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Welcome to the March 2014 edition of SEA Watch with more updates and commentary on what’s happening in the world of shipping and marine insurance.
First in line is some ‘home news’ on the new and exciting strategic alliance that has just been formed between SEAsia Claims Services and legal advisers and consultants, the C Solutions Group. The other key alliance partners include project cargo specialists, CSL Group and offshore surveyors and adjusters, Moore Energy Solutions. The concept is to build on existing synergies to create a highly skilled marine claims and loss prevention cluster to service the Asian and Global insurance and ship owner markets. The alliance partners are convinced that this is the way forward in a rapidly changing and increasingly cost conscious market. You can expect to see details of future plans and developments in the next issue of SEA Watch.
Next, we’d like to remind you about the upcoming courses being run this month by SEAsia’s sister company, SeaProf, and their academic partner, the BI Norwegian Business School. The 8th run of Key Elements of Shipping, is scheduled for 24-26 March (some seats are still available). SeaProf’s new course, Key Elements of Chartering, scheduled for 27-28 March, has now also been approved for MCF training grant support. The two courses can be taken together (with a further 10% discount) or separately. So have a look and don’t miss some top class maritime executive training designed to take you to the top of your game and beyond.
Our third article on hatch covers was prepared by our GM, Capt Kunal, who is now a Director of SEAsia. OK, we’ve done this subject before but here’s a new angle for you on the potential for sea water ingress into hatches that have evidently passed a UTS weather tightness test. How is this possible and what was the cause? Read on to learn something you may well not have known before and which could help you and your company to save a pile of money on cargo claims and Panadol.
Our fourth slot consists of another article from our Senior Claims Exec, Oliver Rentzow. Oliver’s focus this month is on the often misunderstood difference between the functions of a Seaway B/L and a “straight” B/L and the potentially very nasty and expensive consequences which can arise in relation to cargo delivery without presentation of the original B/L. If this doesn’t ring any instant alarm bells, then get your head into this article to find out how it works and how to make sure you don’t get caught with your metaphoric pants down.
Last but as always not least, we are pleased to provide our update on the SEAsia network team in Taiwan. SEAsia Taiwan, under its parent company’s name of G+I Surveyors and Consultants (headed by Mr Hubert Shoei), has been operating in Taiwan since 2004.Hubert’s marine survey and correspondent credentials go back 17 years. SEAsia Taiwan can provide assistance at all of Taiwan’s 7 major ports, as well as at numerous small outports, from their two fully manned offices in both Keeling and Kaohsiung.
Finally, well we’re now well into 2014 and no doubt the beatings and successes suffered during the P&I renewals will soon be analysed and in print. More on this in next month’s SEA Watch. Meantime, take care and read on.
We would like to hear from you as well. Is there a marine industry issue out there that’s puzzling or annoying you? Tell us about it by sending a note to firstname.lastname@example.org
New Strategic Alliance:
SEAsia, C Solutions, CSL Group and Moore Energy Solutions join forces to power regional marine services growth in Asia
A reception in Singapore took place recently at the Bank Bar & Bistro on Shenton Way to mark the occasion of the formation of a novel strategic alliance. The alliance partners are P&I correspondents SEAsia Claims Services, legal advisors C Solutions, project cargo consultants CSL Group and offshore surveyors and energy adjusters Moore Energy Solutions.
Each of the well known marine service alliance partner companies has its own maritime specialty. The key to the alliance is that they are all linked by a common thread: the provision of prompt response to marine incidents, effective claims control and the prevention of recurrence.
The plan for a formal alliance was hatched as a consequence of an office sharing arrangement between SEAsia and C Solutions during 2013. Common interests and support synergies were soon noted. Introductions to the other alliance partners, CSL Group and Moore Energy Solutions, then followed and the benefits of an alliance quickly identified.
The alliance will also serve to connect and access the regional and global networks operated by each of its partners. As such, SEAsia’s network, of what will soon be 23 offices in the Asia Pacific region, will connect with C Solutions’ headquarters at the Lloyd’s building in London as well as C Solutions’ other offices in Europe, the Middle East and Asia. Connections will also be created with CSL’s global network of 34 members and partners as well as Moore Energy’s headquarters based in Houston and their regional offices in Jakarta, Kuala Lumpur and Johor Bahru.
In a nutshell, the alliance’s focus will be to provide a cluster of globally accessible maritime expertise to benefit ship owners, charterers, shippers, offshore operators, insurers and all others who are faced with the need for effective loss prevention, pro-active incident control and economical claims resolution.
A short description of each of the alliance partner’s specialties and their presence is noted as below, along with website links.
SEAsia Claims Services (www.seasia-group.com) are long established P&I and transport liability correspondents and marine surveyors headquartered in Singapore with an Asia Pacific network which will soon expand from 20 to 23 regional offices.
C Solutions Group (www.csolutionslimited.com) is a global legal and claims consultancy staffed by lawyers, mariners, insurance professionals and arbitrators/mediators. Headquartered in the Lloyd’s Building in London, their network extends to Europe, Scandinavia, Dubai, India, Singapore, Shanghai and Hong Kong.
CSL Group (www.cslglobal.com) is a marine, technical and risk management company with a truly global presence comprising 34 network and franchised partners. CSL are world leaders in the provision of technical and logistical support in the high risk project cargo business and bring new skills to the alliance.
Moore Energy Solutions (www.jfmoore.com) is a joint venture between the J F Moore Group and C Solutions. Their specialist technical and adjusting skills, which support the offshore and energy sectors, complete the alliance’s knowledge cluster. Headquartered in Houston, the Group has fully staffed offices in Jakarta, Kuala Lumpur, Johor Bahru and now Singapore.
The reception was well attended and the photos show that a good time was enjoyed by all. Watch this space for more news of the alliance including its future plans and activities.
SEA Watch March 2014:
KES and KEC courses
SeaProf/BI Key Elements March 2014 courses are both filling up quickly
As expected, seats for the 8th run of the now iconic SeaProf/BI Norwegian Business School 3 day course Key Elements of Shipping (KES) are filling up fast. High profile marine industry companies who have already opted to send their promising employees include Rolls Royce Marine Services, ING Bank, Thome Ship Management, Odjfell Asia, Wilhelmsen, Nordea Bank, Siglar Offshore Services, M3 Marine, DNB Bank and many others. So don’t miss out and get your application in now. It’s easy and it’s a bargain with all of the fantastic Singapore government grant support available. Even better, you’ll have great time networking and sharing ideas and experiences with other people in the industry at the Klapson’s Hotel venue.
Bookings are also going well for our new 2 day Key Elements of Chartering (KEC) course. This is a New Key Elements course for SeaProf/BI but the content is honed and proven, being based on the NTU MSc chartering module delivered on campus last year by key speakers, Assoc Prof Cathrine Bjune and Ms Djeni Rolana, former COO of E Ships in Saudi Arabia.
The KEC course will cover the essential legal aspects of charter parties by way of ‘pitfall prevention’. However, the focus will be on the practical, money making part of the business of chartering together with proven techniques on optimizing profitability as provided by Djeni Rolana, a tough minded and highly respected charter market professional and consultant.
The KES and the KEC course are designed and timed such that they can be taken together (over a total of 5 days), or separately as a 3 day KES or a 2 day KEC course. The choice is yours but if you’re focused on chartering, then ideally, the two courses would be taken back to back to optimize the learning process as the Introduction to Chartering module is in fact a part of the KES course.
Full details of the KES and KEC courses, along with a registration form, detailed course content, speaker CV’s and other information, are available on the SeaProf website at www.seaprof.com
You can also speak to Jenn or Yan at +65 6323 7732 who will be pleased to help you.
We hope to see you on the KES and KEC courses. Or better still, on both!!
Weather tightness and hatch covers: what UTS tests may not reveal
Wet damage to cargo on board dry cargo vessels and bulk carriers is a recurring problem for P&I Clubs and their members. Most of the wet damage takes place due to ingress of seawater from the vessel’s hatch covers during heavy weather. According to the London P&I Club’s guide on Holds and Hatch Covers, leaks due to rubber seal failures contribute to over 30% of the large cargo claims by value.
This article is focused on typical “single fold” McGregor type hatch covers which have passed a UTS or hose test for weather tightness conducted when the vessel is in a static condition while in port. However, the same hatch covers will often fail to prevent seawater ingress due to the large bending moments and coaming deflections that are experienced during sea passages in adverse weather conditions. So why is this happening and what can be done to prevent it?
One of the likely causes we have identified relates to what is commonly known as “permanent set” or ‘grooving’ of the hatch cover rubber gaskets. The key question then is: “What is the allowable tolerance for permanent set as an indicator of the urgent need to renew the hatch rubbers”? And who sets the tolerance standard?
It is first important to understand the difference between the terms “design compression” and “permanent set” as these two terms can be easily confused.The design compression of typical sponge core packing rubber is the amount of compression that the hatch cover packing is designed to experience when it contacts the steel compression bar on the hatch coaming. This design compression is required to form a weather tight seal around the compression bar when the hatch cover is closed (with wheels up) and resting on the hatch cover steel support pads.
As to “permanent set”, the starting point is that when the hatch covers are raised, the rubber packing should decompress back to its nominal thickness. However, with time and constant use, the rubber packing loses its ability to decompress such that permanent grooves begin to appear and which will continue to deepen. This loss of rubber packing decompression (or thickness) is called the “permanent set” and this is where much of the problem with maintaining hatch weather tightness lies.
The illustrations of “design compression” and “permanent set” as below are reproduced by kind permission of John Fairclough of J.F. Marine from his 2007 paper on hatch covers. It can be anticipated that if the permanent set is the same depth as or exceeds the design compression, then the seal around the compression bar will be faulty and the hatch cover will likely leak during hull twisting and hatch cover distortion caused by heavy weather stresses.
Figure 1: Design Compression, Source: JF Marine Limited (2007)
Figure 2: Permanent set. Source: JF Marine Limited (2007)
Most hatch cover manufacturers provide the precise figure for design compression in their specification manual. However, in the on board absence of these manuals (which is not unusual) a well-recognised “rule of thumb” is to take 25% of the nominal (original) packing rubber thickness as being the design compression.
The tolerance for permanent set (requiring hatch rubber replacement) is considered by a number of industry leaders, including McGregor and several top IG Clubs, as being 50% of the design compression. As an example, for rubber of dimensions 70 x 40mm, the ‘rule of thumb’ design compression would be about 10mm. Accordingly, the tolerance for permanent set should be 50% of 10mm i.e. 5mm only and much less than many surveyors and ship's crew often believe. However, as soon as the permanent set is at or exceeds the tolerance limit, it is advisable for ship owners to renew the entire length of the respective seal at the first opportunity.
The hatch covers shown below passed a UTS test with readings on the UTS equipment always at less than 10% of the OHV (effectively weather tight). However, the surveyor’s subsequent observation of the deep and permanent set of the hatch seals showed a completely different story. Accordingly, he had no choice other than to include a recommendation for immediate hatch cover packing renewal as an urgent loss prevention measure.
Photos showing approx. 12 mm of permanent set, well beyond the tolerance limit of about 6 mm for the packing shown.
Owners will often be dismayed or even angry when confronted with a situation in where a UTS survey shows a hatch to be weather tight but this is not supported by a visual inspection. Fortunately, such scenarios are not common. However, when they occur, they highlight the fact that there is no substitute for skilled assessment of hatch condition by an experienced and well-trained surveyor. Add to this the surveyor’s ‘no extra charge’ provision of knowledgeable and helpful advice to the Master and owners on hatch maintenance priorities and procedures and you’ve got yourself a good investment in loss prevention.
“Straight” B/L’s and Seaway B/L’s: watch out, there’s a big difference !
In last month’s SEA Watch, our focus was on the dangers to Freight Forwarders and NVOC’s of delivering up cargo which had been shipped to a named consignee under a “straight” B/L but without first ensuring presentation of an original B/L. We also highlighted the point that Seaway bills are different from all other B/L’s in that they are designed to permit delivery of cargo, on the basis of proper identification, without presentation of an original B/L. OK, no problem. But what is the fundamental difference in the legal concept of a Seaway B/L and a straight B/L which allows this to occur? And what happens if there is confusion as to what a straight bill really is or someone tries to turn a straight B/L into a Seaway bill?
Most of us have learned about the three principle functions of a Bill of Lading as being:
- Carrier’s receipt for the goods.
- Good (but not irrefutable) evidence of the terms of the carriage contract.
- Document of title.
The fundamental difference between a “straight “ B/L and a Seaway B/L is then that with respect to a Seaway B/L, the 3rd function (“Document of title”), does not –by design and in law - exist which is why a Seaway B/L does not need to be presented to facilitate delivery of the goods.
The problem which still arises is that for many years it was commonly believed that in the case of a “straight” or “non-negotiable” B/L (both terms mean the same) it was not necessary for the original B/L to be produced if the named consignee could properly identify themselves. That is no longer the legal position in English law or in common law jurisdictions (e.g. Singapore, Malaysia and Hong Kong) and is also no longer the case in several civil law jurisdictions such as France and the Netherlands.
The clarification of the law was brought about by an English case called the The Rafaela S which eventually went to the House of Lords for a final and binding decision.The findings there - stated in simple terms - were that although a “straight B/L” was intended to denote delivery to a specific named party and was not to be negotiable (transferable to another party), it still constituted a document of title. As such, the presentation of an original copy of the “straight” B/L was essential to entitle delivery.
Regrettably, not everyone understands the current legal position with respect to the status of “Straight” B/L’s. This being the case, there still seems to be some unfortunate and potentially harmful confusion on this point within the transport industry. It must also be understood that with respect to the interpretation of the terms of a contract – which of course includes a B/L – a common law court will not be concerned as to the underlying intentions of the parties but will only be concerned with the interpretation of the words used in the contract. So the carrier cannot say, “Well I know it may look like a “straight” B/L but that’s not we or the shipper actually intended”.
The aforementioned issue was in fact considered by the Singapore courts in a case known as Peer Voss v APL Co Pte Ltd  2 Lloyd’s Rep 707. There the Court confirmed that a non-negotiable (“straight” B/L is not the same as a sea waybill and the parties had not removed the provision for delivery only upon B/L presentation. The Court held that clear words are therefore needed to imply that the parties can treat a non-negotiable B/L as if it were a sea waybill such that delivery may be accomplished by way of proof of indemnity only.
Carriers and their shipper customers should never use “straight” or “non-negotiable” B/L forms when in fact they intend the B/L to be used like a Seaway B/L.
Thus, if you may be engaged in trades where:
- production of original B/L’s at disport may be a problem (e.g. short sea voyages) or,
- you are shipping cargo which will not be sold en route to another party or,
- no B/L is in fact intended to be issued (e.g. own cargo)
then a Seaway B/L should be used instead of a non-negotiable B/L.
There are several standard forms of sea waybill available on the BIMCO website which can be customised for your own use for a small fee. In SEAsia’s view, a sound investment in the prevention what could otherwise be a very big wrongful delivery claim with no exculpatory defence or limitation of liability available. If you may need some advice on how to do this, then give SEAsia a call as we will be pleased to help.
SEAsia’s Network Partner in Taiwan: SEAsia Taiwan/G+I Surveyors & Consultants
Taiwan is an island nation of 24 million people, most of whom enjoy a fierce attachment to the concept of independence from China. So much so that China has turned away from threats to a charm offensive in an effort to woo Taiwan back to agreeing re-union with the mainland. Will it ever happen? Well, based on your editor’s first hand observations during numerous trips to Taiwan, it seems unlikely.
SEAsia’s network partner in Taiwan is G&I Surveyors and Consultants Co Ltd, headed by Managing Director, Hubert Shoei. Hubert is an experienced mariner who holds a Class 2 Chief Officer’s certificate and who later obtained a law degree from Fu Jen Catholic University in Taiwan.
Hubert first went ashore to work for Jardine’s in Taiwan in 1986. He then moved on to work with the well known marine surveyor and P&I correspondent Larry Heron (who has since moved on to Saudi Arabia) before starting up his own company, G+I Surveyors.
Hubert’s company has been appointed as SEAsia Taiwan for a number of years and his standard of work and reporting is of a very high level which, when considering his quality western style operational background, is not overly surprising and a bonus for SEAsia clients.
SEAsia Taiwan’s team – which includes other qualified mariners and a naval architect - are all experienced people with a lot of surveys and claims investigations under their belt. Full CV’s for Hubert, his key personnel and contact details can be found on the SEAsia website.
SEAsia Taiwan’s work extends to all facets of the marine industry including P&I and H&M surveys and casualty control as well as cargo damage, loading and discharge superintendence and marine operations such as on/off hire surveys, draft surveys, towage surveys and pre-purchase inspections etc. So if it’s marine related, then Hubert and his crew can deal with it on a 24/7 basis.
Taiwan’s major ports are well developed and still growing so as to cater for a massive export market of high quality manufactured goods and imports for an ever more affluent population which has developed western tastes. The main ports are shown in our map extract and SEAsia Taiwan operates fully manned offices at both the northern most port of Keelung as well as the central western port of Kaohsiung. This provides Hubert and his team with the ability to mobilise quickly and cost effectively to any port in Taiwan.
SEAsia Taiwan/G+I Surveyors are standing by to assist you, whatever element of marine survey or investigation and control service you may require.