“Carefully To Carry”

A compilation of reports from the Association’s Advisory CommitteeOn Cargo Claims

Is Cargo Carriage Important ?

• It is the shipowners raison d’etre It is the shipowners raison d’etre – DamageDamage

= Loss of reputation= Increases costs of administration

Handling problem Handling claim Handling irate customers

= Increases insurance premiums= Increases loss of profit

Has Cargo Carriage Changed ?

• Cargoes more sophisticated requiring more care• End buyers more discerning• Speed and time of delivery more important than speed of

paying claim• Cargo protection• Profit margins a lot tighter

Damage in many trades is now just not acceptableDamage in many trades is now just not acceptable

The P&I Industry still pays out on cargo claims in the regionThe P&I Industry still pays out on cargo claims in the region

370$m a year$m a year

Even though damage not acceptableEven though damage not acceptable

31$m a month31$m a month

8$m a week8$m a weekOver 1$m day !!Over 1$m day !!

Owners ignore cargo damage at their perilOwners ignore cargo damage at their peril

How Important is Cargo Carriage to the InsurerHow Important is Cargo Carriage to the Insurer

Number of Large Liability Claims By Risk Type

Crew24%

Non Crew9%

FFO9%

Collision5%

Pollution5%

GA2%

Other5%

Cargo41%

1987 - 2001

Value of Large Liability Claims By Risk Type

Cargo27%

Crew15%

Non Crew8%

FFO14%

Collision10%

Pollution17%

GA2%

Other7%

1987 - 2001

As you can see Cargo is very much a P&I Club’sAs you can see Cargo is very much a P&I Club’sRaison d’etre as wellRaison d’etre as well

What type of cargo gets damagedWhat type of cargo gets damaged

Main Cargoes Damaged1987 - 2001

0 2 4 6 8 10 12 14

Containers

Dry Bulk

Steel

Bagged Bulk

Reefer - Bulk

General

Chemical - Bulk

Oil Products

Machinery

Veg Oil

Crude Oil

Timber

Number %

65$m65$m

79$m79$m

110$m110$m

82$m82$m

55$m55$m

13$m13$m

41$m41$m

13$m13$m

18$m18$m

57$m57$m

28$m28$m

30$m30$m

What type of Damage

0

5

10

15

20

25

Wet Damage Physical Contamination Shortage Heat/FrostDamge

LossOverboard

Theft Sinking

Number % Claims Paid ($m) % Total

%

Most frequent Cause of Large Cargo Claims

Number Claims Claims Paid ($m)

Bad Stowage 283 75.76Hatchcover Leakage 236 57.38Bad Handling 189 33.2Condensation 107 20.68Damage Prior Loading 83 20.44Lashing Failure 80 17.85Inadequate tank/hold Clean 79 23.2Pre Shipment Quality 78 16.83

Fire 68 58.5Valve Pipe Fail 62 12.29

Grounding 50 32.07Fraud 49 9.79

Carried Wrong Temp 49 10.07Shell Plate Fail 44 34.98Shore Terminal 41 11.05Ship Machinery Fail 39 14.33

Sank 38 26.86Pipe Fail 36 6.99

Collison 29 8.41Leaking DB'S 28 4.9

Misdelivery 27 3.88E;ectrical 21 2.74

ME Fail 20 8.93Poor Tally/Paperwork 18 3.29

Inadequate tank/hold coating 17 5.24Blocked Bilges 14 2.53

Bulkhead Fail 13 5.59Poor packing 11 1.32

Leaking Vents 11 9.3Ship Unsuitable 10 1.9

Could better knowledge reduce this 218$m outgoing

The Club thinks soThe Club thinks so

Today we are re launching Carefully to CarryToday we are re launching Carefully to Carry

The UK Club handles around 7,000 cargo claims a yearThe UK Club is in a unique position to source information on what goes wrongThe UK Club has the facility with its analysis tools to focusThe UK Club has the expertise available in the form of an Advisory Committee of expertsThe UK Club can offer a source of practical, well founded and up to date advice

With this advice hopefully we can help Members reduce their exposure to cargo damage

The publication originates from theThe publication originates from the Carefully to Carry CommitteeCarefully to Carry Committee

Carefully To Carry

• Carefully to Carry CommitteeCarefully to Carry Committee– Formed 1961– Body of Expertise

• Commodities• Chemicals• Steel• Oil • Container Carriage • Minerals• Claims Handling • Court tested experience

– Articles on Current problems• 15 Issues (Last 1999)

– Written by independent experts– Scrutinized by peers

New Publication

• 41 Years of articles brought up to date41 Years of articles brought up to date• One easy to use publicationOne easy to use publication

– Available for Insurance Managers– Available for ship board use

• Trade FocusedTrade Focused– Bulk Cargoes - Solid– Bulk Cargoes - Liquid– Containers– Refrigerated Cargoes– Miscellaneous

• Under DevelopmentUnder Development– Electronic format

• CD• Web based

Topics Covered

• Measurement of bulk cargoesMeasurement of bulk cargoes• Shortage Claims

• Karnal BuntKarnal Bunt• Trade Restrictions

• Direct reduced ironDirect reduced iron• Regular heating problems-39

million tonnes produced a year

• Oil samples and samplingOil samples and sampling• Regular requests for how

• Calcium hypochloriteCalcium hypochlorite• 1970’s problem then 1990’s

• Radioactive cargoesRadioactive cargoes• CoalCoal

• Fire

Carriage instructions for reeferCarriage instructions for reefercargoescargoes

More sophisticated carriage, less sophisticated advice from shippers

• Fishmeal cargoesFishmeal cargoes– Fire

• CoffeeCoffee– Condensation

• Refined sugarRefined sugar– Caking

• Timber deck cargoesTimber deck cargoes– Loss overboard still regular

occurrence• Moisture migrationMoisture migration

– Mould

The publication will be a store of knowledge which can be drawn down upon by Members.Which will

assist in the reduction of damage

THEREBY REDUCING

Is Cargo Carriage Important ?Is Cargo Carriage Important ?• It is the shipowners raison d’etre It is the shipowners raison d’etre

– DamageDamage= Loss of reputation= Increases costs of administration

Handling problem Handling claim Handling irate customers

= Increases insurance premiums= Increases loss of profit

“Carefully To Carry”

A compilation of reports from the Association’s Advisory CommitteeOn Cargo Claims