- The Yantian Express fire has prompted Hapag Lloyd to levy a penalty charge of $15,000 on any shipper who misdeclares dangerous cargoes loaded in containers.
- According to the Cargo Incident Notification System (CINS), nearly 25% of all serious incidents onboard containerships are attributable to misdeclared cargo.
- Companies such as OOCL, HMM, Maersk, shippers, and insurers have come in support of levying fines for misdeclared dangerous and hazardous cargo.
- If found guilty, the container could be put out of service and the cargo might be put on hold where penalties may be imposed, and charges associated with the misdeclaration would be levied on the shipper’s account.
- Around 5-10% of an average container ship’s cargo is declared as hazardous goods and approximately 12% of global container trade comprises dangerous goods.
According to an article published in Spalsh247, with misdeclared hazardous cargoes sparking many dangerous fires on box ships around the world.
Fines to be imposed
Germany’s topliner has taken severe action – imposing a fine of $15,000 per the wrong container. Hapag-Lloyd suffered a high profile fire on of its ships, Yantian Express, earlier this year, that raged for weeks and caused millions of dollars of damage. The new fines system comes into play from September 15.
“To ensure the safety of our crew, ships and other cargo onboard, Hapag-Lloyd holds the Shipper liable and responsible for all costs and consequences related to violations, fines, damages, incidents, claims and corrective measures resulting from cases of undeclared or misdeclared cargoes,” the German carrier stated in a note to clients.
Shortly after Hapag Lloyd made its announcement so Hyundai Merchant Marine (HMM) said it was instituting exactly the same penalty, specifically aimed at Chinese exporters. Undeclared fireworks have always been a concern for the lines and Maersk has said it will also be penalizing offenders.
Plans to crackdown on misdeclared and hazardous cargo
Hong Kong’s Orient Overseas Container Line (OOCL), now a unit of China-based Cosco, also detailed plans yesterday to crack down on misdeclared dangerous and hazardous cargo.
OOCL said in a notice to customers that “we are aware that there had been an increasing number of marine incidents being reported in 2019, many of which were suspected of potentially carrying un-declared and/or misdeclared hazardous cargo”, adding that “to ensure safety compliance onshore and at sea is met, OOCL will strengthen its Dangerous Cargo acceptance and container inspection policy by imposing additional verification before loading through selective or random inspections on dangerous goods and potentially dangerous goods cargo.”
Hazardous Cargo Misdeclaration Fee
OOCL said any inconsistencies between the declared cargo in the documents and what was physically inside the container would result in a Hazardous Cargo Misdeclaration Fee, without indicating how severe the fine would be. The carriage of dangerous goods in the packaged form must comply with the relevant provisions of the International Maritime Dangerous Goods (IMDG) Code which is considered an extension to the provisions of SOLAS chapter VII.
Depending on the type of deficiencies found in such a shipment, the container could be put out of service and the cargo might be put on hold where penalties may be imposed, and charges associated with the misdeclaration would be on the shipper’s account.
While the exact breakdown of cargo contents varies by container, it’s well known that at any given time, between 5-10% of an average container ship’s cargo is declared as hazardous goods and approximately 12% of global container trade comprises dangerous goods. However, it’s nearly impossible to know how much dangerous cargo is undeclared, or misdeclared.
Initiative welcomed by shippers
Commenting on the news from Hapag-Lloyd, Andy Lane, a container shipping consultant based in Singapore, applauded the initiative and urged other liners to follow suit. “The booking party is not always the payer, so they will need to ensure that the penalties are imposed or else it can become a toothless tiger. $15,000 will not cover the cost of accidents, but it might cover the cost of inspections and enforcement. All shippers should embrace this, as 99.9% suffer today due to errant actions of the 0.1%. The other carriers will need – and should – follow suit, as those errant shippers who consciously fail to declare will direct this scourge elsewhere. The is no priority higher than the crew, ship and cargo safety,” Lane told.
Need for new solutions
Splash lead columnist Andrew Craig-Bennett has repeatedly urged for a different solution to solve the scourge of fires caused by dangerous goods. Craig-Bennett has called on all liners to stop charging higher prices to carry dangerous goods.
“The incentive for shippers to lie disappears as soon as this is done. Yes, the shippers of harmless cargo will be subsiding the shippers of dangerous goods. But their own cargo will be more likely to arrive,” Craig-Bennett wrote in an earlier opinion piece.
Insurers welcome move
The statements were welcomed by insurers and the TT Club said it welcomed such initiatives after growing concerns about the lax cargo packing practices and erroneous, sometimes fraudulent, declaration of cargoes. Under the banners ‘Cargo Integrity’ and #Fit4Freight, TT Club has been collaborating with stakeholders through the freight supply chain to highlight on-going risks, including severe ship fires, arising from poorly packed and declared cargo.
Peregrine Storrs-Fox, TT Club’s Risk Management Director commented: “Clearly, the shipper has the primary responsibility to declare fully and honestly so that carriers are able to take appropriate actions to achieve safe transport. Since this is not always the case, carriers have to put in place increasingly sophisticated and costly control mechanisms to ‘know their customers’, screen booking information and physically inspect shipments.”
He further added, “Equally, carriers have the opportunity to review any barriers to accurate shipment declaration, including minimizing any unnecessary restrictions and surcharges. Penalizing shippers where deficiencies are found should be applauded. Furthermore, government enforcement agencies are encouraged to take appropriate action under national or international regulations to deter poor practices further.”
Improvisation of safety culture in the maritime industry
TT Club says its Cargo Integrity campaign seeks not only to promote awareness of the good practice, such as set out in the CTU Code, but also to reveal the plethora of influences from both direct and indirect stakeholders within the supply chain that result in behaviors leading to dangerous incidents on land or at sea.
Storrs-Fox continues: “A key element of the campaign is to identify levers – both sticks and carrots – that are available to improve safety culture in container transport, including considering unintended consequences inherent in trading arrangements or fiscal/security interventions and the possibilities presented by technological innovation.”
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Source: Splash247
