Liquefying Bulk Cargoes : Old Problem / New Warning

Carriage of Bulk Cargoes

Published September 2009

The problem of liquefying cargoes is well known in the Bulk Trade, with very serious casualties occurring over the years, culminating in the MV ASIAN FOREST on 17 July 2009, and at other times big delays being suffered such as was experienced recently by the MV TONGHAI in India.

What is the Problem?
Put in layman’s terms: mineral cargoes can turn into a muddy slush if the amount of moisture (typically water) is too high. Bulk Carriers are not designed to carry liquid or semi-liquid cargoes, and when this process happens it can cause stability problems that have led to vessels capsizing and sinking.

The problem occurs in mineral cargoes of predominantly fine particles, mined and stored in conditions which allow the soaking up of large amounts of water which is then retained, with minimal drainage or evaporation occurring.

Where does the Problem happen?
The main problem areas have been India, Indonesia, The Philippines, New Caledonia, and in part China.

Cargoes to have suffered this problem frequently include iron ore, nickel and fluorspar – but indeed any fine particle mineral cargo may be at risk from this issue.

The most recent high profile problem area is New Mangalore in India, affected by the Monsoon.

The recent high demand for Iron Ore by China and the issues between China and an Australian Mining Company brought shipments from India once more to the spotlight.

The issue can, however, arise anywhere where fine particle mineral cargoes are mined and / or stored exposed to the elements.

Why does the Problem happen?
The cargo is mined and stored in often quite simple facilities that provide no protection from the environment. The location of these mines is in countries and areas where generally facilities and infrastructure are under-developed and where the climate and weather leads to frequent large rain falls. The Monsoon affecting India in the Summer months is a particular issue, but the hot humid climate is present in all the countries where this problem is prevalent.

The cargo may be wet when mined or becomes wet when left in open storage areas. Drying from sunlight rarely does more than affect the surface of the cargo, which is stored and transported in exposed condition.

The Bulk Cargo (BC) Code
The BC Code governs the loading of such cargoes, and clearly states that a Shipper must provide clear information about the cargo before shipment.

The most critical information is documentation stating the moisture content and the Transportable Moisture Limit (TML). A cargo is not safe for shipment when the moisture content exceeds the TML. To find out if a cargo is safe requires the Flow Moisture Point (FMP) has to be measured against which the TML is calculated.

The way these values are ascertained is by way of tests as set out in the Appendix to the BC Code. One can do rough & ready “spot checks” with the so called “Can Test”, but in order to be absolutely sure the cargo has to be tested in a lab set up specifically to deal with this issue and such test must be undertaken by suitably qualified persons. The tests have to be done for every cargo, as no two cargoes are alike.

Particular Issues
In many of the problem places, there are no good facilities to hand to undertake the tests required by the BC Code, with actual equipment being basic or inappropriate and requisite know-how very limited or the BC Code even deliberately ignored.

Cargo storage - from production to loading - may be entirely exposed to the elements and shipments may occur during high moisture / humidity / rain seasons such as the Monsoon affecting India in the Summer months.

The cargo may also be mixed in with other cargoes prior to loading, meaning it is not homogenous and while one hold’s load may be perfectly safe the next hold could be a disaster waiting to happen.

Sampling and testing may at times only be done while loading is under way, the wrong cargo or parcels may be subjected to test on the shore side and indeed it is now the case that in some places the Shippers deliberately delay the provision of documentation until the last day of shipment. These quite unscrupulous people work on the basis that demand is so high for their product that they can get way with such sharp practice.

The Club has even had reports of threats of violence being made from the shore side in Mindanao, Philippines, when the ship’s side wanted to question and probe the veracity of information provided and test the cargo to be loaded.

What can be done about it?

Prevention is better than the cure.

• Vessels should not load if the right documentation is not provided in advance
• Loading should not be undertaken if the documentation does not look sound
• Loading should be stopped if there is a possible problem
• Competent Surveyors with requisite local knowledge should be used every time

The extra cost and time should not be a deterrent: the consequences of a problem in terms of money and possible loss of life are simply to severe.

A Dollar saved can be many Dollars lost.

Advice to Owners
The most important starting point is to ensure that your charterparty clearly states:

• Only safe cargoes may be loaded
• They must always be loaded in strict conformity with the BC Code (and indeed any other applicable regulations and guidelines)
• All necessary documentation must be provided prior to commencement of loading, and failure in this regard allows the Master to refuse loading, but with hire / laytime / demurrage continuing
• Certificates must be produced by recognised reputable Testing Facilities
• Require a pre-loading survey to be carried out at Charterers’ time, risk and cost

The next step is to ensure the Master and the Officers are fully briefed and clued up about the problem. They must be sufficiently robust not to be fobbed off with empty promises by local Agents about the late provision of documentation or buckle under pressure from the Shore side - if in doubt the Master should contact the Clubs’ Correspondent immediately for quick help and back up.

The Master should carefully examine any documentation provided - monitor the loading and raise any issues before departure with Owners, and in case of urgency with the local Correspondent. Just because it looks OK does not mean it is. The Master should do a can test (see BC Code).

Advice to Charterers
As a Charterers, the key is to ensure that obligations owed to Owners in relation to the cargo to be loaded are fully Back to Back (BTB) down the charter chain and also apply in respect of any COA, fixture note, other Shipment Contract or indeed any direct sales / purchase arrangement with the Shipper. If you are not BTB you can get caught out both ways, will suffer a big loss, and can recover it from nobody. Being caught in the middle and squeezed from two sides is the worst place to be. You cannot win.

The Charterer needs to know that under the law it will have a clear duty to only load safe cargo, indeed under normal NYPE 1946 provisions the Charterers bears all the risk in relation to the cargo safety, loading and stowage. Case law has shown the Master has little or no responsibility to intervene and the consequences may land 100% with the Charterer even if the Master could have positively intervened to prevent the problem. This places a very significant onus on the Charterer.

The primary onus will be on the Charterer, and loss prevention here is worth its weight in Gold. The extra cost and time to do this right, prevents the Charterer from having to suffer the loss of possibly serious delay (in one case the vessel was stuck for 3 months with a partially loaded, liquefying cargo), extra cargo handling costs (for discharge of the unsafe cargo) and indeed risks liability for the full value of the vessel, the cargo and the loss of life should a tragedy occur : and this has already happened.

This is simple one of those cases where safe is better than sorry.

How Can Skuld Help?
Skuld’s Claims Handlers and Technical Services have a wealth of experience dealing with this type of problem. Our local Correspondents, Surveyors and Experts are equally experienced and can give quick pro-active help very quickly to solve even the trickiest issues.