Cargo claims are the most common and costly category of P&I claims. Our analysis of the statistics over the past years (2016-2020) shows that 10% of all insured tanker vessels suffer a cargo claim a year.
Most common type of claim
- Contamination (39%)
- Shortage (33%)
- Off-spec (24%)
Most common type of cargo involved
- Vegetable oil (29%)
- Hazardous chemicals (28%)
- Petroleum (18%)
- Other liquid cargo (10%)
- Fuel oil (6%)
Known causes of claims
The data shows claims for tanker vessels, 2016-2020
Contamination claims are often caused by insufficient cleaning of the vessel’s tanks or improper cargo handling during loading/discharge by the vessel’s crew.
To avoid a contamination claim, thorough, adequate cleaning of tanks, pumps and lines is crucial. The extent of cleaning has to be seen in relation to the cargo previously carried and that to be loaded. The shipper’s advice should be sought regarding the cleaning standard and procedure required as the shipper is the party best placed to know the requirements of the cargo to be carried. It should be noted, however, that the vessel is not absolved from liability if the tanks have been inspected and approved by the shipper’s or the charterer’s surveyor even if the charterparty contains a stipulation to that effect.
Requests to blend or commingle oil cargoes usually come from charterers or shippers. These procedures are potentially complicated and can expose members to very large claims for off-spec cargo at the port of destination. It can also jeopardise the P&I cover. It should be kept in mind that the master and crew have limited scientific knowledge of inherent characteristics of chemicals or other oil products. Should it prove necessary, it is of the utmost importance that the shipowner and master consult specialists in the field on loading, with the assistance of the Club. When accepting to blend/commingle cargo it is essential that the master:
- Clauses the bill of lading accordingly
- Takes samples
In addition, the Club recommends that members obtain a Letter of Indemnity from shippers or charterers.
The vessel’s responsibility starts and ends at the vessel’s manifold. If using the vessel’s hose, the responsibility starts and ends at the hose connection ashore.
Prior to loading, a Tank Clean Certificate, if applicable, should be obtained from the surveyor. At the start of loading, samples should be taken by the crew at the vessel’s manifold. It is important that the very first product loaded is sampled.
If applicable for the grade to be carried, first foot samples should be taken and analysed before the loading is allowed to continue. Upon completion of loading, samples should be taken by the crew from all tanks. Depending on the cargo’s composition, it may be necessary to take samples at different levels in the tanks.
In the discharge port, it is strongly recommended that the vessel’s crew takes samples from each tank before the discharge operation commences. Samples should be representative and the sampling method depends on the grade. In addition, the crew should take samples at the vessel's manifold at commencement of the discharge of each parcel.
The cargo surveyor often attend on behalf of the shipper and the receiver. To protect the vessel’s interests, the crew should take their own samples, which is to be kept on board.
A large range of chemical commodities are carried onboard chemical tankers, totalling more than 5,000 different chemical products and grades. These chemical products often have a high minimum of purity due to their intended end uses. The contamination of chemical cargoes can often affect the suitability for their intended end-use, and this can play a significant role in the cargo’s value. As a result, special consideration should be given towards these sensitive cargoes in order to ensure their proper carriage. Access the full advice on SCOL
A variety of refined petroleum cargoes are transported via the shipping industry. These cargoes are classified by the hydrocarbon range of the products. These products are isolated from crude oil, mainly through distillation where fractions are isolated based on a specific boiling point range. The boiling point of each fraction corresponds to its specific hydrocarbon range, with the higher hydrocarbon ranges correlating to higher boiling point ranges. Access the full advice on SCOL
Vegetable oils and fats are extracted from fruits and seeds, their composition varying depending on the source of the seed. The terms fat and oil are defined based on their consistency at room temperature, with oils being liquid at room temperature and fats being solid. In general, vegetable oils consist predominantly of triglycerides. Access the full advice on SCOL
Fire! A guide to the causes and prevention of cargo fires
When a fire breaks out onboard a vessel there is no fire service ready to assist in extinguishing it – it is up to the crew themselves. The consequences can be catastrophic, and all those who have worked on board a vessel are aware of the difficulties involved with managing a fire and the crucial importance of fire prevention. The information in this handbook is designed to assist shipowners and crews in those fire prevention efforts. Download the full handbook
IG Letters of Indemnity
The IG standard form Letter of Indemnity (LOI) wordings may be downloaded below: