It has historically not been easy to make money in the shipping industry – and probably still isn’t. In the old days, some shipowners responded to their inability to control demand and earnings by skimping on maintenance and repairs, particularly when the market was bad. As a result, when I started writing for HCB, more than 25 years ago, I wrote a lot about ‘substandard ships’ and the accidents they caused.
Thankfully, that phrase has not featured in the magazine for some time. Concerted efforts to remove trading opportunities for poor quality ships, primarily through the various port state control networks around the globe but also, in the tanker shipping sector, through the SIRE and CDI inspection programmes, has had a significant impact in improving standards.
In the past few years, the focus has shifted from substandard ships to what one might call ‘substandard cargo’, a problem that largely affects the container shipping sector. The disasters involving Hyundai Fortune and Hanjin Pennsylvania, up to Maersk Honam and MSC Flaminia – and all those in between and since – have destroyed cargo, killed seafarers and damaged the environment.
Response to this growing litany of containership fires – which have averaged around one every 60 days – was for some time frustratingly slow. Neither the liner operators nor their insurance underwriters were keen to share information that might help to prevent further incidents, although eventually, and thanks largely to the drive of certain individuals in the business, they did agree to form a network to collect the appropriate data, the Cargo Incident Notification System (CINS).
More recently, it appears that the rapid growth in the size of containerships – the latest generation can carry 23,000 20-foot boxes – has further concentrated the minds of those with a financial interest in the business. If one of these new mega-ships were to suffer a total loss as a result of a fire in its cargo, total claims could run to around $3 billion.
The vast majority of these shipboard fires are caused by dangerous goods and most often by dangerous goods that have been improperly declared or not declared at all. There are two main reasons why shippers might fail to declare: ignorance of the rules or wilful avoidance of the costs involved in compliance. But once any cargo is stuffed inside a container and the doors are closed, it is virtually impossible to know what is in there – and whether it presents a hazard to the ship.
As it turns out, this is another area of industry where digitisation may be able to make a difference. Hapag Lloyd started the ball rolling a couple of years ago with a system designed to interrogate shipping documents for tell-tale signs of undeclared dangerous goods, and Maersk and IBM partnered on another project.
The sector at large is now moving forward through CINS with the help of the National Cargo Bureau and its Exis Technologies subsidiary, whose Hazcheck system is to be used as the platform for a similar approach, available across the liner shipping sector.
This is an encouraging move and, if it prevents undeclared dangerous goods getting into the maritime supply chain, will be a boon not only to shipowners and their underwriters but also to shippers and forwarders who, after the landmark MSC Flaminia judgment, find themselves very liable indeed. Peter Mackay[post_title] => Editor's letter on substandard cargo [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => editors-letter-on-substandard-cargo [to_ping] => [pinged] => [post_modified] => 2020-01-06 11:11:12 [post_modified_gmt] => 2020-01-06 11:11:12 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.hcblive.com/?p=14825 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )