Expansion Into Logistics - A Risky Business

Originally published in the December 2009 issue of Port Strategy.

Historically, ports provided traditional stevedoring and intermodal cargo-handling services to their customers whereby they loaded and unloaded ship cargo, transferred the cargo to any onward mode of transport and, perhaps, stored the cargo waiting for collection for onwards transport. Liabilities arising from such services were generally limited to claims in respect of damage or delay.

Typically, for example, an incident involving the collapse of a gantry crane would result in cargo interests bringing claims for damage caused to cargo and also any resulting penalties incurred under the relevant sale contracts if the vessel and/ or cargo operations are held up as repairs are made to the vessel or to shoreside equipment. Similarly claims might be made by the owners of the vessel if damage is caused during such an incident and the operators/charterers in respect of any lost time. Claims might also be expected from stevedores injured during operations.

These liabilities of course remain a significant part of a port service provider's risk exposure and the resolution of claims arising can be complex due to the complicated contractual structure of modern day transport. The port operator will expect a claim to be made by their customer under the enduser agreement which should contain provisions limiting the port's liability, liquidated damages clauses for certain types of loss and defences the port can seek to rely upon. It may be, however, that the loss has not been suffered by the contractual counterpart in the end-user agreement. The enduser will more often than not be the charterer of the vessel in a long chartering chain. The various charterparties are unlikely to be entirely back to back, given they will often be of different types (a demise charter will not be on the same form as a time charter) and the loss and expenses arising from the damage and delay caused to the vessel will be dealt with by the terms of the chartering chain. This gives rise to a number of difficult questions. What if, under the charterparty terms, the loss suffered is for the owners or disponent owner's account who has no contractual nexus with the port? Will the port potentially face a claim from two parties – the enduser/ charterer and the owner/disponent owner of the vessel? Where a claim is brought by the owner/disponent owner, what contractual terms will the port operator be able to rely upon in...