by Kenji Koike, MIIMS
There are many kinds of dry bulk cargoes traded worldwide, but the main cargoes are iron ore, coal and grains.
The method of determining the trading quantity for these trades is a ship draft survey or a shore scale, and which one to adopt depends on the contract between the shipper and the consignee, but in practice it is generally determined by the type of cargo. Usually, a draft survey is used for iron ore and coal, and a shore scale is used for grains.
In this report, we would like to pick up shortage claims about grain cargo that are occurring frequently around the world and propose improvement measures.
Outline
The annual trade volume of grain at sea is about six hundred million tons. The main export countries are US, Argentina, Brazil, EU, etc. Meanwhile, the main importing countries are China, EU, Japan, Mexico, etc. The trading quantity of grain is generally determined by a shore scale at loading and discharging, and the shore scale figure at loading is the quantity noted on the Bill of Lading (B/L quantity). If the shortage of the discharged quantity exceeds 0.5% (Trade Allowance) of the BL quantity, it is common business practice for the consignee to file a damage claim against the carrier.
In Japan, the compensation for the loss damage is paid once by cargo insurance, and then the insurer generally seeks subrogation from the carrier. However, the shortage insurance is a special clause for cargo insurance, and the insurance condition is generally “Excess 0.3%.” I would like to give specific examples below and consider specific improvement measures based on the causes of grain cargo shortage claims.
Specific examples for shortage claim of grain cargo
Suppose that in exporting country A, 50,000 tons of corn in bulk is loaded on a Handymax type vessel and transported to importing country J, and importing country J has three unloading ports, and the planned unloading quantity at each port is 20,000 tons at the first port, 15,000 tons at the second port, and 15,000 tons at the third port.
The following abbreviations are used to make the explanation easier to understand…
Grain Terminal at loading port : LT
Grain terminal at loading port Grain terminal at the first port of discharge : DT1
Grain terminal at the second port of discharge : DT2
Grain terminal at the third port of discharge : DT3
- Corn in bulk was loaded onto the vessel at LT, and its loading was weighted at 50,000 tons on the shore scale of LT, which was B/L quantity.
- The vessel arrived at the discharge country J, was discharged at the first port, and was weighed at 20,000 tons by the shore scale of DT1.
- Next, it was unloaded at DT2 of the second port and weighed to 15,000 tons by the shore scale of DT2.
- Finally, the cargo was unloaded at DT3 of the third port, and the result of the DT3 shore scale was 14,750 tons, 250 tons less than the planned 15,000 tons. Since the shortage of 250 tons exceeds 0.5% of the B/L quantity, the consignee files a claim for damages against the carrier for the shortage
Cause of the shortage claims
From the example above, the probable causes of shortage claims are:
- Insufficient quantity of cargo shipped from LT
- Evaporation of moisture in grain cargo during transportation from LT to DT1
- Handling loss (dust loss) during loading / unloading
- Some cargo remained in the hold due to cargo damage such as cargo contamination
- Cargo exceeding the planned quantity was discharged at DT1 and DT2
Verification of the cause
- Regarding 1 and 5 above, all figures are the shore scale quantities of loading and unloading ports, and since there were no draft survey quantities this time, it is not possible to compare and verify the figures, but the following points can be clearly stated. The shore scale itself was not the same as the shore scale of LT that weighed the loading quantity and the shore scale of DT1, DT2 and DT3 that weighed the quantity at the ports of discharge. Therefore, the weighted quantity results of different scales will always result in quantity differences.
- Regarding 2 above, we believe that there was almost no evaporation of moisture in the cargo due to measures to control the temperature and humidity of the loaded cargo at the loading port and measures to prevent sweating in the hold due to natural ventilation during transportation.
- Regarding 4 above, considering the current status of the ship loader at the loading port and the ship unloader at the unloading port, we believe that there was almost no dust loss during grain cargo handling.
- Regarding 5 above, during the final dredging at each hold, heavy rust scales from the hold tank top plates did not mix with the cargo, and there was no contamination damage remained on the vessel. Based on the above verification, it is believed that the shortage claims this time is mainly due to the reasons 1 and 5 above.
Specific improvement measures for shortage claims
Judging from the above marine logistic, only draft survey can weigh the amount of cargo on board on the same scale for both loading and unloading.
However, the draft survey quantity is affected by the weather and sea conditions at that time because it is calculated by reading the draft marks of the vessel floating on the water.
In addition, since the sea density around the vessel varies depending on the sea area, it is necessary to use a unified calibrated hydrometer at both the loading and unloading ports.
In other words, it is impossible to fundamentally improve the shortage claims that occur between the loading and unloading ports unless draft surveys are conducted after scientifically making the various work environment changes that have been occurring at the loading and unloading sites into the same working environment.
Based on the above, we propose the following as specific measures to improve shortage claims:
(1) Draft reading device (KENDRAFT ©) should be used at both ports of loading and unloading to obtain the same readings no matter when, where, or by whom, under any weather and sea conditions. With KENDRAFT, you could keep reliably the difference in draft mark readings between the loading and unloading ports to within 1 cm at any time. For a Handymax type vessel, the TPC (tons per centimeter) is about fifty tons, so it is possible to keep it within 0.1 percentage of the B/L quantity.
(2) There are two types of seawater hydrometers used in the world:
- Hydrometer for measuring relative density: J type (tentative name)
- Hydrometer for measuring apparent density: Z type (tentative name)
The above two types of hydrometers are mixed and used all over the world because there is no clear international standard on which one to use. The actual measured value difference is 0.002, resulting in a quantity difference of one hundred tons for a loaded cargo of 50,000 tons. We will use the same type of calibrated seawater hydrometer at loading and unloading ports to eliminate quantity differences due to different hydrometers.
By introducing the above two new verification schemes (consistent survey of loading and unloading) into the existing grain marine transportation logistics, we will specify the point where the shortage loss occurs and constantly improve the shortage loss to within 0.3% of the B/L quantity.
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