Trade & delay insurance

We are working together with The Strike Club to enable shipowners and charterers to know there is an insurance which will cover the vessel' s loss of time arising out of certain events.
This insurance cover is not intended to compete with the traditional loss of hire insurance, as the scope of cover is different whether due to period of indemnity or events insured.
The scope of the Class III cover is practical and perils insured against include many accidents which fall under the vessel's P&I cover which only pays for direct costs. The cost of cover is very affordable relative to the cost of traditional loss of hire cover and insignificant relative to the annual freight or hire income.

Examples of recent incidences falling under Strike Club cover :

Collision

HMM and CSCL boxships collide China shipping Container Lines' 4,252-teu boxship CSCL Qingdao (built 2001) and Hyundai Merchant Marine's (HMM) 1,005-teu Hyundai Harmony (built 2002) have collided outside the Korean port of Busan.

Reports say the Malta-flagged CSCL Qingdao sustained damage to its port side shell that extends below the waterline and measures about 6 metres.

A total of nine containers were lost overboard, but seven are said to have subsequently been retrieved. Substantial damage to cargo is anticipates.

The Panama-flagged Hyundai Harmony is said to have sustained damage to its bulbous bow and the surrounding deck area and has returned to port for repairs.

The CSCL Qingdao is chartered from the Ofer Brothers while HMM has the Hyundai Harmony on charter from Cido Shipping.

P&I coverage for the CSCL Qingdao is provided by the London Club, while that for the Hyundai Harmony comes from the Japan Ship Owners' P&I Association.

There are no reports of any injuries to crewmembers aboard either ship.

LPG carrier in fatal collision Chinese state media report that at least one seafarer is dead after a collision off Lushun today.

The South Korean LPG carrier Saehan Galaxy (built 1990) and a small Chinese merchant ship collided off the northeast Chinese port this morning local time.

Some reports mistakenly identify the South Korean ship as an LNG carrier.

The Chinese vessel, Jingan No6, sank after the collision. None of the 19 crewmen are said to have been in lifeboarts. One seafarer is known dead and another is still missing after extensive search-and-rescue operations.

The official Xinhua News Agency gives a figure of 4,987 as the tonnage of the otherwise unidentified Jingan No 6 and says it was carrying 84 tonnes of bunkers and other oil.

Saehan Galaxy has been ordered into port at Dalian for further investigations, says China's Xinhua news agency. Its condition has not been reported.

Seoul-based Saehan Marine operates some 12 small chemical tankers and LPG carriers.

A vessel belonging to Dalian Far East Intl Shipping was involved in a collision with another vessel in Pusan. Our vessel was arrested and collision security for US$350,000 was demanded for her release. Our vessel was insured locally in China, and their LOU was rejected by the opponent vessel. Our vessel's insurer was unable to provide an alternative means of providing security such as a bank guarantee and the vessel was detained for about 14 days on this account. Eventually the owners had no alternative but to put forward their own cash security to release the vessel. Fortunately our vessel was insured for Strike Club cover which reimbursed the owners the full amount of the 14 days attributable to the vessel's insurers' inability to provide suitable security.

State of quarantine

-Aurora

-Cormo Express

Pollution

		French flag down panamax
		A Diamlemos-controlled panamax has been stopped by French authorities on suspicion of pollution. French press reports say the 74,500-dwt Captain Diamantis (built 2000) was spotted on Wednesday southwest of Brittany trailing an oily wake 2.8 kilometres long and 30 metres wide. Coastguard officials observing from a Falcon 50 reconnaisance plane alerted surface authorities. Prosecutor Francois Nicot ordered the vessel diverted and the master is said to have yielded to instructions from naval officials to proceed to the port of Brest this morning. Last year France established three regional centres for prosecution of marine pollution at Marseilles , Brest and Le Havre . Authorities have been aggressive ever since in tracking down polluters, diverting them to port and prosecuting them. To cover fines that may be assessed after court proceedings have been held, guarantees in the quarter-million euro range are demanded before the vessels are allowed to sail. A portion of the fine is typically assessed the master of a ship in case of a conviction. London-based Greek owner Diamantis Lemos controls a modern fleet of six panama bulkers and two medium-range products tankers with two more under construction. Captain Diamantis is a stand-out among ships stopped in the campaign to date. Merchant vessels that have been stung by the French airborne spotters include the 4,400-cbm LPG carrier Gitta Kosan (built 1990), the 3,500-dwt general cargoship Pantokratoras (built 1982), the 6,600-dwt general cargoship TK Venice (built 1985), the 293,000-cbf reefer Nova Hollandia (built 1983) and the 10,000-dwt multipurpose vessel Dobrudja (built 1987).

		Far East recent trends
		Recent experience has shown unwelcome trends apparently developing in the approach to pollution incidents in China and Vietnam resulting from collisions. These trends involve an increasing requirement for cash security, and the requirement for security from the non-polluting vessel. In one case, two ships collided in fog, some 60 miles off Shanghai. A cargo tank of one ship was ruptured spilling about 600 tonnes of styrene monomer into the sea. The nature of styrene monomer is such that it evaporates quickly leaving little or no trace of any residue and little evidence of pollution damage. Evaporation can be assisted by high pressure hosing, as well as by the normal action of wind and waves. The Chinese authorities saw this as a serious pollution incident and detained both ships, initially demanding cash and irrevocable letters of credit for several millions of dollars as security. Whilst negotiations succeeded in persuading the authorities to accept conventional security (rather than letters of credit), the demand for cash was maintained. Both vessels had to provide substantial amounts of cash security. To make matters worse, the total amount of security sought appeared to be disproportionate to the spillage, but negotiations failed to produce any realistic breakdown of the amount sought or a reduction, notwithstanding the efforts of the Club's lawyers. The ships were delayed for several weeks while security arrangements were finalised. Another collision in Dalian produced a similar reaction by the local authorities, although in this case the pollution was more evident, being marine diesel from a ruptured bunker tank. The two ships were delayed for several weeks while both shipowners (not just the owners of the polluting vessel) were forced to provide substantial security, including a substantial proportion in cash. In Vietnam, two tankers collided causing a spillage of gas oil. The authorities demanded cash and security from the non-polluting vessel, which was immediately deemed to have caused the collision. Again, delays were incurred pending the provision of security totalling many millions of dollars. In all cases legal opinions were sought on whether it would be possible to challenge the requirement for cash, the requirement for security from the non-polluting vessel and the amount of security demanded. Lawyers indicated that although these issues could be challenged in Court, resolution would take several months and it was not possible to predict the Court's decision. The ships would have had to remain detained during this time. The prospect of delay, and an uncertain outcome, meant that these demands could not be effectively challenged. The hardline position taken by the Chinese authorities may be the result of the Marine Environmental Protection law which came into force on 1 April 2000 and seeks to strengthen pollution measures. Although the Club fully recognises the seriousness of marine pollution, nonetheless, it should be possible for security to be provided for legitimate claims in a manner which does not involve disproportionate delay, and in a form which does not impose unreasonable burdens on those against whom claims are made. In light of these developments, Members should be aware that any pollution incident of substance in either China or Vietnam may give rise to difficulties that result in delay.
		Source: Steamship Mutual - Sea Venture Volume 20 December 2001

Illness injury on board

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Class III cover :

Risks covered	Limit of indemnity per occurrence	Deductible per occurrence	Our comments
Crew and officers strikes	10 days	1 day	Not usually required by Chinese owners
Collision with another ship, striking a fixed or floating object	14 days	2 to 5 days	(i) The most important risk under this cover. 90% of the claims for shipowners in China emanate from this risk. (ii) Includes loss of time due to investigations by authorities(iii) Includes loss of time if your Chinese Hull insurer is unable to provide security timely
Unintentional grounding and stranding	14 days	2 to 5 days	The Club's largest Chinese claim relate to the risk
Illness, injury on board or caused directly	10 days	1 day	(i) Includes vessel's deviation time (ii) Includes loss of time arising from injury, death to stevedore, pilots etc.,
Desertion of crew	10 days	1 day	Such incidences have occurred for Chinese crew of Korean origin.
Discovery or alleged presence of drugs	10 days	1 day
Pollution or alleged pollution emanating from vessel	10 days	1 day	Includes detention by authorities investigating vessel's liability
Action by authority against an entered vessel due to incident involving a vessel in same ownership in respect of collision, stranding, grounding, illness, death on board, discovery of drugs			Useful protection if owners are being threatened to pay an unreasonable settlement in lieu of arrest
Discovery of stowaways	10 days	1 day	Stowaways are a common occurrence. These cost of handling repatriation are expensive which is covered under P&I. The time loss arising from vessel's deviation to avoid a prolonged stay by the stowaway on board can be more expensive
Imposition of a state of quarantine on vessel	10 days	1 day	Includes events such as SARS, and Asian Gyspy Moth provided owners acted properly

We summarise the Class I & II risks covered.

Port workers strikes ( stevedores / administration / customs / pilots / lock- keepers... )
Strikes by inland workers ( miners / factory workers...)
Blockades by truckers, fishermen, farmers
Environmental objectors
Boycotts by international trade organizations
Riots, civil commotion, political protest
Fire, explosion, mechanical breakdown on land ( port installations / railway networks... )
Certain weather conditions indirectly affecting the entered vessel
Natural disasters indirectly affecting the entered vessel
Aircraft impact or accident, or delay to or misdirection of air cargo
Accidental loss or damage to any vehicle carrying cargo to or from the entered vessel
Partial or total closure of a port or waterway by authorities
Closure of borders, import or export or export controls, embargo or prohibition
Physical or electronic damage caused caused by strikers, vandals, terrorists, saboteurs or malicious persons
Expropriation, confiscation or seizure of cargo loaded or to be loaded

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Trade & delay insurance