Large vessels and less hands on deck have significantly affected risk mitigation related to ocean freight with wider implications for the parties involved in the relevant supply chain, a master mariner has told FTW.
Malcolm Hartwell, director and head of transport at Norton Rose Fulbright, said that “huge container ships bring increased liabilities.
“The bigger the container ship, the bigger the fire risk as most of the containers are completely inaccessible by the ever-shrinking crew on board.” According to Hartwell, some post-Panamax vessels can carry as many as 22 000 containers yet they only need a crew of 13 as per international legislation. “In the past ships were much smaller and you had a crew of 40 to 50 people. It was easier to get to fires. These days hatches are so big if the container is in the middle you can’t get anywhere near it.”
Apart from the apparent risk of sailing a massive vessel that’s stacked to the rafters and understaffed to boot, lines are rarely expanding their crew because of cost. “Why should they have to?” Hartwell argued. “If they comply they feel there’s no reason to. In the end it’s a numbers game and if they can save on extra expense they will.” It means that shipowners, shippers, receivers, freight forwarders, container operators and their liability insurers are all affected by the increased exposure and possible consequences of unforeseen events.
“All parties in the logistics chain must re-assess their exposure to claims for damage to ships and other cargo. Even goods that are not defined as hazardous by the International Maritime Dangerous Goods Code.” Hartwell also stressed that, whereas in the past there used to be a higher frequency of incidents at sea, such as goods toppling over, these occurrences had been limited. “We used to have ten small claims a year. Now we have one big claim every two years.”
One such claim is ongoing and involves the APL Austria, a Liberian-owned vessel that started billowing smoke in February 2017 south of Cape St Francis, resulting in it being pulled into the Port of Ngqura. Well over a year later, claims surrounding the Austria fire have reached $30m. “Cargo on the Austria was initially found to be innocuous but it turned out to be hypochlorite and the ship was on fire for several days.” But it’s another on-board fire at sea, and one that took place in 2012, around which Hartwell has built a solid case in favour of comprehensive ocean freight cover.
“In 2012 a disastrous fire took place on the MSC Flaminia, a 300m-long modern vessel capable of carrying 7000 containers. It was bound from New Orleans to Antwerp and an explosion and subsequent fire took place in a container of divinylbenzene which had spontaneously combusted.” In the resulting blaze, three crew lost their lives, thousands of containers were destroyed, and the Germanowned ship sustained serious damage. Naturally, MSC bore the brunt of initial blame but the line also looked into the extent of shared responsibility.
“MSC turned around arguing that the container operator and the owner of the cargo must also pay. It was interesting because what they were essentially saying was that because the other parties knew what cargo it was, they should’ve done something about.”
In the litigation that ensued, and in keeping with various international carriage regimes, in particular the HagueVisby Rules, it was found that MSC was not at fault because they had adhered to the relevant rules in providing a seaworthy ship. Hartwell explained that in passing judgement against various shippers and container operators, “the court said because of the volume and speed and due to containers arriving at port to be loaded on board a ship, there was no way that a ship owner such as MSC could keep track of everything that was on a vessel.”
He added that although insurance was still widely regarded as a grudge purchase, and although smaller parties without the necessary capital saved on expense through minimised insurance, the necessity of comprehensive cover was expected to find wider traction in the market.
“Bigger and better may be cheaper in the long run but bigger vessels have created their own hazards.”
Bigger and better may be cheaper in the long run but bigger vessels have created their own hazards. – Malcolm Hartwell
