means of escape lead into a different space than the primary exit in case a single fire blocks both escape paths.

It also called on the U.S. Coast Guard to develop and implement an inspection program to verify that roving patrols are conducted – as required – for the safety of sleeping passengers and crew. NTSB investigators found the absence of a required roving patrol on the Conception likely delayed the initial detection of the fire, allowed for its growth, precluded firefighting and evacuation efforts, and directly led to the high number of fatalities in the accident.

The recommendations to the Coast Guard would apply to vessels, like the Conception, that are under 100 gross tons and have overnight accommodations for 49 or fewer passengers that fall under Subchapter T of federal marine regulations. The NTSB’s recommendation on interconnected smoke detectors, meaning when one smoke detector alarms the remaining detectors also alarm, also would apply to larger Subchapter K vessels.

The NTSB also reiterated its call for small passenger vessels to be required to implement a safety management system to improve the safety culture of vessel owners and operators.

A synopsis of the investigation’s findings is available online at https://go.usa.gov/x7a7G

There is news from yet another major container liner service provider, MSC USA. According to their High Value Commodity Mis-Declaration Fee, any cargo with a commercial value exceeding $250,000 must be declared to the carrier or its agent at the time of booking; being expressly agreed that such information shall not be considered as a declaration of value and the documentation so issued will not be deemed ad valorem unless this has been formally agreed by MSC and the corresponding surcharge paid by the shipper.

Failure to inform MSC will result in the application of the High Value Commodity Mis-Declaration Fee equal to 10% of the actual commercial value of the cargo but not exceeding $25.000.

Moreover, the High Venture Product Fee remains in place for cargo that is high-value, sensitive or requires special care. Rates for this fee are applied as follows:

• High-value pharmaceutical goods: the surcharge is calculated based on the cargo value per containers.
• Cargo value per container between $200,000 ($500,000 for cargo originating from India) and $5M, the rate is of 0.075%.
• Cargo value per container between $5M and $10M, the rate is of 0.085%.
• Cargo value per container between $10M and $15M, the rate is of 0.1%
• Basic non-pharmaceutical goods: when cargo value is less than $500,000 but requests either specific monitoring or equipment, the surcharge is equal to $45 per container for port to port move and $50 per container for other moves.
• High-value non-pharmaceutical goods: when cargo value per container exceeds $500,000, the surcharge is equal to 0.20% of the cargo value.

MSC‘s Terms and Conditions have been updated and can be found by accessing Section 3.24 of T&C United States (USA).

It is worth considering why these fees are being applied if, in fact, the ocean carrier’s liability does not change. The only fee that seems relevant is the one for specific monitoring or equipment mentioned under the 2nd bullet. 

There has been a far amount of discussion around bringing manufacturing back or closer to the U.S. This was brought into focus with the difficulty in obtaining PPE (Personal Protective Equipment) from China during the Covid-19 crisis. Last month’s issue of Inbound logistics had a relevant viewpoint.

Prior to deploying a reshore or nearshore supply strategy here are some points to consider:

• Map your supply chain to ensure that any shift in manufacturing does not get disrupted by upstream dependencies. Perhaps a supplier of a critical component is based in China. Or, this exercise can point out that a Chinese Tier 1, 2 or 3 supplier has a facility closer to your market.
• Do a cost analysis factoring in the expense of establishing a new factory and how that will affect the cost of parts and materials.
• A near supplier does not necessarily guarantee real savings or is it risk free. Consider Mexico with its proximity and ratification of the United States-Mexico-Canada Agreement (USMCA). Mexico is not inexpensive compared to Asian countries and is not without its own set of risk (cargo theft being one).
• Understand the availability of skilled labor. With high levels of unemployment, the labor pool may be expansive but most dislocated workers are from service industries and not the manufacturing sector

Separating political rhetoric from real world reality, China will remain manufacturing dominance for the foreseeable future. Supply chains should be built for sustainable competitive advantage and not short term, knee-jerk reaction to an event.

Ocean carriers are looking to extend transit times in a bid to improve reliability and cut costs. They are starting to add more buffer into schedules to mitigate the impact of chronic global port congestion. For example, Hapag-Lloyd said recently it was adding seven days to the westbound schedule of its AS2 Asia to South America east coast schedule for 13 weeks – one of two loops it operates on the trade in cooperation with Maersk, Hamburg Süd, MSC and ONE.

It said the schedule sliding was necessary due to the severe congestion from “the challenging operational conditions in Asia” defending this strategy as cost management and “a matter of survival”.

The carrier does not expect to see many void sailings in the first quarter of next year but warned of vessel slidings; in an average week it carries about 240,000-250,000 teu (twenty-foot equivalent units) but are getting bookings for 400,000 teu.

Container schedule reliability slumped to a record low of 50.1% in November, according to a SeaIntelligence analysis. It warned shippers that with widespread port congestion, and with carriers not letting off capacity until at least the Chinese New Year”, that schedule reliability was unlikely to improve until the second quarter 2021.

There has been reports of severe congestion at some major U.S. ports. From an insurer’s perspective this creates obvious accumulation concerns but other issues may be in play namely, some diminution of cargo safety as loaded containers are sent to satellite yards, ones with less physical and procedural security measures and drayage companies removing multiple containers back-to-back-to back and parking them unsecured on nearly streets or open lots/yards rather than delivering them straight to consignees.

The information for much of the content was taken from several public sources that to the best of the undersigned’s knowledge is accurate. The views expressed in this document should be regarded as the opinion of the undersigned and not ones made in his capacity as an employee of Chubb.

Anyone wanting additional information on any of the topics covered should contact the above signers.