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Shipowners shortchanged over grain cargoes, says Swedish Club

Shipowners shortchanged over grain cargoes, says Swedish Club

(Posted on 28/08/23)

Despite the many and varied categories of cargo damage faced by shipowners transporting grain cargoes, when it comes to claims, it’s actually cargo shortage that they need to be prepared for, says The Swedish Club, in its new publication, Bulker Focus: Carriage of grains and soya beans.

In the last five years, the Club’s statistics show that shortage was the most common type of claim for bulkers carrying grains, contributing to 63% of all claims. About 70% of these shortage claims occur due to discrepancies between the vessel’s figures and shore figures with most claims arising in North Africa over the five-year period as a whole.

The Swedish Club’s Director, Claims, Johan Kahlmeter explains: “In Argentina and many North African countries it is not unusual for there to be discrepancies between the shipper's figures based on shore scales, and draft surveys. Each country has its own rationale for this, but the bottom line is that the operator can find themselves seriously out of pocket through no fault of their own. Indeed, in some North African countries draft surveys are not recognised at all. Although each shortage claim averages to about only USD 35,000 there are so many of them that they make up nearly half (44%) of the Club’s claims costs for bulkers carrying grain.”

In the publication the Club provides a checklist of advice to help operators to protect themselves from these claims, including the use of surveyors, taking care with record keeping, and getting the Club involved when asked by third parties to sign statements.

Claims have also increased significantly over the period, in part due to COVID. Whilst an average of 5.6% of all bulk carriers insured have made a grain claim over the last five years, there has been a steady increase in the frequency of claims. Only 3.7% of vessels made a claim in 2018 compared with 8.9% in 2022. In this five-year period there were few claims in China until 2021, but since then the Club has seen a steady increase in the region, related to disruption and delays in Chinese ports due to COVID.

Authored by Joakim Enström, Senior Loss Prevention Officer at the Club, Bulker Focus: Carriage of grains and soya beans has been written in conjunction with cargo specialists CWA and focuses on the loading, carriage and discharge of bulk grain, oilseed and soya bean cargoes. These present numerous challenges with a range of considerations for the crew to consider prior to and during carriage of the cargo. The publication explores the most common causes of cargo damage, and how to prevent them, and also looks at fumigation and ventilation in detail. It aims to provide ship operators with understanding of the common issues experienced during carriage of these cargoes in addition to ways to avoid them.

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