Responsibilities and Financial Terms in Sea Cargo Transportation

Introduction

As a Common Carrier the ship Owners/Master are absolutely responsible for the safe carriage of the Goods and for the delivery of a same, without un-reasonable delay, at the destination in the same Apparent Order and a Condition as was received. The contractual obligations of the Carrier, where in the an Owner/Master are responsible under the various governing Charter Party Terms and conditions would a be obliged to comply with the clauses of Carriage of a Goods under COGSA 71/92, Hague-Visby Rules.

Lay can (Lay time and Cancellation) it is the period where lay days commencement and a cancellation for an agreed terms and conditions of Cargo/Goods Transportation by Sea.

Order custom essay Responsibilities and Financial Terms in Sea Cargo Transportation with free plagiarism report

450+ experts on 30 subjects Starting from 3 hours delivery

Get Essay Help

Demurrage is the monetary value payable to the owner of the ship for any delay or extra time the vessel would be kept under the charter for which the owner is not responsible in loading and/or discharging operation after the lay time period. On demurrage will mean that the lay time has expired and unless the charter party has at expressly provide to the contrary the time on demurrage will not be a subject to the lay time exceptions. Once on demurrage always on demurrage clause may apply. ‘’Reference from notes page 2 STC’’

Dispatch it is the charges paid by the owner of the ship to the charter, a usually half of the demurrage rate, could be called as an incentive for a charterer to load and discharge faster a than lay time allowance. ‘’Reference from notes page 3 stc’’

‘’Owners are obliged to exercise due a diligence to ensure that she is an sea worthy vessel at all the times of’’ As per the a Hague-Visby rules Article III with respect to the liability and responsibilities compensation the carrier is bound through out the voyage to an exercise of due diligence to make the vessel sea worthy and properly equipped, a manned and supply in stores the ship requires and the cargo spaces would be made fit for Cargo reception, a carriage and delivery.

And as per the Article IV it states that a if the carrier is un liable for the loss or the damage resulting or arising due to un-sea worthiness at en-route unless caused by want of due diligence on the part of carrier to a make the accident in manner confronting with the of conditions.

In paragraph 1 of Article III of “any damage or loss resulted from un-sea worthiness the burden of proving the exercise of due diligence will a be up to the carrier or those persons claiming exemption an under this article “college notes reference’.

Reference from college notes page 1 , 2010 “carriage of goods by sea en acted 1971 and amended there on, applies to any contract, for COGSA in ships from a UK port which provides for the issue of a OBL or similar document of Title; any OBL’s if contract in or evidence by it expressly provides that the amended HRV shall govern the contract; any non-negotiable receipt, marked, if it expressly provides that the rules are to govern the contract as were an OBL”.

“ Article X says rules apply to every bill of lading relating to the carriage of goods between ports in two different states if, the bill is issued in a contracting state or; the carriage is from a port in contracting state; the contract contained in or evidence by the bill provides that the rules, or legislation of any state giving effect to them, are to govern the contract, whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person”.

College Notes

Reference: hand out, STC “English law relating to bills of lading, rights and/or duties of the carrier, S1 (2) COGSA 1971 gives the force of a law to the HVR, as appended to the Act. Burden of proof un-seaworthiness – claimant as to a lack of seaworthiness of vessel at the relevant time (damage to cargo is prima facie evidence) claimant that un-seaworthiness a was proximate cause for damage to the goods, a rather than excluded peril. Carrier as to damage caused by excluded peril at sea. Carrier has duty of to due diligence had been fulfilled as per Article IV (1) HVR, carrier can a still claim ‘limitation of liability””

Rotterdam rule, Hamburg rule, Hague rules, review into HVR, a Hamburg rules would be applicable if Bill lading issued in the port of a contracting states Article X (a) as mentioned in the contracting agreement.

In this case, the carrier because of a malfunction of statutory equipment probably makes the ship un sea worthy and henceforth the subjugated carrier liability and therefore there was a breach of a contractual carriage under COGSA therefore vessel will be held liable responsible under Hague-Visby Rules III for damage of goods in clause.

A Bills of lading in Original (OBL’) with out an endorsement by ship, the OBL now is a clean which entitles a benefit or privilege to shipper receivers that goods are in good condition and same to delivered at the discharge port.

The issue of clean OBL allows the charter/ receiver to pursue a claim against the carrier for the rusty pipes, and/or short landing of the cargo, because OBL are not appropriately remarked or re-written now says the cargo that is to be discharge at the Korean port would be in good condition, as per clean OBL’. LOI does not have court of law sustained.

The G/C vessel Master should have brought Steel Pipes stained matter to the attention of the owner immediately, but his neglect or over look, has this mitigate in owners profit, restricts the ship owner from claiming any protection against the loss with respect to claim of the cargo which may arise.

The master of the ship should have with due diligence requested the owner for a separate or independent surveyor to inspect the cargo loading operation. This could have saved the ship owner from the claims at future stages as legal aspects are taken care.

Or the second option was the master should have clause the OBL, or should have recorded that the cargo was rusted supported, his statement with photographic evidence or note of protest with proofs and witness statement with letter of protest by Telex informing all parties concerned.

During the survey at Port of Refugee (whilst Dry Docking) un seaworthiness were proved as vessel sailed with the Radar equipment not working, as per the SOLAS and the certification of statutory requirement this clearly indicates that the master and the owner choose not shown due diligence for compliance regulations.

Company and master knew about the faulty Radar and in the later part one of the probable reason resulting in collision with container ship, the un seaworthiness of own ship may deny the owner from General Average contribution from the owners of the cargo, if any jettison of undertaken, under P n I, H & M covers.

The container vessel which was short manned would also be under scanner before claims for as the both the vessels would to be blamed for the incidence that took place.

The owners will be subject to the claims from the receivers/charterers, and both the vessels to be blamed for the accident and claim from ship owners been taken up and such claims for the damages from either ends and the case is in Arbitration for resolve and insurers.

Reference from: The shipmasters business companion- Malcolm Mac Lachlan, 2004 edition Commercial Management Shipmasters- Robert L.

“Salvage involves the provision of services to maritime property in danger that result in the saving or partial saving of that property thus entitling the provider to a reward. Works under common law, statutory law, contract law” reference from hand out STC page 1 of 2010 “page 5 two types of agreement , one services rendered on the basis of ordinary tariff, fixed amount, daily rate, second is services rendered on the basis that remuneration will be settled later, whether by agreement or arbitration or court.

LOF 2000, salvor may use SCOPIC clause, this agreement is made in easy manner, not likely to be disputed, no cure no pay, English Law applies, salvor will be awarded, underwriters liability can not be increased beyond that for total loss, excessive claims by salvors avoided.

General Average “there is a GA when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure’’ reference from college notes STC page 2010 The jettison cargo on Container ship, sacrifice was intentional for preserving the property therefore she is eligible for General Average, the cost of the lost, damaged cargo claimed from the insurer as per prior agreed terms.

Hull and Machinery will cover the loss incurred of the hull damaged which was caused because of collision if and so, as is an un intentional act and will come under Particular Average.

If the master of both the ships have taken reasonable precautions then it would have been sufficient to mitigate the losses the ship owner. The company would have loss incurred due to salvage under LOF or daily hire, General Average as far as it complies with clause, H&M and P+I insurers would cover only their parts they are agreed upon.

Where as the evidences has proved that the container vessel sailed in seaworthy condition but a day before the accident of their Sec/officer was evacuated on medical grounds and made short manned, which was un foreseen or un planned.

This short manning has caused fatigue and might be resulted in the non compliance of STCW 95 chapter VIII and require to have an exemption certificate copy onboard prior arrival next port. Both the vessel has to exchange the particular information as per MSA 95 sec 92. Duty of ship to assist the other in case of collision.

If Owner/master proves that she has exercised due diligence, will be paid by the cargo insurers of the shipper and if she has not done the same then will lieu under PA and the cargo insurer will be claimed against by the shipper cargo specific damage/ lost cargo who in turn will claim the same from the from P+I Swedish club or from the ship owner and the hull damage, will be covered by is 3/4th RDC by H&M , and 1/4th by P+I

Reference from college handout Particular Average (PA) Losses caused by accident are said to lie where they fall viz., the owner of the property bears the loss, though cargo owners have right against carriers.

Protection and Indemnity insurance provides their ship owners and charterers members with incident and claims handling services through a world wide network of correspondent.

P and I clubs are those non profits making organization which is a joint venture between shipping companies; it offers the ship owners the coverage against the risks which are not covered by the Hull and Machinery.

Hull and Machinery under writers under marine insurance act 1906 the principle would be insurable interest, utmost good faith, proximate cause, indemnity, subrogation. Insurance covers the hull and machinery of the insured ship against certain peril, clause as ‘inchmaree’ viz., peril of the sea, piracy, fire, 3/4th of run down clause, the ship owners proportion of salvage, ship owners contribution of GA.

Reference notes commercial management page 28 ‘‘Salvage in marine is a method used for rescuing a vessel, goods, or any ship property from peril. It encompasses rescue towing, re-floating a incident prone boat, or repairing a vessel, environmental protection as main motto due to from cargos’’.

The positive aspects of LOF2000, it is a No Cure No Pay agreement and is not likely to be disputed and the disputes will be referred to arbitration. Negative point is could end up expensive.

Time factor put the master in an defensive position or puts him in hesitant position to make a decision, so considering the safety of crew, environment, inform the owners and can go ahead with the LOF, where agreement can be sort by phone/vhf as well.

In view of the incident the master of general cargo ship choose the LOF, which could be considered as a Right move for this scenario. And save a lot of time and further catastrophes.

This has increase the percentage of positive out come in sights of crew safety and environment hazard, and property loss. Since own vessel due to collision had severe damage to hull and ingress of water.

There was immediate requirement of assistance as there was threat to life, environment and property and limited time for negotiations/bargains.

Vessels owner to be kept posted with all the developments by the masters of both vessels, while under salvage / towage.

The container vessels decision to go for Daily hire is the probable most best suited towage option could be choose as her extent of damage is minor and had reasonable time for negotiations and select the best established salvor to have a safe operation.

All entry formalities to be considered prior arrival to the port of refuge namely, Agents, Customs, Immigrations, PSC, P+I, Quarantine, ISPS, with all possible evidence regarding the incident. MAIB would be informed within 24 hours of arrival to port.

Both the vessels were taken to port of refuge, and after a thorough inspection of repairs carry out the class and insurers would be issuing an interim certificate. All the necessary information of ship to send to the Owner and the Insurance company. Complete all the out ward clearance port formalities. Vessel’s can sail to the port of destination.

Bibliography: References from

1. STC handout and materials
2. The shipmasters business companion- Malcolm Mac Lachlana, 4th Ed 2004
3. Commercial Management Shipmasters- Robert L. tallacka.
4. Shipping law by Chlorey &Giless (8th edition)
5. Business and Law for the Shipmasters by F.N.Hopkinns (7th edition).
6. www.marine-salvage.com; marineclaimsconference.com/2010/index.html
7. www.sailor today.com/maib.com

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

Check my essay Hire Writer