This overview of cargo claims has been provided by The Swedish Club
The Swedish Club has released a detailed analysis of cargo claims in relation to grains and soya beans having reviewed 200 bulk carrier claims. To be included in the statistics the claims had to have generated a cost of at least $5,000 and have been made between 2018 and 2022.
The average frequency for the five-year period is 0.056, which means that 5.6% of all bulk carriers have made a grain claim. Since 2019 the Club has seen a steady increase in the frequency of claims.
Grains
During the five year period of the report the most common claims were for shortage (63%) especially during discharge (68%) and these were seen most commonly in North Africa and China.
About 70% of shortage claims occur due to discrepancies between the vessel’s figures and shore figures. In this five-year period there were few claims in China until 2021, but since then Swedish Club said that it had seen a steady increase in the region. Over the entire five-year period, however, most claims were in North Africa.
The increase of claims in China over the last couple of years could be related to the pandemic, Swedish Club said. The severe lockdowns that were seen in many cases delayed the vessel. They also made it difficult for surveyors to attend the vessel for inspection. Crew and stevedores were also more hesitant to interact with each other because of the risk of becoming infected. This led to the crew not being able to verify the cargo operation and taking draft figures. The Club said that it had seen a similar picture with soya bean claims.
Shortage contributed to 44% of the total claims cost, with an average claim cost of $35,000. Although shortage claims appeared to be of relatively low value, the aggregate cost of these claims was significant.
Non contribution towards General Average (GA) contributions made up 20% of the total cost. The average claim cost was $800,000, but this type of claim was not common.
Wet damage made up 13% of the total cost, with an average claim cost of $37,000.
Most cargo claims occurred at the discharge port. These contributed to 68% of all claims and were mainly driven by shortage. Claims during the voyage accounted for 16%, with only 10% of claims taking place in the loading port.
The Club noted specific-country issues:
– In Argentina, mate’s receipts were customarily presented to the Master by the shippers. The exporter (or importer when applicable) had the right to choose the weighing method for fiscal/ customs purposes. In the case of bulk agricultural exports, the method chosen would invariably be the use of shore scales. The Club observed that it was not unusual to have discrepancies between the shipper’s figures based on shore scales and draft surveys. In general, whenever the shortage per draft surveys exceeded 0.5%, the Club recommends that the Master clauses the mate’s receipts (and bills of lading thereafter) with ship’s figures as the only way to be protected from shortage claims at the discharge port.
– In Tunisia and Algeria shortage claims often arose as a consequence of receivers not accepting the established trade allowance of 0.5% of the bill of lading quantity. Draft survey figures are not recognized in Algeria. In the event of a shortage, only the shore scale figures would be recognized by the local receivers. Calculation of the claims would be on that basis.
Any errors in manifests regarding quantity, or description of cargo, are subject to customs fines in Tunisia. If a spillage was experienced, the Club said that the crew should record details of the spillage and check the calibration and accuracy of the shore scale. “Take photographs of the cargo spillage from the grabs, hoppers and trucks”, the Club advised.
Soya beans
The global trade of soya beans has undergone continued expansion in recent times, in part due to the increasing demand in China, the largest soya bean importer, for animal feed. The largest soya bean exporters are Brazil and USA, which account for around 80% of the global export market.
The frequency for the five-year period saw 1.1% of all bulk carriers place a soya bean claim. The average claim cost was $54,000. The pandemic had an impact, with vessels forced to stay at anchor for extensive periods. These delays could lead to heat damage – a significant concern with soya bean cargoes.
The most common claim was for shortage at 29%, followed by spontaneous heating at 19% and contamination at 16%.
When compared with grains, shortage made up a considerably smaller percentage of claims (29% vs 44%). This was partly a trading issue, but in addition the statistics were influenced by Covid-related delays.
Spontaneous heating accounted for 41% of the Club’s total cargo claims cost in this category, with an average claim cost of $115,000. Shortage made up 16% of the total cost, with an average claim cost of $29,000. Physical damage contributed to 13% of the total cost, with an average claim cost of $103,000.
The most common cause of damage claim was damage prior to loading, at 23% of total claims. When considering the damage that leads to these claims, 43% of these claims were observed in the loading port, 29% during the voyage, and 14% at the discharge port.
The second most common cause was inherent vice, at 19%. This manifests at the discharge port 50% of the time and during the voyage at 33%.
The third cause was improper cargo handling ship side, at 16%. This category of claim relates to heating damage and wet damage, often caused by rain during loading and discharge.
