ITIC Warns Ship Managers on Unsuitable Cargoes

ITIC has warned ship managers of the potentially severe financial implications of nominating unsuitable ships for the carriage of specific cargoes.

In the latest issue of its Claims Review, ITIC cites the case of a commercial ship manager which fixed a ship for a voyage of 4,000 metric tonnes of ammonium nitrate in large bags. This type of cargo had been carried by the manager’s fleet on several occasions, but the cargo had always previously been described as being in loose/bulk condition.

After the ship had loaded about 950 metric tonnes of cargo, port state control came aboard and stopped any further loading, as it was established that the ship had permission to load ammonium nitrate only in loose condition. After checking the position with the owners, the classification society and the flag state, it was confirmed that the ship which had been fixed was not suitable to load the ammonium nitrate in bags.

In order to keep costs to a minimum, the commercial manager fixed a different ship in its managed fleet for the same cargo, with the agreement of the charterers. The charterers then looked for reimbursement of the additional costs to the owners, who in turn held the manager liable. ITIC duly settled this claim on behalf of the manager.

Noting that the claim could have been significantly higher if a suitable substitute vessel had not been available, ITIC says that commercial managers need to be fully aware of all the limitations of ships under their management with regard to the carriage of particular cargoes. It emphasises that they need to pay careful attention to the detailed description of any cargo which they agree to commit their owners to in any charter party fixture.

ITIC, November 29, 2013

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