TYPES OF CARGOES- MAJOR CLASSIFICATIONS, PROPERTIES, PACKING METHODS, HANDLING, MODES OF TRANSPORT BY SEA, TYPES OF LOSSES& CASE STUDIES

CHAPTER I INTRODUCTION
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination. Marine insurance is the indemnity for the loss of cargo or damage to ships during the shipment. The risks that marine insurance covers are fire, seizures, wars, accidents or causalities which take place over the sea. The winds and waves are not included as risks in the marine insurance. The Indian Marine Insurance Act, 1963 is imbibed from the Marine Insurance Act, 1906. Though the Marine Insurance Act is deep in its insurance coverage, it does not provide for losses that occur while the ship is sailing the waters. This has led to the introduction of another insurance called the Marine Cargo Insurance, which provides for losses to cargo while the ship is sailing the waters. This is very beneficial to oil tankers and heavy cargo ships.

Types of Marine Insurance Since Marine Insurance is very vast, it provides for various types of insurance as per the need, specification and requirement. They are: Hull Insurance This insurance covers for both vessel and its apparatus such as fuel, tools, furniture, machinery etc.

Freight Insurance - This insurance usually covers for the loss of freight. If the goods are safely shifted to the destination port, the owner of goods will have to pay the freight charges but if the ship faces any damages and losses, the shipping company will be under loss. Hence this insurance becomes a necessity to the owner company.

Cargo Insurance- This insurance covers the personal goods of the passengers and crew of the ship. It also covers the goods that are transported. Liability Insurance This is the insurance which is utilized when the insured suffers losses due to liability to third party. This liability may be caused due to risks such as collision of ships or any other similar causality that may take place in voyage. Freight Transport, Maritime Transport and the Global Economy: Few transport systems have been more impacted by globalization than freight transportation. Paradoxically, in a field dominated by passengers, freight remains fairly unnoticed by the general public, albeit manufacturers and retailers are keenly aware of the benefits derived from efficient distribution. In fact, the profit margin of many retailers and manufacturers is directly dependent on efficient distribution strategies encompassing a wide array of global suppliers. As such, in the last decades, international trade has systematically expanded at a rate faster than economic growth, an outcome of an international division of the production and massive accumulation of new manufacturing activities in developing countries. Maritime transportation is at the core of global freight distribution in terms of its unparallel physical capacity and ability to carry freight over long distances and at low costs. Aside from these well known characteristics, the maritime industry has substantially changed in recent decades. From an industry that was always international in its character, maritime transportation has become a truly global entity with routes that spans across hemispheres, forwarding raw materials, parts and finished goods. In fact, it is one of the most globalized industries around.

CHAPTER II TYPES OF CARGOES AND MAJOR CLASSIFICATIONS& PROPERTIES

Global Commodity Chains and Logistical Strategies Global production, transportation and distribution require the setting of freight management strategies. As such, logistics concern all the activities required for goods to be made available on markets, including purchase, order processing, inventory management and transportation among the most relevant. The expansion of production in the global realm induced transport systems to adapt to a new environment in freight distribution where the reliable and timely deliveries can be as important as costs. Logistics has consequently taken an increasingly important role in the global economy, supporting a wide array of commodity chains (Hesse and Rodrigue, 2004, 2006). This is the setting in which maritime transportation is increasingly embedded. At the core of this relationship, Global Commodity Chains (GCC) can be considered as functionally integrated networks of production, trade and service activities that cover all the stages in a supply chain, from the transformation of raw materials, through intermediate manufacturing stages, to the delivery of a finished good to a market (e.g. Gereffi, 1999). The development of global transportation and telecommunication networks, information technologies, the liberalization of trade and multinational corporations are all factors that have substantially impacted GCC (Dicken, 2003). In such a new environment, the precepts of international freight transportation are being redefined, both for bulk and for break-bulk cargo. The former comprises homogeneous materials without packaging (ores, coal, grain, raw sugar, cement, crude oil and oil products, etc.) usually for a single consignee and destination, while the latter, often known as general cargo, consists of an almost infinite variety of freight, usually in small consignments for numerous consignees and 3 packaged in a variety of bags, bales, boxes, crates and drums of diverse shape and size. However, containers account for the majority of the break-bulk cargo being carried.

CARGO - DRY BULK

-ferrous ores, ferroalloys, pig iron, scrap metal, etc.)

stic granules & pellets, resin powder, synthetic fiber, etc.)

peanuts, raw or refined sugar, seeds, starches, etc.) gravel, copper, iron, (ores in pellet form) , salt, etc.) As in the case of liquid bulk cargo claims, many dry bulk claims are really paper shortages, caused by different measurement techniques at the loading and discharge ports, natural wastage of the cargo, unavoidable losses and other factors for which the carrier should not be liable. As with liquid bulk cargoes the use of proper operating procedures and the maintenance of careful records by the ship are the basis of successful claims handling. The following procedures are recommended: 1. Prior to loading, a check should be made to ensure that all cargo spaces are clean and free of previous cargo. If possible, a certificate should be obtained from the shipper confirming that the cargo spaces are suitable. 2. Draught surveys should be arranged prior to and immediately after loading to assess the quantity of cargo that is aboard. 3. The loading procedures, and if possible information about the method of weighing the cargo at the load port should be recorded, and a note should be made of any opportunities that might exist for cargo to be lost between the ship and the shore measurement facility. 4. The weight recorded on the bill of lading is normally that provided by the shippers. In these circumstances, the bills of lading should indicate that the measurement is neither given nor warranted by the carrier, by words such as "shippers' weight" or "said to weigh" and "weight, quality and contents unknown". If there is a significant discrepancy between the weights declared by the shipper and that ascertained from the draught survey, both figures should if possible be recorded on the bill of lading. As in the case of liquid cargoes, if a dispute develops with the shippers, the Club should be notified immediately. 5. A draught survey should be carried out on arrival at the discharge port and on completion of discharge to verify the quantity discharged.

6. If there is only one port of loading and one port of discharge, the hatch covers can be sealed, if necessary under customs supervision, and on arrival at discharge port the consignees and/or the customs invited to confirm that the seals are still in place. 7. Upon completion of discharge, all cargo spaces should be checked. If possible, a certificate should be obtained from the receivers or the supervising authority at the port confirming that the holds are empty of all cargo. 8. If any cargo cannot be discharged, the amount left on board should be quantified as accurately as possible by an independent surveyor. If these steps are carried out, and suitable records maintained, then in the absence of any casualty or actual loss of cargo during the voyage, the carrier should be in a good position to defend claims for shortages. Shortage Claims The Club should be notified as soon as a possible after either an allegation of shortage is made, or an alleged shortage of cargo is discovered. The Club will normally ask for the information derived from the loading and discharging procedures described in the preceding section, and it may be necessary to investigate cargo operations at any intermediate ports during the voyage. Further documents normally required include the original bill of lading and/or charter party, commercial invoice, claim note or other documentary evidence submitted by the claimant showing how the claim is calculated, and a subrogation certificate if the claim is pursued by cargo underwriters. Damage Claims If cargo damage occurs during a voyage or during discharge, the Club and its local correspondents should be notified immediately so that a surveyor can be instructed to inspect the cargo at the first available opportunity. Normally it is possible to arrange a joint survey with the consignees, so that allowances are agreed and inflated claims avoided. When a cargo problem first arises, the initial notification should contain as much information as possible, so that the Club can quickly make a preliminary evaluation of the seriousness and complexity of the claim and determine whether specialist surveyors or other experts should be instructed. Consignees may attempt to refuse delivery of cargo, particularly if the market for their cargo is declining, by alleging such extensive damage that it amounts to a total loss. These allegations are often unjustified, and a refusal to take delivery usually causes the Member serious operational problems. In such circumstances, the Club will attempt first to persuade the receivers to take delivery of the cargo and subsequently, if they have the evidence for it, to present a claim for damages. In some countries, the Courts will make an order to that effect, although security for the Member's potential cargo liability may also be demanded [For more on security see the section of the Claims Handling page of this website on

Guarantees]. If it is necessary to do so, the Club can try to negotiate a reasonable depreciation allowance, and on that basis persuade the receivers to take delivery. It is often worth negotiating with the cargo underwriter's surveyor, since his principals will usually wish to avoid payment of a total loss. If agreement cannot be reached with the receivers, and if the local Courts will not assist, the salvage market can be investigated to see whether alternative buyers can be found for the damaged cargo. It is important, in the case of a salvage sale arranged by the carrier, that the cargo interest's rejection of the cargo is absolutely clear. Unless it can clearly be shown that the consignee has abandoned his goods, the carrier risks liability in conversion if he arranges a salvage sale without the cargo owners express agreement. This difficulty arises, in particular, if the receivers show no interest either in formally rejecting the cargo or in collecting it. In such cases, it may be that their lack of interest results from the fact that the export or sale agreement has not been concluded, or has broken down, and others - who are not readily identifiable - may have an interest in the cargo. In any event, the carrier's remedy in these circumstances lies not in salvage sale but in attempts to arrange storage ashore, if possible under the authority of the local Court. Whether or not the cargo is damaged, the cargo interests should be held accountable for storage charges. If no-one seeks to collect the cargo, or if a risk of deterioration develops, or if the costs of storage after a certain time become disproportionately high, then attempts should be made to sell the cargo, again under Court authority. In cases of alleged cargo damage, the burden is normally on the carrier to show that due diligence has been exercised to make the vessel seaworthy at the commencement of the voyage, and to establish one or more grounds which constitute a defense to liability under the Hague or Hague-Visby rules. The following investigations will often be necessary and in serious cases the Club will instruct surveyors, experts and lawyers to assist: Any claim submitted by cargo interests for loss or damage to cargo should be passed immediately to the Club or its local correspondents in order that prompt investigations can be undertaken. The sooner the Club or the correspondents are notified, the more potential there is for the investigations that are necessary to deal with the claim to yield helpful information. 1. A review of the vessel's recent history, including such matters as classification surveys, ISM compliance, and maintenance programmes. 2. A review of previous voyages, to see whether there is a recurring problem or whether damage may be due to cargoes carried on earlier voyages. 3. Enquiries at the loading and intermediate ports to investigate the condition of the cargo on loading and during the voyage. 4. Statements may be required from ship's officers and other witnesses It is important that statements are only given to those

representing the Member's interests. Officers and crew should be instructed not to make comments to anyone representing cargo or other interests. Cargo surveyors and others not acting for the ship owner should not be allowed on board the vessel without the Owner's and Club's approval. If approval is given for surveyors representing either the cargo owners or the charterers to board the vessel, they should be accompanied by a surveyor representing the Owner. 5. The documents normally required will include: bills of lading and mates receipts; the charter party if any, and any written instructions from the shippers concerning carriage of the cargo; loading and discharge draft surveys, and relevant log extracts. 6. Previous difficulties experienced with the same kind of cargo, the shippers, the consignees or the ports involved may also need investigation. LIQUID BULK CARGOS ("WET" TRADES)

t juices, etc.) Loading and discharging procedures The two most commonly encountered kinds of claim concerning liquid bulk cargo are shortage and contamination claims. Remember that a formal figured claim may not be received from cargo interests for many months. The Club should be notified of any allegation or suggestion of a claim by cargo interests - typically following completion of discharge immediately it is made even if no formal claim is received at that time. Successful handling of claims depends to a large extent on the ship following a well planned operating procedure on loading and discharge and on the maintenance of careful records so that the evidence to deal with the claim is available even many months after the claim. In most jurisdictions time bars apply to exclude claims which are not made within a specific period. More details on this topic are contained in the section of this website under Time Limits. The following procedures are recommended to ensure that a proper record is made of the loading, carriage and discharge: 1. The ship should compile and retain a report on the condition of the vessels tanks prior to loading, including a record of the ullages in slop tanks. Once the ships officers are satisfied

about the cleanliness of the tanks, cargo interests and/or representatives of the terminal should be invited to inspect the tanks and confirm their acceptability in writing prior to the commencement of loading. 2. A loading/discharge programme should be planned in advance and agreed with cargo interests and the terminal staff. This should cover the order in which tanks are to be loaded/discharged, tank/pump/pipe work allocation and loading/discharge rates in order to minimize the stress on the vessel and the risk of cross-contamination of different grades of cargo. 3. An efficient system of communication should be established between the vessel and the terminal and the start-up/shut-down procedures for cargo operations agreed. A close watch should be maintained on weather conditions in order that cargo operations can be shut down in good time, and, if necessary, so that the vessel can depart from the terminal prior to the onset of adverse weather. A comprehensive ship/shore checklist will ensure that these details are given the appropriate attention and will provide evidence if needed that this is the case. 4. The sea valves and their seals should be checked in the presence of cargo/terminal representatives prior to loading and checked and sealed again after departure. 5. All operations undertaken during loading and discharge should be logged by the ship including details of all valve positions, changes in valve usage, pumping rates, manifold pressures and vessels draught and trim. 6. Ullage and temperature measurement of all the vessel's cargo tanks should be carried out in the presence of the terminal and cargo representatives upon completion of loading and immediately prior to discharge. The results should be carefully recorded and countersigned by cargo interests. 7. A calculation of the loaded quantity should be made, based upon the vessel's ullage and temperature figures, and the result compared with the shore figure to ensure that any difference falls within the vessel's experience factor. If it does not, a Note of Protest should be issued by the Master and an acknowledgement obtained from the shippers and/or charterers. Bills of lading should wherever possible be endorsed to show that the volume and weight measurements are not provided, ascertained or warranted by the carrier. If there is an unusual discrepancy between the shipper's figure and that disclosed by the vessel's loading ullages, every effort should be made to have the latter inserted in the bill of lading. At the very least, a Note of Protest should be drawn up by the Master to be attached to the bill of lading or passed to the shipper and any named consignee or notify party. Often in these

circumstances the shipper will be reluctant to agree any reservation regarding his loading figure. Contact the Club for legal advice in the event of any such dispute. 8. Samples should be taken from the top, middle and bottom of each of the vessel's cargo tanks in the presence of a representative of the terminal and cargo interests. Similar samples should be drawn prior to discharge. It is also useful whenever possible to obtain samples of cargo immediately prior to loading, including samples from a point as near to the ship's manifold as possible. All samples should be sealed, labeled and stored for possible future reference. This can obviously lead to a storage problem, particularly since the samples should he retained for at least 12 months. However, such evidence is essential for the defense of any contamination claims that might arise. Often samples are taken at the commencement of loading after a small quantity has been pumped, in order to check if any contamination is revealed. If contamination is present, the cause of this must be fully checked and eliminated before the Master allows loading to continue. In case of doubt the Master or Member should contact either the Club Managers London representatives, or the Clubs local correspondents for assistance. 9. When loading crude oil cargoes, dips should be taken of all the vessel's cargo tanks upon completion of loading to check for the presence of free water. If any free water is found, a Note of Protest should be issued and an acknowledgement obtained from the shippers/charterers. As an additional precaution, further dips should be taken on the following day, by which time the majority any water in suspension in the cargo will have separated out. 10. Samples should be taken from the vessel's bunker tanks upon completion of loading and prior to discharge. 11. During the voyage daily checks should be made of the cargo tank ullages and temperatures, and the results should be recorded. Constant checks should also be made on the inert gas pressures, and any marked drop in pressure in individual tanks investigated. Records should also be kept of the loading or discharge of any ballast or of any internal cargo transfers. 12. On completion of discharge all tanks, including empty ballast tanks, should be dipped and, where possible, visually inspected in the presence of a representative of the terminal or cargo interests, to ensure that no cargo remains on board. The terminal or cargo interests' representative should be requested to sign a dry tank certificate and only after this has been signed should shore hoses be disconnected. Using these procedures will establish a written record of the voyage which will be invaluable in reconstructing events when a claim is made.

Shortage Claims Many shortage claims are based on incorrect calculations. With a standard operating procedure and full records it should be possible in cases involving routine voyages to show that all the cargo loaded was discharged, and that the carrier is not responsible for differences between the shore loading and discharge figures. Claims for shortage are often based on a comparison of shore tank figures, but in most countries the carrier's liability only commences at the point where the cargo passes through the vessel's permanent manifold connections, and terminates when the cargo passes out through the manifold connections at the port of discharge. A comparison between the ships figures at loading and discharge, and not the terminals' figures, is necessary to determine if any loss has occurred onboard the vessel. To verify the quantities actually received on board and discharged from the vessel the following documents are usually required: A dry tank certificate reporting on the condition of the vessel's tanks prior to loading. A record of the quantity of material already in the slop tanks. An ullage report prepared on completion of loading. A statement of the vessel's draught on departure from the loading port. This may be contained in the ullage report, as in the example above. A statement of the vessel's draught on arrival at the port of discharge, which again may be contained in the ullage report. An ullage report prepared prior to the start of discharge operations. A dry tank certificate issued on completion of discharge, which should preferably have been signed by the consignees. The original bill of lading and charter party. Evidence of the cargo value, such as the commercial invoice 7 With many liquid cargoes, unpumpable residues will remain on board. Whilst it is important that the quantity of such residues should be checked, clear evidence to the effect that the residues are indeed unpumpable is essential if claims are to be avoided. Investigations may therefore be necessary to prove that the vessel's valves, lines and pumps are all in good order. A dry tank certificate confirming that all pumpable cargo has been discharged and any quantity remaining on board (ROB) is unpumpable, will normally be conclusive evidence, particularly if signed by a representative of the consignees. In many countries, courts will accept that the carrier is not liable for shortages of up to 0.5% of the quantity laden. It is generally acknowledged that ship owners should have the benefit of a percentage allowance, since the measurement of bulk liquids is not an exact science, and unavoidable loss will often occur during a voyage. To keep measurement inaccuracies to a minimum, standard

procedures should be adopted by the ship's crew when measuring cargo and calibrating equipment. If the routine documentation described above indicates a shortage which exceeds the usual allowance for the type of cargo and vessel in question, then additional investigations may be necessary, for example: A survey of the vessel's tanks to verify there was no leakage of cargo during the voyage. A check upon inter-tank transfers during the voyage. Accurate records should be maintained of all such transfers. A review of weather conditions during the voyage. Prolonged rolling and pitching during heavy weather can increase the rate of evaporation of cargo, and may result in the release of cargo from full tanks. A review of bunker records and a survey of cargo lines in order to rebut any allegation that cargo has been diverted from cargo tanks. Contamination Claims The most important evidence in the handling of contamination claims is that represented by cargo samples [see the section above entitled Loading and Discharge Procedures ]. Much of the documentation and evidence required for shortage claims is also necessary to contest contamination claims. In addition, the following documentation should be obtained: The vessels maintenance records, including details of previous cargoes, surveys and cleaning operations. A record of all cargo operations carried out on board the vessel during the relevant voyage, including pumping operations and inter-tank transfers.

BREAK BULK CARGO In shipping, break bulk cargo or general cargo is a term that covers a great variety of goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of cargo are often called general cargo ships. The term break bulk derives from the phrase breaking bulk the extraction of a portion of the cargo of a ship or the beginning of the unloading process from the ship's holds. These goods may be in shipping containers (bags, boxes, crates, drums, barrels). Unit loads of items secured to a pallet or skid are also used. A break-in-bulk point is a place where goods are transferred from one mode of transport to another, for example the docks where goods transfer from ship to truck. Break bulk was the most common form of cargo for most of the history of shipping. Since the late 1960s the volume of break bulk cargo has declined dramatically worldwide as

containerization has grown. Moving cargo on and off ship in containers is much more efficient, allowing ships to spend less time in port. Break bulk cargo also suffered from greater theft and damage. Although cargo of this sort can be delivered straight from a truck or train onto a ship the most common way is for the cargo to be delivered to the dock in advance of the arrival of the ship and for the cargo to be stored in warehouses. When the ship arrives the cargo is then taken from the warehouse to the quay and then lifted on board by either the ship's gear (derricks or cranes) or by the dockside cranes. The discharge of the ship is the reverse of the loading operation. Loading and discharging by break bulk is labour intensive. The cargo is brought to the quay next to the ship and then each individual item is lifted on board separately. Some items such as sacks or bags can be loaded in batches by using a sling or cargo net and others such as cartons can be loaded onto trays before being lifted on board. Once on board each item must be stowed separately. Before any loading takes place any signs of the previous cargo should be removed. The holds should be swept, washed if necessary and any damage to them repaired. Dunnage may be laid ready for the cargo or may just be put in bundles ready for the stevedores to lay out as the cargo is loaded. There are many sorts of break bulk cargo but amongst them are:

Bagged Cargo Should be stowed on double dunnage and kept clear of the ship's sides and bulkheads. Bags should be kept away from pillars and stanchions by covering with matting or waterproof paper. Baled Goods These should be stowed on single dunnage at least 50mm thick. The bales should be clean with all the bands intact. Stained or oily bales should be rejected. All fibres can absorb oil and are liable to spontaneous combustion as a result they should be kept clear of any new paintwork. Bales close to the deck head should be covered to prevent damage by dripping sweat. Barrels and Casks Wooden barrels should be stowed on their sides on "beds" of dunnage which keeps the middle of the side (the bilge) off the deck and they should be stowed with the bung at the top. To prevent movement wedges called quoins are put in on top of the "beds". Barrels should be stowed fore and aft and not athwart ships. Once the first tier has been loaded the next tier of

barrels fits into the hollows between the barrels, this is known as stowing "bilge and cant line" Corrugated Boxes Corrugated boxes should be stowed on a good layer of dunnage and kept clear of any moisture. Military and weather resistant grades of corrugated fiberboard are available. They should not be over stowed with anything other than similar boxes. They are frequently loaded on pallets; if so the slings that are used to load the cargo are frequently left on to facilitate discharge Cased Goods Wooden cases or crates should be stowed on double dunnage in the holds and single dunnage in the 'tween decks. Heavy cases should be given bottom stowage. The loading slings are often left on to aid discharge Drums Metal drums should be stowed on end with dunnage between tiers. Paper Reels These are generally stowed on their sides but care must be taken to make sure they are not crushed. Cars These are lifted on board and then secured using lashings. A great deal of care should be taken to make sure they do not get damaged. Vehicles must also be prepared by ensuring potentially hazardous liquids (gasoline, etc) have been removed. Steel Girders Any long heavy item should be stowed fore and aft. If they are stowed athwart ships they are liable to shift if the ship rolls heavily and pierce the side of the ship. Advantages and disadvantages The demise of break bulk did not start with containerization but with the advent of tankers and bulk carriers (see the history of tankers and bulk carriers) which did away with the transport of liquids in barrels and cargoes such as grain in sacks. All three use specialized ships and shore facilities to affect faster turnarounds with fewer personnel, however they do require large initial investments. Overall the demise of break bulk demonstrates that these newer systems are superior. In all, the new systems have reduced costs as well as spillage and turn round times, in the case of containerization, damage and pilfering as well. The advantage that break bulk does have is that there is no requirement for any shore facilities except a

wharf that the ship can tie up to; as a result there is still some requirement for this sort of ship. CONTAINERISED CARGO Stowage of cargo in the container Proper care should be taken to ensure that the container is in a sound condition; i.e. in structural good order, and clean. Residues from previous cargoes, particularly chemicals, should be removed to ensure that there are no prospects of contamination. The stows should be solid enough to remain firm throughout the period of carriage despite the movement of the ship, and thus the need to ensure that weight is evenly distributed. Great care should always be used when stuffing containers. Forklift trucks have in many cases caused considerable damage by piercing their container walls. Reefer cargoes Before receiving chilled or frozen goods the reefer container should be pre-cooled and generally clean and free from contaminating and tainting residues. Temperature recording equipment should be properly calibrated, in working order, and fitted with temperature recording charts which form the basis of establishing whether or not there has been a breakdown or interruption in the proper functioning of the reefer equipment. Shippers should be required to provide any special instructions as to the carrying temperatures. If no instructions are given, a protest should be noted in writing and the container carried in accordance with recommended practice. Pre-trip inspection Every refrigerated container should be fully inspected by the container operator for proper operation before every voyage. Generally this is done manually and using a check sheet, but modern micro-processor control systems are increasingly able to carry out many of the necessary checks automatically. Some types of check always require an individuals personal attendance, such as inspection of cables, etc. for signs of damage Handling of the containers (sea carriage) Careful lashing of containers, whether in ships converted for container carriage, ro-ro ships or cellular ships, is essential. Wherever possible, containers should be stowed with their doors adjacent or flush against each other. Those with valuable or easily pilferable cargo should be stowed in the least accessible parts of the hold or stowage plan with their doors welded closed if necessary. This type of stacking is also recommended when containers are left in inland depots or port compounds. Containers with valuable cargoes are safer stowed beneath and surrounded by other containers stuffed with less valuable cargoes. Seals The importance of a secure seal, and a record of the seal number during the various stages of carriage (from receipt of the container to delivery ultimate destination) cannot be over-

emphasised. There is no totally secure type of seal, but the bolt type is regarded as the best available. Seals should be of good quality and non-corrosive, and their number easily identifiable. Whether the container is stuffed by the carrier or received on his behalf already stuffed by the shipper, the carrier or his agents should make an immediate record of the numbers of any defective seals, and of any replacements, which should be fitted at the same time. Upon discharge, a thorough examination of every seal on each container should take place to check that they remain intact. If a valuable cargo is involved, the unloading or unpacking of the container should preferably be carried out in the presence of a customs officer or other person in authority. If, at any time during the period for which the carrier is responsible for the container, damage is noted to either the container, the seal, or the cargo stuffed inside, a survey should immediately be arranged with the assistance of the 12 Clubs local correspondents. If the survey requires the breaking of seals, then, upon completion of the inspection, care should be taken to ensure that the container is resealed and a record taken of the new seal number. Shipper stuffed containers Additional problems can be encountered when containers are delivered to the ship after they have been stuffed and sealed by the shipper. Operators and shippers in the container industry are sometimes the victims of sophisticated theft and fraud, and it is not unusual to find that containers are empty on discharge, despite an intact seal, or full of sand or rocks instead of the contractual cargo. In some countries, the carrier is absolutely liable for loss of cargo if the container seal shows any sign of interference. At the time of loading, the container and the seal should be checked to ensure that they are in good condition, and when facilities and/or time permits, the containers should be weighed and the weight checked against that declared by the shipper. If during loading there is reason to suspect that a container does not contain the cargo or quantity declared, it should be returned to the quay and a survey of the contents arranged. Bills of lading should always be endorsed to show that the shipper has sealed the container and that the carrier has had no opportunity to inspect the cargo and cannot guarantee its condition or contents. The following or similar words are generally sufficient: "Container received by the carrier stuffed and sealed by the shipper; said to contain (details of cargo); weight, condition, quality and contents unknown". Deck stowage of containers Because of their construction and design, sealed containers are better able than most other forms of packing to withstand the rigours of carriage by sea on deck. In many instances, therefore, it will not be a deviation or other breach of contract to carry containers on the deck

of purpose built or fitted vessels provided that the relevant bill(s) of lading expressly allow such stowage. (The Club should always be consulted, however, in order to ascertain whether or not cover is likely to be affected.) On the other hand, deck carriage on vessels which are not specially adapted is likely to constitute a deviation unless the bill of lading expressly indicates that the container(s) will be loaded on deck. Containers should not in any event be stowed on the deck of such vessels unless they can be securely lashed and the deck can clearly take the weight. Prevention of theft/pilferage of or from container (pre- and post-sea carriage). Containers may stand for a considerable time in inland depots or port compounds before and after the actual sea voyage. The carrier may be responsible for containerised cargo before or after sea-carriage, either because he uses depots to consolidate containers for shipment and as a collection point after carriage, or because liability is imposed by law. The selection of suitable premises is thus essential to ensure that containers are secure and well protected. A safe depot should be surrounded by a well maintained security fence, well lit at night, guarded by professional security personnel, with only one entrance/exit, manned at all times and subject to a reliable alarm system. Containers with goods of high value or risk should always be stowed in the most secure part of the depot, preferably near the security guard's office or situated where they can easily be seen. Proper documentation, on official paper, should always be demanded and produced at the appropriate time to minimise wherever possible the use of forged documents. Claims handling In cases of shortage, the seal is the most important item of evidence, either to prove short shipment, or to show where the loss occurred through a check on when the seal was last seen intact. However, when containers are carried in intermodal transport, documentation concerning the seals at each hand over point during transit is often not readily available. If damage is caused by defects in the container itself, documentary evidence covering its condition at each stage of transport is essential. Members should therefore ensure that at each stage of intermodal transport the container and seal are checked and their condition documented. This is essential if rights of indemnity against sub-contractors, and others responsible for carriage before or after the sea voyage, are to be preserved and enforced. Indeed, through transport and multimodal bills of lading should be approved by the Club, and Members are required to preserve their rights of indemnity against sub-contractors and others who may perform part of the contract of carriage. Correct documentation ensures, so far as possible, that final liability rests with the party actually responsible for the loss or damage,

and the Club can assist Members and advise on the documentation involved. Signed Equipment Interchange Receipts (EIR) clearly identifying the containers and seal numbers to which they refer as well as any apparent defects are essential. Container securing equipment The loss overboard of containers and their cargo involves not only the potential for high value claims, but also poses considerable risks to general safety, to the vessel itself, and to the navigation of other ships and vessels. Special attention should therefore be paid to:i. Column and tier weights - a securing system is normally designed for certain stowage arrangements that takes account of total column, weight and maximum tier weights. ii. Sub-standard equipment - container securing equipment should be maintained in a reasonable manner, and the use of "rogue" or damaged equipment should be avoided. Twistlocks with fractures in their housing, and other equipment similarly fractured or wasted, can fail at a lower load than that allowed for in the securing system, and all those concerned with on board operations should pay careful attention to any defects to ensure that they are remedied or, where appropriate, that equipment is replaced. Heavy weather The risks associated with containerised cargo are of course generally brought into sharp focus if the carrying vessel encounters heavy weather conditions or if the vessel routing heightens the impact of the weather upon the ship and cargo. The latter should, of course, be accommodated in voyage planning, where it is both reasonable and possible to do so, and the pressure to maintain schedules should not override the practices of good seamanship. Stability may similarly affect securing equipment. If the vessel is excessively stiff she may be subject to a short rolling period, creating greater loads on all equipment and fittings. (See also Heavy Weather - The Ingredients for a Successful Defence). Masters and shore based planners thus need to ensure that safe practice is maintained at all times by the exercise of proper care to address these and the other factors discussed above. Dangerous goods There are nine classes of dangerous goods:- Class 1 Explosives Class 2 Gases Class 3 Flammable Liquids Class 4.1 Flammable solids Class 4.2 Substances liable to spontaneous combustion Class 4.3 Substances which in contact with water emit flammable gases Class 5.1 Oxidising substances Class 5.2 Organic peroxides Class 6.1 Poisonous substances Class 6.2 Infectious substances Class 7 Radio active materials Class 8 Corrosives Class 9 Miscellaneous dangerous substances

It is important that Members ensure that they are provided with a proper and correct declaration of the type of goods being shipped, and that they are packed and stowed as recommended in accordance with the IMDG code. According to paragraph 12.3.7 of the general introduction of the IMDG code, the signing of a "packing certificate" indicates that certain provisions have been properly carried out which includes:i. The CTU (Cargo Transport Unit) is clean, dry and apparently fit to receive goods. ii. If the consignments include goods of Class I, except division 1.4, the CTU is structurally serviceable in conformity with Section 12 of the Introduction to Class I of the IMDG code. iii. No incompatible goods have been packed into the CTU, unless approved by the competent authority concerned. iv. All packages have been externally inspected for damage, and only sound packages have been packed. v. All packages have been properly packed in the CTU and secured. vi. When dangerous goods are transported in bulk packages, the cargo has been evenly distributed in the CTU. vii. The CTU and the packages therein are properly marked, labelled and placarded. viii. A dangerous goods declaration has been received for each consignment of such goods in the CTU. It is clear that considerable care needs to be exercised in the carriage of dangerous goods. In extreme situations a vessel can be lost from the reaction of chemicals that may not be stowed or packed appropriately. The IMO Code of Safe Practice for Cargo Stowage and Securing covers what container packers should know and do. Personnel commissioned to undertake cargo stowage should be properly qualified and experienced. Safe stowage and securing depends on proper planning, execution and supervision. The overall objective, of course, is that cargo carried in CTUs should be packed and secured so as to prevent damage or hazard to the ship, to persons on board, to the Marine Environment, and to third parties who may also be at risk from a casualty. Regulatory codes and statutes The International Convention for Safe Containers, 1972 as amended (CSC 1972) sets out criteria to regulate international safety standards. Although concentrating on safety of human life, it is also a useful equipment management facility which serves as a cargo claims prevention scheme, emphasising the need for equipment management and maintenance programmes. Guidelines on the application of the IMO International Safety Management (ISM) Code are also relevant (Members have received a copy of recent Guidelines enclosed

with the Clubs circular of August 1996).The functional and certification requirements of the (ISM) Code include provision for Shipowners and operators to establish Management Systems, which promote the proper care and safety of cargo. Container vessels are required to have on board a manual that complies with the Code of Safe Practice for Cargo Stowage and Securing. Owners may use consultative companies who prepare Shipboard Operation and Emergency Plans (SOPEPS) for ISM approval to prepare such manuals. The Cargo Securing Manual is subject to approval by the Maritime Authorities of the Flag State, which in many cases implies that the classification society will endorse the manual HEAVY LIFT The transportation, handling and installation of heavy items which are indivisible, and of weights generally accepted to be in the range of 1 ton to over 1000 tons and of widths/heights of more than 100 meters that are too large to fit into normal containers or onto conventional transporters. These oversized items are transported from one place to another (sometimes across country borders) then lifted or installed into place. Characteristic for heavy lift goods is the absence of standardization which requires an individual transport planning. Typical Items Generators, turbines, reactors, boilers, towers, casting, heaters, presses, locomotives, boats, satellites, military personnel and equipment. In the offshore industry, parts of oil rigs and production platforms are also lifted; some of these are also removed at the end of an installation's working life. Recent notable lifts have included several of >2000 short tons in the de-commissioning of the North West Hutton oil field in the (British sector of) the North Sea. Transport To transport heavy lift items special trucks or trailers (flatbeds) are used, which are especially suitable therefor due to their large loading area and capacities. For air transports special large-volume and strong cargo aircrafts like the AntonovAn-225 are employed which can move up to 250 tons of freight. On inland waters barges are often used. Transports at sea carry out special heavy lift vessels which often possess won cranes for loading and discharging cargo. Transportation of heavy lift items ranks among the most challenging and complex services in logistics and is handled by specialized companies, at sea for example by the project and heavy lift carrier Beluga Shipping Gmb.

CHAPTER III CARGOES- PACKING METHODS, MODES OF HANDLING & TYPES OF LOSSES
Nature of Cargo: Category 01: Solids SUBJECT MATTER Asbestos Cement Sheets USUAL PACKING Loose/Crate NATURE/TYPE OF LOSS Brittle Damage to Edges;breakage Cast iron Scrap Bulk/Loose Full of Foreign Matter /wt difference G.I. Sheets Machinery Grain (Wheat,maize& barley) M.V. Parts Cases/Crates/Box Loose/Crates Cases/Crates Hessian bags Flaking; White rust; crusting Breaking,rusting,theft Fermentation when wet, infestation,heating Rusting,breaking,radiator core damage

Category 02: Liquids SUBJECT MATTER Crude Oil USUAL PACKING Bulk ;in Tanker NATURE/TYPE OF LOSS Contamination, mixing with Water Paints Drums Mixing with Sea Water

Category 03 : Powders/Granules

SUBJECT MATTER Flour

USUAL PACKING Bags

NATURE/TYPE OF LOSS Tainting, heating, tearing of bags, rodents, exposure

Cement

Bags

Deterioration with age, water damage

Sugar

Bags

Hygroscopic, Caking, Lumpiness, Tearing of Bags

Tea

Chests

Water Damage, Pilferage,Taint damage

CARGO SUSCEPTIBILITY TO VARIOUS DAMAGES:1. BREAKAGE

Asbestos, bottled goods, particularly liquids, chinaware, crockery, eggs, machinery, particularly delicate, porcelain, slates, mirrors, etc.

2.HEATING

CAT 1:Animal meal, bran, cloves, coal, particularly soft coal, coconuts and copra, cocoa, cottonseed and all other oily seeds, flax, grain of all varieties, ground and all other oilynuts, hay, maize, oil cakes, sugar, tobacco etc.

CAT 2: Areca (betel) nuts, bitumen, butter, beeswax, camphor 3.HYDROSCOPIC (DELIQUESCENT)

Alum, caustic soda, salt, sand, sugar, sulphuric acid, etc.

4. INFLAMMABLE

Gas: Acetylene, hydrogen.

Liquid: Acetone, alcohol, benzine,coal tar, ether, kerosene, petroleum, paints, turpentine. Solid: Celluloid, coal, cotton, fibres, magnesium, matches, naphthalene, paper, tar, zinc dust.

5. LEAKAGES

All liquids and solids which liquefy on a rise in temperature, bagged cargoes are sound, dust cargoes and commodities in powder form, gases. 6. SHIFTING CARGOES

Bricks, barrels & casks, bulk cargoes generally, coal, cylinders, logwoods, iron bars or sheets or rails, slates, wheeled vehicles if inadequately chocked.

7. SWEAT (CONDENSATION)

CAT 1: Arrowroot, quinine, grain, malt, pepper, potatoes. CAT 2: Cement, cocoa, corrugated iron sheets, ginger, indigo, nickel, potassium salts.

8. SUSCEPTIBLE TO TAINT

Cigarettes & cigars, coffee, figs, flour, foodstuffs, tea. Packing The method in which goods are packed is a material consideration. Other things being equal, the method employed is likely to be governed by the nature and value of goods. The type of containers may also exercise a considerable influence in minimising the TPND losses. The materials used in packing may themselves increase the hazard, e.g., gunny sacks or bags, or damp straw, may introduce the risk of spontaneous combustion where the contents themselves are free of this hazard. For fine goods, cases should be metallined as should those which contain goods liable to taint. For this reason tea chests are lined with lead foil. The use of polythene for packing has minimised some risks,but where breathing is required, polythene may pose new problems, such as sweating.

PACKING METHODS:

1. WOODEN BOXES/CASES: Convenient packing for many commodities, provided the wood is of appropriate quality and thickness. Protects contents from damage by blows from outside objects to a good extent.Can be reinforced with tension metal straps.

2. CRATES: Used to pack heavy items such as machinery. If contents are very strong, open type crates can be used, whereas for other contents fully closed crates are used.

3. BAGS: Paper, jute, artificial fiber etc., are used to make different types of bags. Items like food grains, coffee beans, cement, sugar etc. are the usual contents. Mainrisks are, water damge., tearing, bursting.

4. BALES: Goods which cannot be damaged by impact or knocks are usually packed in bales, e.g., cotton and wool. A pressed bale withstands many of the transit hazards better that other packages. Susceptible to hooks, country damage and water damage.Cotton in bales is also susceptible to spontaneous combustion and explosive fire.

UNITISING THE PACKAGES Pallets. Liftvan. Containers: Dry cargo containers; Special purpose packages.

5. CARBOY : A very large glass container, protected by basket work, and used for the carriage of liquids, acid and the like usually shipped on deck and containing anything from 50 to 150 litres.

6.CASES: Generally used for good class merchandise. In normal times, cases are strengthened by battens\ safety clips, and the like. Expensive goods are sometimes shipped in tinlined or zinclined cases.

7. BARREL: Wooden container suitable for the carriage of noncorrosive liquids (such as beer, wines, molasses, oils), apples, olives, tobacco, etc. When barrels are shipped empty, they are often dismantled and made into bundles, the trade terms for which is stocks.

8. CORRUGATED FIBREBOARD (CF) BOXES/CARTONS: Transport packages that employ wooden frames at the ends and fibreboard materials on sides designed to compromise between the wooden boxes and the corrugated fibreboard boxes, Corrugated fibreboard boxes are also designed with wooden uprights at the corners or with a wooden frame base to increase their stacking strength. Wirebound boxes employing wiremesh between the corrugations of the fibreboards, and collapsible and returnable wirebound corrugated boxes are also employed for shipments. Though these are reasonably strong, light in weight and most economical, yet they are not always suitable for export cargo on ocean voyages or for shipments likely to be exposed to much moisture. Increase in moisture content of CF adversely affects its rigidity and compression strength. 9. CYLINDER: Steel container used for the transportation of gases, such as oxygen, under pressure generally shipped on deck.

10.DESICCANTS: Desiccants or dehydrants absorb moisture from ambient air and are used in conjunction with moisture barriers. Desiccants will provide protection by absorbing the moisture from the air trapped inside the barrier and also the moisture from the air that may penetrate the barrier over a period of time.

11.DRUM: A cylindrical metal can, or canister, chiefly used for oils/paints, and the like.

12. KEG: A small cask or barrel.

13. LIFTVAN: Where cargo has to be handled package by package, railways suffer delays and long lines of wagons stand idle whilst awaiting loading and unloading. A system therefore developed to speed up the 'turn round' of wagons. The system comprises of constructing vans in two separate parts the whole of the container unit to be detachable from the chassis, and, by standardization, to be readily usable on any other chassis. The van part is called a "lift van" and the chassis is called a "flat."

14.LOGGING: Bulky articles, such as machinery, are sometimes 'lagged', that is, protected by binding of rope or wood lashed round.

15.MOISTURE BARRIER: To control water damage a moisture barrier is used between the product and the package. The barrier may be a polyethylene film, metalised film, specially treated paper or any other material which offers substantial resistance to moisture impregnation.

16.MULTIWALL PAPER SACKS: These packages are suitable for packaging powdered, granular, lump materials like dry chemicals, fertilisers. They are flexible. Their strength and protective qualities can be increased by appropriate linings.

17. NESTING : The Packing of hollowware, for example baths, bowpipes, and the like, so that one article fits inside another to economise space and so save freight.

18.PALLETISING: Palletising is the assembly of one or more packages on a pallet (platform, usually wooden) base and properly secured to it.

19. PALLETS: Packages are fastened to a platform and properly secured to it throughout transit. The platform is called a "pallet" and it is lifted into and out of the ship as a complete unit. As an alternative, packages are unitised in say, units of 10 or 12 bags held together by 'disposable slings.' These slings are made of strips of nylon webbing and can be discarded once the goods are unloaded at destination.

20.PIPE: A term applied in the wine trade to casks, the capacity of which varies according to the type of wine.

21. UNITISING: Unitising is the assembling of one or more packages or items into a compact load, secured together and provided with skids for easy handling.

22.WIREBOUND BOXES: Wirebound boxes employ wiremesh between the corrugations of the fibreboards, and collapsible and returnable wirebound corrugated fibreboard boxes.

23.WOODEN BOXES/CASES: Goods which are liable to damage from sharp blows on the container as well as goods which are not light in weight may well travel better in wooden boxes or cases. A wooden box is strong and in many ways the most convenient packing for many commodities provided the wood is of appropriate quality, thickness and correct moisture content. It is also necessary for the shipper to ensure that the wood used is reasonably free of "knots" and is not badly crossgrained.

24.WOODEN CRATES : A crate is essentially a wooden framework to house the equipment. There are two general types of crates: the open ones and fully covered ones. The open crate can be used where the contents are inherently strong and packing is required primarily to facilitate handling and stowage. For closed crates, a strong framework should be provided to support the lining and flooring when a heavy item is contained in it, e.g., machinery.

CHAPTER IV TYPES OF LOSSES- CASE STUDIES

Hogarth v Walker [1899] 2 QB 401 A vessel employed continuously in the Black Sea grain trade was insured under a policy on 'ship and furniture'. When the vessel collided with a pierhead and severely damaged her bow section, where a large number of dunnage mats and separation cloths were stowed, the owners of the ship claimed on their policy for the loss of the dunnage mats and separation cloths which had floated away. The underwriters defended the action, on the basis that the dunnage mats and separation cloths were not covered by the policy. The court ruled that the owners could recover under the policy because the insurance was on 'ship and furniture'.

Apollinaris Co v Nord Deutsche Insurance Co [1904] 1 KB 252 The plaintiffs insured a variety of goods with the defendants against all risks for a voyage from London to Amsterdam and thence up the Pdver Rhine to Neuenahr. On arrival at Amsterdam, the goods were transhipped and stowed on the deck of a Rhine steamer in readiness for the canal and river passage.

However, a fire broke out, and many of the goods were destroyed. When the plaintiffs claimed on their policy of insurance, the insurers refused to pay, on the basis that they, the insurers, had not been notified that the goods were to be carried on deck. The court ruled that, as it was common practice for goods to be stowed on the deck of Rhine steamers and, therefore, as the goods need not be specifically insured, the insurers were liable under the policy.

British and Foreign Marine Insurance Co Ltd v Samuel Sanday and Co [1915] 1 AC 650, HL A British firm of corn merchants shipped two consignments of linseed and wheat aboard the British steamships St Andrew and Orthia from Argentina to Hamburg. Before the ships reached Hamburg, hostilities broke out between Germany and Great Britain and both vessels were ordered into British ports. The cargo-owners warehoused their goods and served notice of abandonment on their insurers.

The House of Lords, arnrming the decisions of both the lower courts, ruled that there was a total loss of the adventure itself caused by the restraint of princes, a peril insured against. Therefore, the cargo-owners could recover under their policy of insurance. Flint v Flemyng (1830) 1 B&Ad 45 The freight on the ship Hope was insured by the plaintiff with the defendant insurers for a voyage at and from Madras to London. The cargo comprised some 25 tons of redwood, which the master had purchased on behalf of his owner, 122 tons of saltpetre, for which the ship was contracted to carry, and a further 90 tons of light goods, for which there was no written contract of carriage, only a verbal undertaking. Before any of the cargo was loaded, Hope was lost by a peril insured against and the plaintiff claimed on his policy of insurance. The question before the court was: on which items of cargo could the policy on freight be held to have attached? The court ruled that the insurers were liable for the freight on the redwood and saltpetre, but were only liable for the freight on the light goods if the contract of carriage could be found.

Marine Cargo Insurance: A Case Study February 1994, China Textile Import and Export Corporation a n d D a l i a n i n a m a r i t i m e companies have signed a 1000 transport protocol silk shirts to Marseilles. After signing thecontra ct, the insurance company to import and export companies Youxiang transport of the goods insured single FPA. February 20, after loading the goods set sail on February 25, loadingthe goods in the ship suddenly encountered a rare storm at sea, the hull badly damaged, sank onFebruary 26, March 20 . Textiles Import and Export Company for the goods to the insurancec o m p a n y c l a i m s , t h e i n s u r a n c e c o m p a n y t o t h e g o o d s c a u s e d b y natural disasters, refusedcompensation for the loss, then, import and export company to court to require i n s u r a n c e companies to pay

insurance.Question: Does this case the insurance company liableThe insurance company liable. According to the Chinese Peoples Insurance Company of marinecargo insurance provisions, marine cargo insurance, the basic insurance coverage is divided into two major categories and additional insurance, the basic insurance is insurance for insurancealone. Main Cheng Baohai the loss of goods on the risk of causing, including the FPA, WPA andg e n e r a l i n s u r a n c e . F P A o n t h e p a r t o f t h e l o s s c a u s e d b y n a t u r a l d i s a s t e r s a r e g e n e r a l l y n o t responsible, unless the transit occurred stranded, sunk, and burnt and other accidents. AlthoughF P A p a r t o f t h e l o s s c a u s e d b y

n a t u r a l d i s a s t e r s l i a b l e , b u t a l l t h e l o s s e s c a u s e d b y n a t u r a l disasters should be liable, in this case, the import and export companies covered is FPA, and the security of cargo the ship sank due to storms when the total loss, there was an actual total loss, so the insurance company liable, the reason put forward is not established

CHAPTER V CONCLUSION