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How to avoid cargo claim onboard chemical tanker

Liquid Cargoes are valuable, tradable commodities. Thus, the ownership of a particular parcel of Chemical cargo may keep changing. Temporary owners seek to protect the interest of their cargo. Hence the chance of a cargo claim against the ship owner is high. The Master must protect the interest of the cargo owner by handing over the cargo to the rightful owner, when the receiver produces the original Bill of Lading. Otherwise, the Charterers must provide the Owners / Master with suitable guarantees. Unloading must not commence without authorization from the owners, or without sighting original B/L. The Company must be notified if any of the two is missing.

Negotiating B/L Claims: These claims may be used in discrepancy between the B/L figure and Ship's arrival figure at the unloading port. Claims may also result in case of discrepancy between the B/L figure and Shore out-turn figure.

chemical tanker navigation at sea
There might be claims due lack of ship's “experience factor. B/L figure might be in a close approximation of the ship's figure at load port, but the claim might be for ‘in transit loss'. The cause of which must be established by re-checking ballast on board, adjacent tanks, draughts and trim, rechecking of ullages, Cargo temperature at different ullages, use of different thermometers and cargo recalculation.
The accuracy of tank calibrations, measuring methods and equipment should be considered in these circumstances. If discrepancy still exists, a 'Letter of Protest' must be issued, especially if it is over 0.5%.

Cargo Retention On Board Clauses: These clauses are generally not found in voyage charter parties. If pumpable cargo remains on board after unloading, then claims may be made against the vessel. To avoid this, remaining cargo should be within the limits permitted by the C/P. Hence, the need for adequate stripping and draining.

Dead freight claim and exceeding the maximum agreed quantity: In the event that the shippers are unable to supply the quantity nominated in the Notice of Readiness - deadfreight must be claim against the Charterers. If the maximum agreed cargo quantity is exceeded (min/max, upper margin limit) by no more than 1%, this can be accepted. If the limit is exceeded, the management office must be informed immediately that necessary steps can be taken.

Modern Chemical tanker hellespont credo underway
Fig:Modern Chemical tanker hellespont credo underway

Cargo Off-specification: Maximum claims on Chemical tankers occur due to quality not quantity. Cargoes are subjected to tests, like Spectrometry, colour test, etc. At times, parcels get mixed, for reasons like moisture, overheating, improper heating, self-reaction, reaction with tank material, other cargoes etc. Hence, the need for proper cargo planning, to ensure the properties of cargo are compatible with the various contacts within the tank. Sufficient samples must be taken and be sealed, signed by the Chief Officer and the terminal representative, stored for retention or testing, as required and not disposed off, until expressly instructed in writing by the Company.

Slow Loading and Discharging Rate: Depending on the total time for loading, a suitable protest is to be directed to the Shipper if the loading rate is much too slow. The C/P may contain a provision guaranteeing a certain rate of unloading and/or the discharge pressure. This must be met. Lost time will result in a claim against the vessel.

Failure of Cargo Tank inspection: Tanks are inspected prior to loading. Failure of tank inspection or the first foot sample will result in off-hire of the vessel and may also lead to loss of profits. Hence tank cleaning and the tank inspection must be thorough. To protect against possible cargo claims it is very important that cargo sampling is correctly carried out

These are few claims that frequently apply to a chemical tanker. Additionally, certain other claims, such as sea performance, unaccounted delays in port, equipment failure etc. may also arise and the vessel needs to be careful. A prudent Master will identify all areas of claims, for a particular cargo/voyage and take effective steps to protect the ship owner's interest.

Claim Against Poor Handling of Liquid Natural Oil

Liquid Natural Oils, Fats, and Fatty Stocks that include crude vegetable, animal, and marine oils need special care while carrying at sea. Some of the liquid are edible, and others are used to produce soap, paint, lacquer, cosmetics, and medicines. When chemical tankers carry these products, various difficulties may be encountered, the causes of which generally fall into two classes:
  • Handling (usually temperature control)
  • contamination.
Temperature Control

Claims often arise that involve allegations of poor treatment by ships. It is sometimes required to apply heat to these cargoes as, during a sea passage, the temperatures met are likely to be lower than those recommended by the shippers. Many products of this type are unfavorably affected by heating, so some deterioration is unavoidable. The extent of the loss depends on the nature of the product and trip duration.

Inadequate temperature control can induce additional deterioration, usually, because the carrying temperature has been too high for all or part of the journey. It is likely to estimate the level of inevitable damage, so the extent of further damage caused by inadequate temperature control can be calculated.

Damage may also occur if the carrying temperature is allowed to fall below that recommended by the shippers. The standard procedure for heating this type of product is through heating coils at the tank bottoms and lower sides, with heat being conveyed throughout the oil, mainly by convection current. The heat transferal becomes progressively less effective as viscosity increases. The viscosity of liquid natural fatty products is greatly influenced by temperature, and a reduction of only a few degrees can have a severe effect. If the heating process is failing to maintain sufficient fluidity within the bulk of cargo, the liquid in the heating coils' vicinity can become overheated.

During unloading operation of cargo, if the environmental temperatures are very low, further problems may arise due to solidification, which most commonly occurs when a tank is almost empty & the liquid level has decreased below the level of the heating coils. Under such circumstances, the final trash may be removed by sweeping or by steam stripping, provided the receivers can accept the fat and water mixture produced. While discharging heated products in cold environments, the Master should ensure that the maximum pumping rate is maintained and no breaks during discharge.

Dealing with Claims due Product Contamination

The most common contaminant resulting in claims is water, introducing from shore or ship tanks, pumps or lines at the time of loading, or by mistake or due to leakage. Some products contain a significant quantity of water when shipped, but the presence of excess water in others may quicken deterioration.

Traders and governmental agencies also have concerns about the contamination of edible products by particles of chemical substances. Often, but not always, these contaminants have come from residues of prior cargoes.

It is a regular practice for samples to be drawn by independent surveyors during loading, or immediately after upload, and at least one set of these samples will be given to the ship. The ship must have a collection of loading samples since most claims are based upon differences in analytical parameters in samples drawn at loading and discharge. If the Master is instructed to produce a set of samples to cargo receivers on arrival at the discharge port, it is recommended to request shippers to provide a second set of samples for shipowners. Any such samples handed to the ship should be appropriately stored during the voyage, preferably in a refrigerated store.

At the time of discharge, samples are always drawn by the receivers or their surveyors. Typical analyses conducted at both load ports and discharge ports are quite straightforward. The standard parameters determined are water, free fatty acid, unsaponifiable matter, and odor. If there is evidence or suspicion that, on delivery, the cargo does not conform to either a specification or to the loading samples, a more detailed chemical analysis may be conducted. Contaminants can be identified and determined at levels as low as ten parts per billion (ppb); contamination will result from an admixture of 10 g of contaminant with 1,000 t of cargo. The most chemical contaminant can be identified and determined at levels of 100 ppb, or 100 g per 1,000 t of cargo.

When cargo is loaded or transshipped, it is essential to consider the nature of previous shipments. In some cases, it is virtually impossible during tank cleaning to remove all traces of prior cargo to a level that is not detectable by modern laboratory equipment. Thus, restrictions are laid down in the contracts of sale regarding the immediate previous shipment carried in each of the ship's tanks. Shippers and charterers should be notified in good time of the three previous cargoes' nature carried in each tank. International agencies like FOSFA and NIOP impose restrictions, and their rules should always be consulted. They are constantly under review and may change in the future.

It is essential that, before loading, every care and attention is paid to the proper preparation of tanks, pumps, and pipelines. It is crucial that the tank coating is maintained to a high standard. The layer covering all sections of the tank must be sound because, where any breakdown of the coating occurs, mainly where epoxy and polyurethane coatings are concerned, there is a risk that previous cargoes' remains may accumulate, creating a potential source of contamination. The breakdown of epoxy coating usually manifests itself in open or closed blisters, forming pockets that cannot be reached by cleaning water. In these areas, there is also a hazard that rust may develop, which is again likely to trap cargo residues and lead to contamination.

It is not possible to properly clean tanks with damaged coatings and incidents have been recorded where traces of the previous third cargo have been found when samples of faded coatings were tested.

Another possible contamination source is the penetration and softening of epoxy and polyurethane coating by a previous cargo, which may then find its way later into newly loaded products. Masters should always discuss the cargo resistance list provided by the tank coating manufacturers, which will list cargoes to which the tank coating is resistant. For shipments not included in the list, or for loads without resistance indicators, or when differing from the maximum temperatures indicated on the list, the manufacturers should always be consulted.

The Cargo and carriers obligation under rules

In addition to the obligation to take good care to make the ship seaworthy, the "carriage of goods at sea " Rules also impose an obligation on the carrier to take good care to look after the cargo from the time it is entrusted to him until the itme that it is delivered to the receiver (see Hague Rules, Article III, rule 2). If the cargo, at the time of delivery, is lost or damaged, the carrier will be called upon to explain how the loss or damage occurred.

The period of time during which the carrier must take good care of the cargo can only be determined by looking at many different factors. The relevant contracts (for example, the charter-party and bill of lading) will usually determine the period of time during which the carrier remains responsible for the cargo. However, local laws may override or refuse to recognise contractual provisions which conflict with local regulations or practice.

The obligation on the carrier is to do everything necessary to deliver the cargo to the receiver in as good condition as when it was entrusted to the carrier. The carrier, therefore, must ensure that all cargo handling operations, including the loading, stowing, carrying, and discharging, are done properly and carefully.

Moreover, the carrier must ensure that the cargo is properly cared for and kept so that the condition of the cargo is maintained. The Master should be fully aware of any special attention that the cargo may require. Information and instructions with regard to the treatment of cargo should be sought in writing from the shipper. If the Master has any reservations about his information, he should request the assistance of owners or their local agents who may appoint an independent surveyor, or expert.

The carrier may be held responsible for any problems which arise out of any of the cargo handling operations which he has contracted to undertake or arrange. In addition, the carrier will be held responsible for any cargo handling operation for which, under the local laws, he is primarily responsible, whether or not he has contractually undertake to do these operations. Therefore, it is essential that the Master is aware of the local laws, custom, and practices as well as the provisions in the relevant contracts which relate to cargo handling operations. The owners" local agents or local P&I correspondents should be able to advise him of local laws which dictate that particular cargo operations fall within the carrier"s responsibility.

If a particular cargo handling operation, which is the carrier"s responsibility, is not carried out properly, the carrier will be unable to avoid liability if loss or damage occurs to the cargo even if the Master inserts into the statement of facts an endorsement stating that the carrier is not responsible. Such endorsements may be of evidential value for indemnity proceedings and the Master may note on the statement of facts or in correspondence any irregularities relating to the cargo handling operations.

The standard of care required of the carrier is independent of the usual custom or practice. The carrier"s obligation is to look after the cargo properly and carefully and it will be no defense to a claim for damage to say that the cargo was carried in accordance with usual practice.

In order to avoid liability if cargo is lost or damaged, the carrier will have to demonstrate that his obligation of caring for the cargo has been fully and properly discharged. Therefore, the Master must ensure that all cargo handling operations are accurately recorded and fully documented so that the carrier will be able to bring forward the evidence necessary to defend a claim.

Related info:

Handling self reactive chemicals

Handling of toxic chemical cargoes

Risk with noxious liquid cargo contact

The biggest risk of a chemical cargo spill

Restriction on discharge of cargo residues into sea from chemical tankers

Risk & hazards of chemical contamination onboard

Cargo handling safe practices onboard modern chemical tankers

Reference publications

  • Equipment Manufacturers Instruction Manuals
  • MARPOL ?73/78 (latest consolidated edition)
  • International Safety Guide for Oil Tankers and Terminals (ISGOTT)
  • CFR 33 parts 125 to 199
  • Ship to Ship Transfer Guide (Petroleum)
  • MSDS for particular cargo carried
  • Chemical Tank Cleaning Guide

More info:

Determining Sulphur contamination (sulphides) in chemical cargo

Chloride contamination in chemical cargo - how to resolve?

APHA (Hazen) method for determining color of very light chemical products

Loading, discharging & care of Phenol - Safety guideline

Hazards of Phenol - safe handling of Phenol on chemical tankers.

Handling benzene & methanol safety precautions

Personal protective equipments for carcinogens & cyanide-like cargoes onboard chemical tankers

Handling ACRYLONITRILE safety precautions

handling ISOCYANATES safety precautions

Loading, carrying & discharging of Sulphuric acid - regulatory requirements & special handling methods

Product characteristics & special arrangements for carrying Phenol onboard

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