International News – November 2019

Three recent attacks on ships underway in the eastbound lane of the Singapore Strait have resulted in a warning from ReCAAP ISC.

• On September 30 at about 2314 hrs., the 43,721gross ton (gt) bulk carrier Transpacific was boarded by five perpetrators armed with knives. The alarm was raised, and the crew searched the accommodation area but the perpetrators had already escaped. The crew was safe and nothing was stolen.
• On October 18 at about 2324 hrs., 5 men were seen in the engine room of the 159,806 gt VLCC Hirado. The master raised the alarm, and the perpetrators escaped. Nothing was taken.
• On October 19 at about 0100 hrs., the 90,086 gt bulk carrier, Nord Steel was underway when the duty oiler saw five perpetrators armed with gun and jungle knife on deck. They threatened him and stole engine spares (including piston rings, oil rings, valve seats, valve spindles, crankpin bearing shell etc.) and escaped through the steering room.

Although there is no substantiating evidence, it seems likely that the same group was involved as there is some commonality- the incidents took place around the same location and all within a 2-hour window. ReCAAP advises all ships to exercise enhanced vigilance and that law enforcement agencies steps up surveillance.

At this same time, there has been a drop in piracy within that region. There were 54 incidents of piracy and armed robbery against ships reported in Asia during January-September 2019 compared to 64 incidents during that same period last year.

This is a headline that will likely alarm insurance companies as well as importers and exporters No liability for shipowner when clause "howsoever arising" applies to deck cargo.

Steamship Mutual has reported on the case of the ELIN, in which the English High Court decided that a shipowner had no liability for loss or damage to deck cargo where the bill of lading covering the cargo stated that the cargo was carried on deck and incorporated a clause excluding liability for such cargo “howsoever arising.”

A project cargo shipment consisting of 201 packages was shipped from Thailand to Algeria onboard the ship. A bill of lading was issued for the cargo, which included in the description of the cargo: “(of which 70 pckgs as per attached list loaded on deck at shipper’s and/or consignee’s and/or receiver’s risk; the carrier and/or Owners and/or Vessel being not responsible for loss or damage howsoever arising).”

Standard wording on the other side of the bill of lading included: “(c) The Carrier shall in no case be responsible for loss of or damage to the cargo, howsoever arising prior to loading into or after discharge from the Vessel or while the cargo is in the charge of another Carrier, nor in respect of deck cargo or live animals.”

Some of the cargo was lost or damaged when the vessel encountered heavy weather on the voyage. The cargo interests alleged that cargo was lost or damaged because the Owner failed to exercise due diligence to make the ship seaworthy at the commencement of the voyage, or to properly and carefully load, stow, carry and care for the cargo.

Stephen Hofmeyer QC, sitting as a Judge in the High Court, decided that the Owners had no liability for loss or damage to the cargo that had been stowed on deck. He commented that the carriage of goods on the deck of a ship was inherently risky, so that deck cargo was treated differently at law. Goods carried on deck and stated to be carried on deck in the bill of lading were not “goods” within the meaning of the Hague or Hague-Visby Rules. A shipowner could contract to ship such goods on his own terms, and not be bound by the Rules.

In English law clear words are necessary if a party to a contract wants to exclude or limit their liability, and such words were read restrictively, against the party that seeks to rely on them. In this case the judge considered that the words on the bill of lading were clear and unambiguous, and he commented that “words of exemption which are wider in effect than “howsoever caused” are difficult to imagine, and, over the last 100 years, they have become “the classic phrase” whereby to exclude liability for negligence and unseaworthiness.”

Lloyd’s List Intelligence is hosting an interactive forum in an effort to drive a collaborative effort to address the issues associated with the shipment of dangerous goods. Specifically it will examine options available to deal with undeclared or mis-declared shipments, poor packing, container stuffing and cargo securement.

The event will take place in London on November 14. Further details and registration can be found at: https://maritimeintelligence.informa.com/events/2019-forums/gfa

In related news, the International Union of Marine Insurers (IUMI) is calling for substantive improvement in fire protection on containerships and urging countries to press for regulatory changes at the IMO (International Maritime Organization).

This year alone there have been five (5) shipboard blazes involving the Yantian Express, APL Vancouver, Grande America, ER Kobe and KMTC Hong Kong.

Citing undeclared and mis-declared cargo as the root cause of these incidents, IUMI, is calling for firefighting systems arranged to segregate the ship into fire compartments so the fire can be contained.

Additionally, they recommend fixed monitors and improved fire detection systems.

The approach has to be multi-faceted and incorporate procedural controls. Also, retrofitting vessel with new firefighting systems is going to be costly and with IMO 2020 already upon us may not be financially feasible. Moreover, some possible remedies include:

• Sharing the “Watchdog” algorithm used by Hapag-Lloyd throughout the industry
• Looking toward the air cargo sector on how they deal with dangerous goods- namely the U.S. TSA “Known Shipper” program which was designed to put the onus on intermediaries (freight forwarders, 3PLs et al) to vet shippers or the IATA DG Autocheck initiative

We also wonder if ocean carriers can publicize shippers that have mis-declared cargo so that they cannot simply bounce from one to another

The governor of Rio de Janiero recently announced a plan to close access to communities to combat cargo theft. The initiative scheduled for early 2020 is part of the “Present Security” project that will focus on access roads and corridors where stolen cargo enters communities.

The program will rely on helicopters and high speed motorcycles to stem loss of goods that amounts to R$ 5 billion annually. Nearly concurrent to this announcement, heavily armed gunmen raided the cargo terminal at the Viracopos Airport, 60 miles from Sao Paulo and stole money from an armored truck. This attack occurred 3 months after the theft of $30 million worth of gold from the international airport in Sao Paulo.

Mediterranean Shipping Company (MSC) is joining a growing list of ocean carriers that have pledged not to use the Northern Sea Route (NSR) for shipping between Europe and Asia basing its decision on environmental concerns and is part of the company’s broader strategic approach to sustainability.

The shipping lines’ decision to shun the NSR comes against the backdrop of shrinking Arctic sea ice that has opened the Northern Sea Route to commercial shipping opportunities. In September 2018, Maersk sent one of its new Baltic feeder vessels, the Venta Maersk, on a one-off passage via the NSR on its voyage from Asia to Northern Europe. Despite the success Maersk underscored that the passage was a singular trial designed to gain operational experience in to region and to test vessel systems.

At a recent working meeting of the Northern Sea Route Public Council, Russia’s state-run nuclear energy company Rosatom said it expects shipping along the Northern Sea Route to increase more than four-fold by 2024. Rosatom estimates that the route will require more than $11 billion in investments to make it safe and viable.

MSC’s plan to avoid the NSR follows similar positions held by CMA CGM and Hapag-Lloyd, who have both recently announced that they will not use the route in the foreseeable future.