North P&I Club has released a new briefing paper exploring the insurance implications when solid cargoes behave like fluids and presenting typical responses to claims arising from cases of liquefaction.
Published today, 25 May 2022, A Most Dangerous Trade: The Problems of Liquefaction provides insight into the consequences of liquefaction, whereby solid bulk cargo behaves like a fluid, creating a free-surface effect that may, in certain cases, cause the vessel to capsize. The paper is written by David Richards, Director (Claims), North P&I Club.
Opening with an overview of the phenomenon in the maritime context, A Most Dangerous Trade describes how liquefaction risk might be overlooked initially and later identified during loading or mid-voyage – despite compliance with the International Maritime Solid Bulk Cargoes (IMSBC) Code. The paper goes on to investigate the insurance implications of liquefaction causing the loss of a ship – presenting typical claims responses from charterers and cargo interests – and outlines the role of P&I providers in covering such incidents.
Liquefaction risk identified during loading
Proper compliance with the Code ought to mean that no solid bulk cargo is at risk of liquefaction during a voyage. However, cargo is often presented by the shippers as safe for shipment, but a risk of liquefaction is subsequently identified during the loading process, often after the crew carry out the complementary test procedure for determining the possibility of liquefaction laid down in the Code (known as a “can test”) or due to the involvement of a cargo surveyor. Visual observations of cargo during loading, such seeing splatter on the sides of the hold, often give cause for concern.
Cargoes may have been wrongly presented as safe to load for various reasons, ranging from mistakes during the sampling and testing process to outright fraud by the shipper. Inevitably something has gone wrong on the shore side in such situations since, before presenting a cargo for loading, shippers are under a legal obligation under the Code to correctly identify the proper Bulk Cargo Shipping Name for any solid bulk cargo intended for shipment; determine the properties of that cargo in accordance with approved and suitable sampling and testing procedures;
provide the master or his representative with appropriate information in writing sufficiently in advance of loading to enable precautions necessary for safe carriage of the cargo to be put into effect; and, provide a signed declaration in a prescribed form to the effect that the cargo has been fully and accurately described and that the test results are representative of the cargo to be loaded and correct.
For a Group A cargo, the cargo declaration should be accompanied by a signed laboratory certificate stating the moisture content of the cargo and the Transportable Moisture Limit (“TML”). The TML is determined as a figure 10% in excess of the product’s flow moisture point (“FMP”), FMP being the percentage amount of moisture in the product at which, under certain conditions, the cargo may begin to begin to behave like a liquid, or “flow”. If the moisture content (“MC”) of the cargo exceeds the TML then it is not safe or suitable for shipment. The “competent authorities” (port state of departure, port state of arrival and flag state) may authorise an exemption to the Code.
A Most Dangerous Trade: The Problems of Liquefaction is available now. To download, visit: nepia.com/articles/a-most-dangerous-trade-the-problems-of-liquefaction/
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