Cargo Liquefaction Remains A Risk

The continued demand to source the most competitive price for iron and nickel ore has highlighted the need for ship owners to exercise contractual prudence and for ship's crew and master to be vigilant during loading.

On 25 July 2012, BIMCO published its "Solid Bulk Cargoes that Can Liquefy Clause for Charter Parties". The clause was designed to help ensure the safe transportation of solid bulk cargoes, which is a particular issue in the case of cargoes prone to liquefaction or combustion. However, a recent ship loss and severe delays in port whilst resolving contractual responsibilities means the risk of carrying such cargoes remains as real as the need to be reminded what should be done.

Parties' obligations

Obligation to nominate and load a safe cargo

The primary obligation of charterers is to nominate and present for loading a cargo that is safe for transportation. This may be expressly stated in the charterparty, although it is not always. If not expressly stated, there is a fallback position under English law which provides that dangerous cargoes may not be transported unless owners have sufficient notice of the character of the cargo to enable them to take the necessary precautions to carry it safely.

What is a "safe" or "dangerous" cargo?

This may be provided for in the charterparty and may also be agreed by incorporation of the Hague or Hague-Visby Rules, which specifically prohibit the shipment of certain types of dangerous goods. Further, English law broadly defines dangerous goods to include goods which "as a result of their inflammable, explosive, corrosive, noxious or other properties are likely to cause personal injury or physical damage to the ship or other cargo".

Subject to agreement between the parties, it is very likely that charterers by tendering a cargo that, by virtue of its water content or combustibility will jeopardise the safety of the crew, vessel or cargo, will be in breach of the above warranty of safety.

Information in relation to the cargo

Whether the cargo is "dangerous" or not, charterers have an obligation under chapter VI the International Convention for the Safety of Life at Sea, 1974 (SOLAS) and Section 4 of the International Maritime Solid Bulk Cargoes (IMSBC) Code to provide the owners, master or owners' agent with certain information about the cargo. This includes (but is not limited to) information (where applicable) about the:

Bulk cargo shipping name Cargo Group (e.g. Group A - Cargoes which may...