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Transport Guidance for Steel Cargoes THE AMERICAN CLUB Transport Guidance for S

Transport Guidance for Steel Cargoes THE AMERICAN CLUB Transport Guidance for Steel Cargoes American Club: Transport Guidance for Steel Cargoes 3 Table of Contents Foreword 6 Preface 7 Contributors and Acknowledgments 8 Disclaimer 8 1. Introduction 1.1 Objective 10 1.2 Hazards and types of damages and claims for steel cargoes 10 1.3 P&I claims profile for steel cargoes (2000 to 2015) 11 1.4 Objectives of the Transport Guidance for Steel Cargoes 11 2. Condition of the vessel 20 2.1 Objectives 20 2.2 General 20 2.3 Hatch covers, cranes, ventilation and other systems 20 2.4 Use of marine tape 23 2.5 Cleaning of the vessel cargo holds 23 2.6 Safety of the vessel cargo hold access and workspaces 24 3. Types of steel cargoes 30 3.1 Objectives 30 3.2 Types of steel cargoes, descriptions and general stowage considerations 30 4. Dunnage for steel cargoes 38 4.1 Objectives 38 4.2 Purpose of dunnage for steel cargoes 38 4.3 Dunnage use by cargo type 38 American Club: Transport Guidance for Steel Cargoes 4 5. Stowage and securing of steel cargoes 44 5.1 Objectives 44 5.2 Principles of proper stowage and securing 44 5.3 The stowage plan 44 5.4 Preparation of holds for stowage 45 5.5 Stowage principles by cargo type 45 5.6 Documenting the condition of cargo upon arrival onboard the vessel 51 5.7 Securing and lashing of steel cargoes 51 5.8 Crew role in ensuring proper stowage and securing prior to departure 53 5.9 Surveyor’s role in ensuring proper stowage and securing 53 6. Ventilation of steel cargoes 63 6.1 Objectives 63 6.2 Purpose of ventilation 63 6.3 Condensation due to “sweat” 63 6.4 Comparison of dew points 64 6.5 Comparison of temperatures 66 6.6 When to ventilate—Rules 66 6.7 Systems of ventilation 66 6.8 Ventilation of steel cargoes 67 6.9 Cargo humidity and ventilation testing: Example of best practices 68 7. Precautions during loading, transit and discharge 72 7.1 Objectives 72 7.2 Cargo operations procedures 72 8. Cargo surveying 78 8.1 Objectives 78 8.2 General 78 American Club: Transport Guidance for Steel Cargoes 5 8.3 Condition of cargo upon arrival onboard the vessel 78 8.4 Vessel and cargo surveying prior to and during loading 79 8.5 Condition of the cargo hold, hatch covers and ventilation system 82 8.6 Cargo stowage and lashing 81 8.7 Cargo condition: pre-load and aboard the vessel 82 9. Charter party and bill of lading considerations 83 9.1 Objectives 83 9.2 Charter party considerations 83 9.3 Bill of lading considerations 86 9.4 Burden of proof and the Retla clause 88 9.5 Further considerations regarding California Block Stowage 89 10. Communicate with your P&I club 90 10.1 Objectives 90 10.2 Precautionary pre-load survey arrangements 90 10.3 Discharge port survey arrangements 91 10.4 Cargo claims 91 10.5 Demands for security 92 10.6 Sanctions considerations 92 Appendices Appendix 1: List of definitions 93 Appendix 2: List of important documents to be kept and maintained 94 Appendix 3: Steel cargo reference material 95 Appendix 4: A sample of a bill of lading 96 American Club: Transport Guidance for Steel Cargoes 6 Foreword The handling of steel cargoes has been a perennial focus of P&I loss prevention activity. Their susceptibility to pre-loading, stowage and post-discharge damage, and the difficulties of dealing with attendant claims, has been a special concern for clubs from at least the 1970s. As my colleagues Dr. Bill Moore and George Tsimis observe in their preface, the volume of finished and semi-finished steel products carried by sea has grown considerably over the years. Claims in respect of such cargoes have long represented a significant element of the American Club’s overall exposure, circumstances shared by other marine insurers. In earlier times, initiatives to deflect or mitigate losses arising from damage to steel were more rudimentary than they are today. Many of these precautionary measures – a requirement for pre-loading surveys, for proper clausing of bills of lading and so on – are still part of best practice. However, in expanding on the principle of prevention being better than cure, this Transport Guidance for Steel Cargoes seeks to provide a comprehensive overview of how to avoid claims arising from the carriage of these cargoes from a variety of related perspectives. Thanks are due to all those who have labored so diligently, and to such considerable effect, in the production of this guidance. It adds to the substantial body of loss prevention material available from the American Club as part of its overall mission to promote best industry practices. It is hoped that it will be of assistance not only to Members, and to the Club’s many other friends across the world, but also to the larger shipping industry as a valuable source of reference to all who have an interest in this important trade. Joseph E. M. Hughes Chairman & CEO Shipowners Claims Bureau, Inc. New York, New York American Club: Transport Guidance for Steel Cargoes 7 Preface Steel production has been at the core of industrial societies from the mid-19th century and into the 21st century. The industrial revolution has led to an exponential growth in global steel production from 189 million tonnes in 1950, to a peak of 1,621 million tonnes in 2014. In 2015, approximately 464 million tonnes of finished and semi-finished steel products were sent for export, the highest volume ever exported representing 31% of all steel produced that year. As these trade figures demonstrate, steel and steel products continue to be key commodities of today’s global economy. The importation and exportation of steel cargoes are needed to fuel economic growth. The shipping industry, of course, plays a central and pivotal role in safely and efficiently transporting steel cargoes around the world to meet the import and export needs of industrialized nations and emerging markets alike. Cargo claims have comprised, on average, about 25% of the American Club’s total claims exposure and, since 2002; steel cargo claims make up approximately 10% of this category. In 2002, the American Club took its first major step in the context of steel cargoes when it began sharing the costs of precautionary steel pre-load cargo surveys with its Member- ship and set forth extensive recommendations for conducting precautionary surveys of certain steel cargoes to minimize the prospect of spurious steel cargo claims. Between 2002 and 2008, the average cost per steel cargo claim was US$ 31,910 per incident. Since then, the average cost has dipped below US$ 17,000 per incident. It would appear that the American Club’s proactive and cooperative approach with its Membership during the post-2002 period yielded fruit, culminating in further loss prevention efforts for the Membership at large. In 2014, the American Club updated its advice on steel cargo pre-load surveys and provided additional guidance for the prevention of steel cargo and claims. With this backdrop, the American Club is pleased to present, Transport Guidance for Steel Cargoes, which addresses the carriage and shipment of steel cargoes by sea. This guidance draws upon the knowledge and experience that the American Club has derived from its own claims, from those who are engaged in the operation and/or chartering of vessels for the carriage of steel cargoes, and from surveyors regularly instructed to attend steel cargo loadings and discharges. It is our objective and hope that this guidance will increase awareness regarding all aspects of the carriage and shipment of steel cargoes, and that it will ultimately become a useful resource for all in this trade. Members are also encouraged to refer to the American Club’s website at www.american-club.com where additional pictures, animations, circulars, alerts, and other relevant information can be found. William H. Moore, Dr. Eng. Senior Vice President -- Loss Prevention Shipowners Claims Bureau, Inc. New York, New York George J. Tsimis Senior Vice President -- Claims Director Shipowners Claims Bureau, Inc. New York, New York American Club: Transport Guidance for Steel Cargoes 8 Contributors & Acknowledgments The American Club would like to thank Messrs. William Pallas, Freehill, Hogan & Mahar, LLP; Mssrs. Jeroen de Haas, Martijn de Vos and Thomas Hendrikx of BMT Surveys, B.V.; Mssrs. Charles Bliault and Dave Anderson of Brookes Bell, LLP; Mr. Tony Huang and Ms. Mirjana Küzma, Ph.D. of Andrew Moore & Associates, Ltd. for their valuable comments, review and contribution of most of the photographs; and Captain Robert Rayner and his dedicated staff at IDESS Interactive Technologies, Inc. for their contributions of pictures and animations for Transport Guidance for Steel Cargoes. We would also like to thank Captain Sanjive Nanda, John Poulson, Chf. Eng., Ms. Danielle Centeno, Ms. Boriana Farrar, Messrs. John Wilson, Sean Murphy, Richard Swan, and Richard Hamilton of the Shipowners Claims Bureau, Inc. for their dedication and professional expertise and assistance in bringing the Guidance and the associated website to fruition. The title page and cover art: Mr. John Steventon American Club: Transport Guidance for Steel Cargoes 9 Disclaimer The information presented in Transport Guidance for Steel Cargoes is for general guidance information purposes only. While the American Club makes every effort to ensure that the information contained uploads/Geographie/ steel-cargo-guide.pdf