Loading and Discharging Procedures
Shortage Claims
Contamination Claims
Loading and discharging procedures
The two most commonly encountered kinds of claim concerning liquid bulk cargo are shortage and contamination claims. Remember that a formal figured claim may not be received from cargo interests for many months. The Club should be notified of any allegation or suggestion of a claim by cargo interests - typically following completion of discharge - immediately it is made even if no formal claim is received at that time. Successful handling of claims depends to a large extent on the ship following a well planned operating procedure on loading and discharge and on the maintenance of careful records so that the evidence to deal with the claim is available even many months after the claim. In most jurisdictions time bars apply to exclude claims which are not made within a specific period. More details on this topic are contained in the section of this website under Time Limits.
The following procedures are recommended to ensure that a proper record is made of the loading, carriage and discharge:
1. The ship should compile and retain a report on the condition of the vessel’s tanks prior to loading, including a record of the ullages in slop tanks. Once the ship’s officers are satisfied about the cleanliness of the tanks, cargo interests and/or representatives of the terminal should be invited to inspect the tanks and confirm their acceptability in writing prior to the commencement of loading.
2. A loading/discharge programme should be planned in advance and agreed with cargo interests and the terminal staff. This should cover the order in which tanks are to be loaded/discharged, tank/pump/pipe work allocation and loading/discharge rates in order to minimise the stress on the vessel and the risk of cross-contamination of different grades of cargo.
3. An efficient system of communication should be established between the vessel and the terminal and the start-up/shut-down procedures for cargo operations agreed. A close watch should be maintained on weather conditions in order that cargo operations can be shut down in good time, and, if necessary, so that the vessel can depart from the terminal prior to the onset of adverse weather. A comprehensive ship/shore checklist will ensure that these details are given the appropriate attention and will provide evidence if needed that this is the case. For further information check the Steamship/Videotel training programme 'The Ship/Shore Interface' on this section of this website under Onboard Safety Training.
4. The sea valves and their seals should be checked in the presence of cargo/terminal representatives prior to loading and checked and sealed again after departure.
5. All operations undertaken during loading and discharge should be logged by the ship including details of all valve positions, changes in valve usage, pumping rates, manifold pressures and vessel’s draught and trim.
6. Ullage and temperature measurement of all the vessel's cargo tanks should be carried out in the presence of the terminal and cargo representatives upon completion of loading and immediately prior to discharge. The results should be carefully recorded and countersigned by cargo interests.
7. A calculation of the loaded quantity should be made, based upon the vessel's ullage and temperature figures, and the result compared with the shore figure to ensure that any difference falls within the vessel's experience factor. If it does not, a Note of Protest should be issued by the Master and an acknowledgement obtained from the shippers and/or charterers. Bills of lading should wherever possible be endorsed to show that the volume and weight measurements are not provided, ascertained or warranted by the carrier. If there is an unusual discrepancy between the shipper's figure and that disclosed by the vessel's loading ullages, every effort should be made to have the latter inserted in the bill of lading. At the very least, a Note of Protest should be drawn up by the Master to be attached to the bill of lading or passed to the shipper and any named consignee or notify party. Often in these circumstances the shipper will be reluctant to agree any reservation regarding his loading figure. Contact the Club for legal advice in the event of any such dispute.
8. Samples should be taken from the top, middle and bottom of each of the vessel's cargo tanks in the presence of a representative of the terminal and cargo interests. Similar samples should be drawn prior to discharge. It is also useful whenever possible to obtain samples of cargo immediately prior to loading, including samples from a point as near to the ship's manifold as possible. All samples should be sealed, labelled and stored for possible future reference. This can obviously lead to a storage problem, particularly since the samples should he retained for at least 12 months. However, such evidence is essential for the defence of any contamination claims that might arise. Often samples are taken at the commencement of loading after a small quantity has been pumped, in order to check if any contamination is revealed. If contamination is present, the cause of this must be fully checked and eliminated before the Master allows loading to continue. In case of doubt the Master or Member should contact either the Club Manager’s London representatives, or the Club’s local correspondents for assistance.
9. When loading crude oil cargoes, dips should be taken of all the vessel's cargo tanks upon completion of loading to check for the presence of free water. If any free water is found, a Note of Protest should be issued and an acknowledgement obtained from the shippers/charterers. As an additional precaution, further dips should be taken on the following day, by which time the majority any water in suspension in the cargo will have separated out.
10. Samples should be taken from the vessel's bunker tanks upon completion of loading and prior to discharge.
11. During the voyage daily checks should be made of the cargo tank ullages and temperatures, and the results should be recorded. Constant checks should also be made on the inert gas pressures, and any marked drop in pressure in individual tanks investigated. Records should also be kept of the loading or discharge of any ballast or of any internal cargo transfers.
12. On completion of discharge all tanks, including empty ballast tanks, should be dipped and, where possible, visually inspected in the presence of a representative of the terminal or cargo interests, to ensure that no cargo remains on board. The terminal or cargo interests' representative should be requested to sign a dry tank certificate and only after this has been signed should shore hoses be disconnected.
Using these procedures will establish a written record of the voyage which will be invaluable in reconstructing events when a claim is made.
Shortage Claims
Many shortage claims are based on incorrect calculations. With a standard operating procedure and full records it should be possible in cases involving routine voyages to show that all the cargo loaded was discharged, and that the carrier is not responsible for differences between the shore loading and discharge figures. Claims for shortage are often based on a comparison of shore tank figures, but in most countries the carrier's liability only commences at the point where the cargo passes through the vessel's permanent manifold connections, and terminates when the cargo passes out through the manifold connections at the port of discharge. A comparison between the ship’s figures at loading and discharge, and not the terminals' figures, is necessary to determine if any loss has occurred onboard the vessel.
To verify the quantities actually received on board and discharged from the vessel the following documents are usually required:
- A dry tank certificate reporting on the condition of the vessel's tanks prior to loading.
- A record of the quantity of material already in the slop tanks.
- An ullage report prepared on completion of loading.
- A statement of the vessel's draught on departure from the loading port. This may be contained in the ullage report, as in the example above.
- A statement of the vessel's draught on arrival at the port of discharge, which again may be contained in the ullage report.
- An ullage report prepared prior to the start of discharge operations.
- A dry tank certificate issued on completion of discharge, which should preferably have been signed by the consignees.
- The original bill of lading and charter party.
- Evidence of the cargo value, such as the commercial invoice
With many liquid cargoes, unpumpable residues will remain on board. Whilst it is important that the quantity of such residues should be checked, clear evidence to the effect that the residues are indeed unpumpable is essential if claims are to be avoided. Investigations may therefore be necessary to prove that the vessel's valves, lines and pumps are all in good order. A dry tank certificate confirming that all pumpable cargo has been discharged and any quantity remaining on board (ROB) is unpumpable, will normally be conclusive evidence, particularly if signed by a representative of the consignees.
In many countries, courts will accept that the carrier is not liable for shortages of up to 0.5% of the quantity laden. It is generally acknowledged that ship owners should have the benefit of a percentage allowance, since the measurement of bulk liquids is not an exact science, and unavoidable loss will often occur during a voyage. To keep measurement inaccuracies to a minimum, standard procedures should be adopted by the ship's crew when measuring cargo and calibrating equipment.
If the routine documentation described above indicates a shortage which exceeds the usual allowance for the type of cargo and vessel in question, then additional investigations may be necessary, for example:
- A survey of the vessel's tanks to verify there was no leakage of cargo during the voyage.
- A check upon inter-tank transfers during the voyage. Accurate records should be maintained of all such transfers.
- A review of weather conditions during the voyage. Prolonged rolling and pitching during heavy weather can increase the rate of evaporation of cargo, and may result in the release of cargo from full tanks.
- A review of bunker records and a survey of cargo lines in order to rebut any allegation that cargo has been diverted from cargo tanks.
Contamination Claims
The most important evidence in the handling of contamination claims is that represented by cargo samples [see the section above entitled Loading and Discharge Procedures ]. Much of the documentation and evidence required for shortage claims is also necessary to contest contamination claims. In addition, the following documentation should be obtained:
- The vessel’s maintenance records, including details of previous cargoes, surveys and cleaning operations.
- A record of all cargo operations carried out on board the vessel during the relevant voyage, including pumping operations and inter-tank transfers.
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