The last 20 years, there is a dramatic increase in container movements by sea

S4S: Why are containership claims so important?

NM : We've all seen containers whether on the back of a truck while looking out of the window while driving past a port like Piraeus or at the sea. It's an incredibly efficient way to move goods. As a result of this the last 20 years we have witnessed a dramatic increase in container movements by sea. New terminals and hubs proliferate around the world. Containerships have also grown. There are 18 million containers in circulation and 105 million loaded container movements a year. This gives us an idea for the potential problems to occur.

S4S: Could you please provide some insight in containership claims?

NM : There are over 400 containerships into the UK club. That forms 12 per cent of the entry in tonnage terms. Containership claims in terms of number account for only 10 per cent of all our large claims. You all know that 10 per cent is well behind bulk, dry cargo, passenger and of course tankers. Looking at the same data in terms of value, you'll see the containership large claims recoding improvement with the 12 per cent entry accounting only for 9 per cent of the claims in total value terms, whereas the opposite can be said for tankers. Now, considering the type of claims, cargo claims account for 55 per cent of all containership claims. Approximately one third of all containership claims in terms of value arise from the cargo. Set against the club's benchmark for frequency of claims, containership claims are well above 38 per cent. This suggests to us that there is room for improvement.


S4S: Could you tell us some facts about the causes of these claims?

NM : Considering cargo claims, about half of the large container cargo claims are caused by someone ashore as opposed for example to only one sixth being the fault of the deck officer. If we look at where the damage occurs, our data tells us that one third of the cargo claim incidents don't even occur on board. There is the shore person contributory cause. If we drill down into our data for these claims predominantly caused by shore person error, we become aware that those losses can be attributed to one of five sources, the big five. These are bad stowage, bad handling, wrong temperature settings, terminal error and fraud or crime. Other areas are less significant. Looking at type of damage, physical damage is the winner. This can be caused mainly by bad stowage, both within the container itself and also on how it's placed on board ship. Equally, pure securing practices when the container is stuffed and once loaded and stowed are prevalent. Packaging is also an important factor and can't be forgotten.

S4S: Are there any other problems considering cargoes?

NM : Hazardous cargoes are a problem that appears to be on the rise and the trend is upwards with the transport of them. There are more and more diverse cargoes that are being containerized. This may well continue. There is serious risk of course that the cargo is destabilized and a fire or explosion results. Unfortunately, when a thing is going wrong, it can go badly wrong.


S4S: So, what is your proposal? Is there something you are looking to improve?

NM : The three main areas that need to be worked on are again the usual suspects: lashing, stowage and also heavy containers on light. Unfortunately, it is generally accepted that there are container weight issues in the industry. What we are looking to improve is the accurate declaration of contents and weight, the stowage of the goods within the container, securing the goods inside the container, the suitability of packaging, the ship/shore interface planning and the equipment suitability, ease of use and maintenance. All the links in the chain need to pull together to improve standards so as to avoid claims. Clubs are well placed to facilitate the process.

Nick Milner is Director of Claims at UK P&I Club/ UK Defence Club

Above interview is adapted from Nick's presentation at 2nd Safety4Sea Forum

You can view Nick's presentation during 2nd Safety4Sea Forum