In the last half dozen years or so we have seen some unprecedented maritime disasters or, at the very least, events that have been severely disruptive to supply chains. Whilst most of these events have occurred on trade lanes that do not directly impact trade to or from South Africa, that is just by chance. It could happen to us.

Here are a few of the maritime disasters which have occurred:

• In 2020 around 3000 containers were lost over the side of ships, mostly in the Trans- Pacific Lane.
• To date in 2021, over 1000 containers have been lost over the side of ships.
• In March 2018, cargo on board the Maersk Honam caught fire. Sadly, 5 of 27 crew lost their lives with the remaining 22 able to abandon ship. Other ship-board fires include but are not limited to the MSC Daniela in 2017: the CMA CGM Rossini in 2016, and the Hanjin Green Earth in 2015.
• On 20 May 2021, cargo (Nitric Acid) aboard the approximately 2400 TEU X-Press Pearl carrying 1500 containers caught alight. The ship burned for around a week before eventually sinking in 21 metres of seawater off the port of Colombo – all crew were safely evacuated. The ship and all cargo has been declared a constructive loss.

Where containers were lost over the side of ships, investigations have so far pointed to a combination of causative factors e.g., severe weather causing extraordinary ship movement (pitching and rolling) insufficiency of container lashing, faulty or poorly maintained equipment and cargo movement due to improper or insufficient cargo securing within the containers.  

In the case of the MSC Napoli which foundered and lost containers overboard in 2007, the accident report found significant discrepancies between the declared weights and the actual weights. We quote from Page 29 of the official accident report Napoli Report No 9/2008 (publishing.service.gov.uk)

“About 660 containers stowed on deck, which had remained dry, were also weighed. The weights of 137 (20%) of these containers were more than 3 tonnes different from their declared weights. The largest single difference was 20 tonnes, and the total weight of the 137 containers was 312 tonnes heavier than on the cargo manifest. During the removal of the containers, the positions of 700 containers on deck were compared with the positions recorded by the terminal operator (i.e., the positions entered into the loading computer to determine the stability condition). Of these units, 53 (7%) were in either the wrong position or declared as the wrong container. It is generally agreed within the container industry that up to 10% of containers loaded onto a vessel might not be in their planned positions.”

In the cases of fire erupting in the cargo on board the ships, investigations are not all complete. The two most significant causes identified so far are improper/incorrect declaration of hazardous cargo and/or improper/incorrect packaging (and packing) of hazardous cargo.

What are the consequences of these events?

Except where there is total, constructive loss of vessel and cargo, the most likely consequence is that the Owner will declare General Average. At the risk of over-simplification, an ‘Average’ is a loss suffered during an Adventure. An Adventure is the duration of the sea “Voyage” for which the goods are insured.  A ‘Particular Average’ is a loss suffered by one party in the adventure whereas a General Average is a loss suffered ‘Generally’ i.e., by all parties to the adventure.

The ‘loss’ suffered is based on the costs incurred by the Owner in salvaging the adventure, shared pro rata between all parties to the adventure. The calculation of which is based on the Customs c.i.f. value of cargo (for each party to the adventure) and may amount to 70% or more of the value (usually c.i.f. value plus 10%).

For the cargo interests, if they have adequate marine insurance, the policy will cover the General Average claim. Similarly, total, or partial loss or damage, will be covered to a greater or lesser extent by the Marine Insurance policy.

But what if accident investigators identify the container/s that was the catalyst for the events that led to the disaster and upon intensive further investigation, identify that the cargo was incorrectly stowed or packaged, or incorrectly declared hazardous cargo, or the weight was incorrectly declared. For example, the Maersk Honam fire was found to be caused by mis-declared cargo and the Pearl X-Press fire, while found to have been caused by properly declared Nitric Acid, indications are that it was inadequately or improperly packed.

(to be continued)