Freight Forwarder Considerations

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) are in regular contact with Yang Ming Line following the Yang Ming Efficiency losing containers (and damage to others that remain on board) during rough seas off Newcastle last week.

We understand that discussions are in progress for the possibility of berthing into Port Botany tomorrow morning (06 June 2018).

In the interim, please refer below to the following insurance commentary for consideration by affected freight forwarders.

While members should seek specific advice from their advisers in these circumstances, FTA has consulted with our insurance adviser, James Cotis, who has offered the following high level commentary/guidance;

Where Australian based FTA Members’ may potentially have their customer’s cargo on board the vessel:

  • Do not make any admissions as to liability or offer to settle any potential claims as FTA members’ insurance coverage may be compromised if liability is admitted without their insurer’s consent;
  • Monitor communications with Yang Ming to establish which containers have been damaged/lost over board and whether these relate to any FTA Members’ customers;
  • Advise affected customers to notify their cargo insurers without delay. This will allow insurers to take all necessary steps to mitigate liability and arrange survey(s).

In that regard:

* Any damaged containers/cargo can be surveyed once discharged at Port Botany;

* Containers lost overboard may be recovered by the YM Efficiency’s Protection and Indemnity (P&I) insurer, however, this is likely to take some time. Therefore, we suggest lodging claims as soon as possible as they can usually be settled without requiring a survey in these circumstances;

  • Send any relevant contracting parties an “Intent to Claim” to put them on notice of the incident.

In relation to contractual aspects of this incident, assuming that the lost/damaged containers are mostly imports, Australian based FTA Members are unlikely to have issued House Bills of Lading.

Therefore, they more than likely removed from the contractual chain. Claims for this incident from FTA Members’ customers (usually known as “cargo interests”) should be made against the contractual carrier who issued the House Bill of Lading. They, in turn, can then claim up the chain to the carrier who issued the master bill (probably Yang Ming but possibly other carriers if there are slot chartering or vessel sharing arrangements in place).

Any FTA Members (or their overseas offices) who have issued House Bills of Lading should contact their insurance advisers &/or liability insurers for assistance without delay. Early notification is critical as liability insurers will probably seek to arrange surveyors to inspect damaged containers/cargo discharged at Port Botany.

Yang Ming’s statement regarding the containers fall off YM Efficiency (02 June 2018)

YM Efficiency, one of Yang Ming fleet, announced incident of container overboard along Australia coast on 1400utc, May/31/2018, as the vessel encountered adverse weather en-routining from Kaohsiung to Sydney loaded with 3307 TEU onboard. A total of 83 containers were overboard, and 30 vans collapsed remaining on deck according to master’s report. There were neither DG cargo involved in the incident, nor Marine Pollutant. No vessel hull/engine damages as well.

The incident has been reported to Australian AMSA and Concerned parties. Yang Ming Headquarters has an emergency task force set up to deal with this incident immediately to monitor the development of the incident. Till this moment, everything is under master’s control, and vessel ‘s safety navigation has been well secured. She has already arrived out off Sydney port, however, due port closure under adverse weather, she is unable to be berthed now. YM is trying utmost to secure a berth for her a.s.a.p.

The relevant measures to unload those collapsed containers O/D, as well as damage repair for the deck fittings are also under arrangement. The customer involved will be informed in due course. The overboard containers will be salvaged/removed by vessel ‘s PNI, Britannia P&I club.

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