P&IQ Module 1: The Shipping Business (2023/24) PDF

Module 1 THE SHIPPING BUSINESS A qualification for the P&I industry produced by the International Group of P&I Clubs 2023/24 EDITION  A qualification for the P&I industry produced by the International Gro...

Module 1 THE SHIPPING BUSINESS A qualification for the P&I industry produced by the International Group of P&I Clubs 2023/24 EDITION  A qualification for the P&I industry produced by the International Group of P&I Clubs Module 1 The Shipping Business  Published by the International Group of P&I Clubs, 3rd Floor, 78/79 Leadenhall Street, London, EC3A 3DH All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of the publisher. Copyright © International Group of P&I Clubs 2023 Author: International Group of P&I Clubs The Author asserts moral copyright in the work. Edition 2023/24 revision 2. Production, design and layout: Carmarmedia.co.uk, the Institute of Chartered Shipbrokers and Coracle Online Ltd Front cover and chapter covers: Danny Cornelious Ship images and illustrations: Institute of Chartered Shipbrokers DISCLAIMER While care is taken to ensure the accuracy of the information, no warranty of accuracy is given and users of that information are expected to satisfy themselves that the information is relevant and suitable for the purposes to which it is applied. In no circumstances whatsoever shall the contributors or the International Group of P&I Clubs be liable to any person whatsoever for any loss or damage whensoever or howsoever arising out of or in connection with the supply (including negligent supply) or use of this information.  Contents CONTENTS Introduction VII Examination IX Chapter 1: Shipping and world trade 1 1.1 Global economics and transport by sea 2 1.2 Commodities and their origins 4 Chapter 2: Marine hazards 16 2.1 The significant natural hazards to safe navigation 17 2.2 Limiting the risk posed by natural hazards 31 Chapter 3: Vessel types and characteristics 33 3.1 The measurement of vessels 34 3.2 Types of vessel 35 Chapter 4: Who’s who in the shipping business 54 4.1 The shipping industry and who supports it 55 4.2 Industry organisations 74 Chapter 5: Maritime regulation 80 5.1 International Conventions and the IMO 81 5.2 Important international conventions 85 5.3 The International Labour Organization (ILO) 87 5.4 Flag States 88 5.5 Safety of Life at Sea 92 5.6 Port State Control 97 5.7 Regional regulation 99 P&IQ | MODULE 1 THE SHIPPING BUSINESS V Contents Chapter 6: Law 105 6.1 The components of English law 106 6.2 The essential features of contract law 108 6.3 The essential features of the law of tort 110 6.4 Other remedies 113 6.5 Limitations 114 6.6 Insurance Law 116 Appendix 1 130 VI INTERNATIONAL GROUP OF P&I CLUBS  Introduction P&I Qualification programme Module 1 - The Shipping Business Introduction The content of this module forms part of the P&I Qualification (P&IQ) programme but may also serve as reference material. This module provides candidates with a high level review of the main features of the shipping business, its importance in global trade, the regulatory environment in which it operates, and the background to maritime law and marine insurance. Assumed knowledge None assumed. What you’ll learn in this module To succeed in the examination of this module you should take note of the learning objectives for each chapter and the knowledge rating key below. Guide to knowledge ratings General background awareness necessary 1 Requires a knowledge of the major concepts and issues 2 Requires a thorough understanding of concepts as well as significant detail, the ability to evaluate them and to apply them to various situations. 3 Learning objective Your objective should be to learn the content of the chapters to the level required by the knowledge ratings. Chapter 1 Shipping and world trade Knowledge rating Global economics and transport by sea 2 Significant trade routes for the carriage of commodities and foodstuffs 2 P&IQ | MODULE 1 THE SHIPPING BUSINESS VII Introduction Chapter 2 Marine Hazards Knowledge rating The significant natural hazards to safe navigation 2 Mitigating the risks of natural hazards 3 Chapter 3 Vessel types and characteristics Knowledge rating The measurement of vessels 2 The main features of different vessel types 2 Chapter 4 Who’s who in the shipping industry Knowledge rating The shipping industry and who supports it 3 The main industry associations 2 Chapter 5 Maritime regulation Knowledge rating The role of the IMO 3 How international conventions are created and implemented 3 The role of the flag state and the enforcement of conventions 3 The ISM Code 3 The ISPS Code 3 The IMDG Code 2 The IMSBC Code 2 The role of port state control 3 Certification requirements 2 VIII INTERNATIONAL GROUP OF P&I CLUBS  Introduction Chapter 6 Law Knowledge rating The components of English law 2 The essential features of contract law 3 The essential features of the law of tort 3 The difference between contractual damages and damages in tort 3 Other legal remedies 2 Limitation of liability 2 Limitation of time 2 Main features of the Marine Insurance Act, the Insurance Act and the Enterprise Act 3 3 3 Examination Exams are held twice a year in May and October. The syllabus is examined on the learning text in this module. Unless specifically stated in the learning text, students will not be examined on the appendices. Refer to www.pandiq.com for the latest learning materials, syllabus and examination dates and all other information on P&IQ. P&IQ | MODULE 1 THE SHIPPING BUSINESS IX Chapter 1 X INTERNATIONAL GROUP OF P&I CLUBS  Module 1 CHAPTER 1 SHIPPING AND WORLD TRADE Chapter 1 What you’ll learn in this chapter Shipping and world trade Knowledge rating Global economics and transport by sea 2 Significant trade routes for the carriage of commodities and foodstuffs 2 1.1 Global economics and transport by sea Throughout the course of history the sea has been a key factor in man’s survival and development. In addition to its vast benefits as a natural resource, throughout the ages, the sea has provided a means of transportation for people in exploration of more distant lands and for goods carried in trade or for support of communities or ventures. It has also served as a means of projecting power quickly and secretly across short distances and across vast distances. Though voyages by sea are subject to substantial navigational and weather-related risks – and piracy, disease and unseaworthiness could also impede their success – the sea was also a good place to hide; and, with over 70% of the earth’s surface covered by water and overland routes often facing even greater perils from natural, political and lawless dangers making them inhospitable, the ability to move people and goods by sea became an important benefit. Countries whose leaders or merchants developed maritime transportation often grew wealthy and powerful as a result. For island nations the sea was the principal means of international trade and many nations with substantial coastlines used maritime dominance to gather new knowledge and to forge and maintain empires; whilst sometimes also spreading disease which decimated native populations and exploited resources and peoples. Even today with the development of faster forms of transportation such as aircraft, and complex rail and road networks, 90% of world trade still travels by sea. The principal benefits of the trade include costs savings from economies of scale including energy savings per tonne/mile, simpler logistics and administration, access to cheaper and larger quantities of raw materials and fuel and generally safer movement of goods – especially dangerous goods. There are 44 universally recognised countries in the world without a sea border that are enclosed or nearly enclosed by land or “landlocked”. Given that historically this was regarded as a position of disadvantage, international agreements have been reached to provide those countries with access to the sea. One example of this is the convention that made the River Danube an international waterway by granting sea access to Austria, Hungary and Slovakia. The United Nations Convention on the Law of the Sea now gives landlocked countries rights of access to and from the sea. Even if a country has a long coastline, not all of it may be readily accessible. In the case of Russia, for example, the northern ports and some in the east are severely climate limited. This is the reason why access to warm-water ports in the Black Sea was historically so important for Russia. Convention regarding the Regime of Navigation on the Danube 1948 2 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade (see www.danubecommission.org/uploads/doc/convention-en.pdf). Historic maps show various regular trade routes across the oceans of the world and this concept of a regular pattern of linked ports continues to this day. Local traffic will move close to the coast, generally in smaller vessels, and some of those vessels will act as ‘feeders’ taking cargo to and from larger ports which act as hubs for the vessels performing the long-haul routes. Sometimes these hub ports are the only ports in the region that can handle the scale of vessels used in deep sea transportation making use of the economies of scale. Below is an example of a regular Eastbound route that Maersk has advertised which crosses from Asia to North America. Busan Vancouver Seattle Shanghai Xiamen Yantian Kaohsiung VANCOUVER, SEATTLE, Canada United States From Dept\Arr SUN TUE KAOHSIUNG, Taiwan TUE 19 21 YANTIAN, China THU 16 19 XIAMEN, China FRI 15 17 SHANGHAI, China MON 13 15 BUSAN, South Korea WED 11 13 © A.P.Møller-Mærsk A/S: a Danish company with a fleet of more than 500 container vessels as well as a significant presence in the tanker trades. See their website www.maersk.com. Action Step: Check the websites of other shipping lines to find out what information they provide about the routes their vessels take. P&IQ | MODULE 1 THE SHIPPING BUSINESS 3 Chapter 1 1.2 Commodities and their origins Now that many foodstuffs once regarded as seasonal are more widely available in the supermarket all year round and the ready availability of many other items which form part of daily life in the developed world is assumed, it is well to remember where various commodities originate and the nature of the journeys they undertake to get to their respective markets. For example, concentrated milk is a major export of New Zealand with China in the northern hemisphere the biggest importer ( see: https:// oec.world/en/profile/country/nzl ). Brazilian coffee importers are mainly in Europe, the USA and Japan (see: https://oec.world/en/profile/hs92/coffee) but travels from South America all over the world. Bananas are exported widely (see: https://oec.world/en/ profile/hs92/bananas ) from South America to the furthest of ports and have to be delivered quickly to avoid over-ripening. This knowledge is particularly relevant to insurers who provide physical damage insurance for the various cargoes. It is equally important for liability insurers as part of their wider knowledge of the business in which they are engaged. Commodities are goods which are bought and sold by traders around the world, generally in large quantities or ‘bulk’. They fall into several main categories. While a considerable portion of world trade consists of finished products coming, in particular, from Asia-Pacific to North America and Europe in containers, sea carriage is particularly suited for the carriage of raw materials because of their sheer mass. This often makes it too costly commercially to use other forms of transportation to move the volumes required around the world. Crude oil and its derivatives This commodity tends not to be produced in the areas of the world that consume the majority of it. Hence, North America, Europe and Asia-Pacific are all net importers, despite the USA having access to both the Mexican Gulf and the Alaskan oilfields. In 2019, the top ten net crude exporters (not necessarily the same as the top ten producers) were Saudi Arabia, Russia, Iraq, Canada, United States of America, United Arab Emirates, Nigeria, Kuwait, Kazakhstan and Norway. 4 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade Map of the crude oil trade showing the main trade routes Different types of crude oil have different viscosities and densities. It can be a major challenge to get it safely to its destination and then to offload the complete quantity there. Practical problems arise from the necessity to keep it fluid enough to avoid it clinging to the tanks and pipelines of the ship. Some crude oils are nearly solid unless kept at a carriage temperature. Should the cargo not be carried at the right temperature, difficulties are likely to arise at discharge and there will be the potential for claims from cargo receivers for short landing. It is virtually impossible to empty the cargo tanks completely; though Crude Oil Washing or COW greatly improves outturns. Some so-called ‘unpumpable residues’ known as remaining on board or ROB will remain and this factor is well recognised in the industry such that the onboard quantity or OBQ will be measured before the next cargo is loaded on top. If the ROB is beyond what is normal it is also possible that claims will arise between shipowners and charterers related to this quantity; the outcome of which may depend on the voyage heating instructions, whether those instructions were followed and whether the ROB was found to be liquid, reachable and pumpable. Refining of crude oil will produce various petrochemical derivatives. The trade is generally segmented into clean and dirty, and tankers will generally operate in one or other segment as a high level of cleaning is required to move from dirty products, which may include Fuel Oil, to clean products such as Gasoil or Gasoline. The safe carriage of all petroleum is challenging but clean petroleum products may pose a higher risk of ignition and have a tight specification. Disputes regarding contamination of products sometimes arise and their outcome will often depend on tank cleaning history and analysis of representative samples of the cargo at various stages. P&IQ | MODULE 1 THE SHIPPING BUSINESS 5 Chapter 1 Gas The term ‘gas’ generally refers to one of two generic groups of products, namely liquefied petroleum gas (LPG) and liquefied natural gas (LNG). LPG consists mainly of propane and butane and is non-corrosive, odourless and colourless. Propane boils at -43ºC and butane at -0.5ºC. LPG is generally transported both chilled and compressed so that it maintains a liquid state. 6 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade LNG consists mainly of methane and boils at a far lower temperature than LPG (-160ºC). Reducing either of these gases to a liquid reduces their volume considerably (by 600 times) thus facilitating transportation from the production location to the final destination. Transport is effected by purpose-built vessels. LNG and LPG both require liquefaction terminals in the exporting country and, at the other end of the journey, receiving or regasification terminals in importing countries. Exporting facilities are located in countries such as Algeria, Australia, Indonesia, Libya, Malaysia, Nigeria, Norway, Oman, Qatar and the United Arab Emirates while importation facilities exist in Belgium, China, France, India, Japan, South Korea, the USA and the UK among others. Action step: Review the website for Dragon LNG (https://www.dragonlng.co.uk/ about-us/our-terminal/liquified-natural-gas) and see how natural gas is used in the UK, both domestically and commercially. Coal Coal derives from peat that has undergone changes in temperature and pressure over millennia to create progressively: soft lignite or brown coal, Bituminous coal and hard anthracite coal. This is produced principally in China, India, the USA, Indonesia, Australia,Russia, and South Africa. It is commonly exported from Indonesia, Australia and Russia to China, India & Japan. In Europe, Germany and Turkey are major importers. Coal has the propensity to self-heat or omit noxious and flammable gases. The safe carriage of such cargoes is subject to the International Maritime Organization’s International Maritime Solid Bulk Cargoes Code (IMSBC Code). The key element of this code is that shippers must provide sufficient information, relating to both the physical and chemical properties of the cargo being loaded; including whether it is liable to self-heat or emit Methane gas. To control these risks ships’ crews are required to monitor the temperature of coal during loading and carriage and to test the atmosphere of the holds for Hydrogen Sulphide, Methane and Carbon Monoxide at regular intervals. Due to the complex nature of the risks, including fire or explosion, and the related remedies it is often therefore important that findings of excess gases and or temperature are shared with coal experts so that prompt and precise advice is obtained on the best control actions. P&IQ | MODULE 1 THE SHIPPING BUSINESS 7 Chapter 1 Ores Ores are natural rock or sediments containing valuable minerals or metals. Apart from major ores like bauxite containing Aluminium or various Nickel or Copper ores, Iron ore is the most commonly exported ore; predominantly by Australia, Brazil, South Africa, Canada and the Ukraine. The vast majority of iron ore is exported to the Asia- Pacific region in particular to meet the increasing demand of the Chinese steel mills. Bauxite (aluminium ore) is produced mainly in Australia, China, Brazil, Indonesia, Guinea and India and exported to northern Europe. The safe carriage of ores is subject to the IMO’s Solid Bulk Cargoes Code (IMSBC Code) but a number of ores, particularly if in fine grains or containing significant moisture, present a greater danger to the vessel. Should these ores exceed their Transportable Moisture Limit (TML), the vibration of the ship can cause Liquefaction, creating an unstable slurry in the cargo holds which will compromise the stability of the vessel leading to risk of capsize, particularly in rough weather. Shippers of such cargoes are required to analyse the cargo Moisture Content (MC), Flow Moisture Point (FMP) and TML and provide the vessel with a declaration of the cargo group listed by the IMSBC Code as well as the MC and TML. Masters need to be watchful of this type of cargo and will often carry out preloading can tests to reveal the propensity for liquefaction.. 8 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade Cement There are many types of cement but the most common one is Ordinary Portland Cement produced from limestone and other minerals which are heated to form hard Clinker before being ground and mixed with gypsum. Cement is produced principally by countries such as China, India, the United States of America, Turkey, Brazil, Russia and Saudi Arabia, and, given its use as a basic building material, is imported in most countries. Large shipments will tend to be in bulk but cement can be carried both as bagged and containerised cargo. It is important to take into account the different grades of cement when it is carried in bulk, as they differ in their specific gravities and therefore in the volume of each that can be loaded. Some cements are very dusty cargoes, so the chance of their contaminating other cargoes or shoreside facilities is high. Care should be taken at loading and unloading to cover other cargoes to prevent contamination and to avoid any ingress of water. Hold cleaning after the carriage of bulk cement can be problematic. Fishmeal Fishmeal is a protein-rich substance obtained from fish and used as a food supplement for poultry and other animals. It can also be used as a fertiliser. Over 80% of the world production comes from just 10 countries, with Peru and Chile dominant. Fishmeal is now used worldwide, particularly in the fish farming industry. For more information see the IFFO The Marine Ingredients Organisation website at www.iffo. P&IQ | MODULE 1 THE SHIPPING BUSINESS 9 Chapter 1 com. Fishmeal is a cargo that is susceptible to spontaneous combustion. When carried in bulk, it is subject to the IMO Solid Bulk Cargoes Code (IMSBC Code). Ships should be fitted with fire-fighting systems that can fill the hold with carbon dioxide (CO2). Cargoes are treated with an antioxidant before being loaded to minimise the chances of heating and spontaneous combustion. Certification relating to the antioxidant treatment should be provided to the carrier at the time of loading. Fishmeal is also extremely pungent; it can be a major taint risk to any other cargoes being carried. It can be carried in bulk, bags or containers, but the need for watchfulness in relation to cargo heating is equally relevant for all three methods. The stowed cargo is fitted with thermocouple temperature sensors and readings are recorded at regular intervals throughout the carriage. Fertiliser This commodity historically included, organic fertilisers such as guano, bonemeal and dried blood. But it is more common today to ship mineral derived fertilisers such as Potash and modern synthetic fertilisers such as monoammonium phosphate (MAP) and diammonium phosphate (DAP). A fertiliser is a product that is added to soil to provide nutrients for the plants being grown, so most fertilisers have the same basic chemical components in varying proportions. The leading urea exporters include China, Qatar, Saudi Arabia, the Ukraine, Iran and Egypt. Fertilisers are mostly carried in bulk. This enhances their hygroscopic (water-attracting) potential, and when they dry out again they can cake. Any fertiliser containing ammonium salts or urea must not come into contact with alkalis and if heated, they will start to decompose, giving off toxic gases. When carrying these cargoes, care must be taken to ensure they do not come into contact with hot surfaces such as steam pipes or cargo lamps. Furthermore, no hot work, such as welding, should be done in the vicinity of fertiliser cargoes. Clean holds are very important for the carriage of fertilisers. Residues of cargoes such as grain are of particular concern as there is a danger that, if the grain is diseased, the fertiliser will also become infected. If the fertiliser were then applied on land the disease or infestation would potentially become far more widespread. Foodstuffs Wheat is exported to Africa, northern Europe, Saudi Arabia and the Asia-Pacific region, principally from the United States of America, Canada, France, Australia, Russia and Germany. 10 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade The safe carriage of grain and related products is governed by the IMO Code for the Safe Carriage of Grain in Bulk (SCGB). It is very important that, at the time of loading, the holds are completely clean – no loose rust scale and no residues of previous cargoes can be allowed even if they were grain cargoes. Insect infestation can be prevented by appropriate fumigation. If the cargo arrives contaminated, cargo interests will bring claims against the carrier. Fumigation of grain cargoes is often carried out on board and great care needs to be taken to ensure this is done professionally to avoid the risk of toxic gases escaping the holds to the crew accommodation and to avoid the risk of the fumigation process – which involves exothermic chemical reactions- leading to the development of fires. The stability of the ship during loading is vital. Grain loading is subject to detailed rules and regulations contained within the SCGB Code. Failure to comply with these can lead to delays, additional claims and costs which might fall on either the shipowner or the charterer. Soybeans are primarily produced in the USA, Brazil and Argentina and are shipped to the Asia-Pacific region and northern Europe. Maize is another commonly shipped grain; with the USA, Argentina, Ukraine and Brazil being the major exporters. Cocoa is mainly produced in the Ivory Coast, Indonesia, Ghana, Nigeria, Cameroon, Brazil and Ecuador and is shipped practically everywhere in the world. Sugar comes in two forms. Sugar beet is viable in northern climates, and sugar cane requires a warmer climate. The main sugar-exporting countries are Brazil, Thailand, P&IQ | MODULE 1 THE SHIPPING BUSINESS 11 Chapter 1 Australia, India and Mexico. It is shipped everywhere in the world. Although beet sugar can be grown in colder climates, over 75% of the world production comes from the cane form. Coffee. The top five coffee exporters are Brazil, Vietnam, Indonesia, Colombia and Ethiopia. The largest importers are the USA, Germany, Italy, France, and Japan. Sugar, coffee and cocoa suffer from a common problem when they are transported in bulk by ship. Condensation damage is a real risk in this trade because cargoes usually come from a warmer climate to a colder one. Cocoa and coffee both have a tendency to sweat and give off moisture if not ventilated properly. Sugar is hydroscopic and attracts moisture (including that given off by a sweating cargo) and can also suffer very badly from moisture damage. Cargo carried on a vessel with poor ventilation or without watertight holds risks arriving severely damaged at destination. However, the carriage conditions are not always at fault and expert input is often required to determine the actual cause of damages discovered which may include a high moisture content. Ventilation is not always possible or effective and moisture inherent in bulk grains will migrate on a voyage and may more likely lead to some damage on longer voyages. Rice. Though usually carried in bags, rice is another common cargo and one of the world’s principal foods that can suffer moisture damage and infestation. Fresh fruit and vegetables: Much of what appears on the supermarket shelves today has travelled a long way to get there, often by ship. Fruit and vegetables are living organisms, so they ‘breathe’, giving off carbon dioxide. If this respiration is not controlled, it will create heat. This will cause the fruit and vegetables eventually to rot and decompose. This natural tendency is what insurers call inherent vice - a characteristic or intrinsic attribute of the commodity concerned; and this factor can also be relevant to damage to grain cargoes. Although this intrinsic process cannot be avoided, it can be mitigated by the shipowner controlling the atmosphere in which the goods are carried. This can be achieved by ventilation – several air changes will be needed each hour – or by refrigeration, which slows the process down. Often the challenge for the shipowner is to manage the various needs of different types of cargoes, even if they are all fruit and vegetables. Apples need to be carried in a certain way, bananas in another and citrus fruits in yet another. Each cargo must be kept away from any other that it might damage or be damaged by. Commodities of these types used to be carried in so-called ‘general cargo’ or ‘break- bulk’ ships or in ships equipped with refrigeration – the so-called ‘reefer’ ships. Today, they are more commonly carried in containers which are equipped so that the atmosphere within each container may be controlled by ventilation or refrigeration. Where a cargo arrives damaged by inherent vice, the loss will probably fall upon the cargo owner. The reasons for this are: 12 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade cargo underwriters rarely cover inherent vice; carriers by sea may have a specific defence to claims for inherent vice under the contract of carriage. Cotton Cotton is exported mainly from the USA, India, Australia, Brazil and Uzbekistan, and is exported mainly to China, Indonesia, Turkey, Bangladesh and Vietnam. Raw cotton is highly inflammable, has a tendency to ignite spontaneously and is subject to the International Maritime Dangerous Goods [IMDG] Code which lays down rules for the safe transport by sea of dangerous cargoes. Loading cotton requires great care including the prior priming of the ship’s fire-fighting equipment and the use of battery-operated fork-lift trucks. Should fire break out at sea the only option is to seal the hatches and then flood the holds with carbon dioxide. Steel Steel is a key commodity. It is used for the building of ships and forms an important part of many manufactured items. The world’s largest steel export producer is China followed by Japan, South Korea, Russia and Germany. Steel comes in a number of different forms, from partly processed ingots or slabs to semi-finished products such as Hot Rolled coils, and wire rod and finished products such as pipes, tubes, Cold Rolled Coils, rebar and tinplated steel for the food industry. As the semi-finished items will be further processed at the place of destination, they are not generally wrapped for shipment but should be given some protection against moisture by a coating of oil or grease. Even some stainless steels are not immune to rusting to some degree so that even unwrapped items need to be protected from moisture. Finished items should be appropriately packed. Both finished and semi-finished steel products are prone to damage through bad handling, particularly by loading machinery and may be adversely affected by seawater. Motor vehicles Motor vehicles – both commercial and private consumer-based – are a major export and import product for many countries. The principal exporters of motor vehicles are Germany, the USA and Japan. P&IQ | MODULE 1 THE SHIPPING BUSINESS 13 Chapter 1 The map shown above is an example of a typical car carrier trade route (in this instance, Wallenius Wilhelmsen Logistics), where the voyage brings vehicles from Asia for discharge at European ports. Containers The use of a standard size metal box in which to transport goods on different modes of transport was invented and patented in 1956 by Malcolm McLean, the owner of a large US trucking company. He wanted to speed up the slow process of loading and discharging cargo on a piece-by-piece basis, the norm at that time for moving cargo from trucks to trains, to ships and into warehouses. The basic concept of containerisation is simple. The container is a standard size steel or aluminium box which is robust enough to carry a variety of cargoes, to withstand being loaded and unloaded from different means of transport and to bear the weight of other containers being stacked on top of it. Over the last 50 years the standard dimensions of a container have remained more or less constant: 20 or 40 feet long, 8 feet wide and 8.6 feet high. A basic 20-foot container is described as a TEU (twenty-foot equivalent unit) and this is the measure in which the capacity of all container ships is stated. A 40-foot container is therefore two TEUs. Although originally developed for dry cargoes, containers now exist in a number of specialist types, generally conforming to the standard external shape and size. Containers are also now available for carrying liquids and refrigerated cargoes as well as those of unusual shape and size, for which a container with no top (an ’open-top‘ container) or open sides (a ’flat rack‘) is appropriate. 14 INTERNATIONAL GROUP OF P&I CLUBS  Shipping and world trade The types of trades shown in the map above include: Asia to Europe and Australia – car parts, electrical goods, clothes, and toys; Australia to Asia – meat and dairy products, metals, timber, scrap metals; Europe to Asia – chemicals, timber, machinery, alcohol, metals; Europe to Africa – car parts, chemicals, paper, machinery, electronics; Africa to Europe – fruit, cocoa, copper; India to Asia – cotton, machinery, food products; the Middle East to Asia – aluminium, petroleum products, scrap metals; Asia to the Middle East – cars, machinery, textiles. P&IQ | MODULE 1 THE SHIPPING BUSINESS 15  Module 1 CHAPTER 2 MARINE HAZARDS  Marine hazards What you’ll learn in this chapter Marine hazards Knowledge rating The significant natural hazards to safe navigation 2 Mitigating the risks of natural hazards 3 3 2.1 The significant natural hazards to safe navigation Navigating a ship from the beginning through to the end of a voyage requires considerable skill and experience. The marine environment presents a number of natural effects and hazards. As discussed above, shipping generally follows regular routes around the globe and each year the same types of issues and claims arise. In the following topics we explore these natural hazards, how they come about, and what can be done to take advantage of them, avoid them or minimise their impact as appropriate. Every hazard can produce a claim on the hull, cargo and/or liability insurers if it is not properly addressed. Currents Tides River ports Overfalls Whirlpools Waves Swell Storm surges Freak waves Tsunami Wind Katabatic winds Windstorms Fog Ice P&IQ | MODULE 1 THE SHIPPING BUSINESS 17 Chapter 2 Sandbanks and sandbars Favourable tides, currents and winds during a long voyage can reduce the voyage time significantly, reducing the amount, and therefore cost, of fuel and other consumables used during the voyage. Additional cost can also be incurred if a ship has to ’take the long way round‘ to avoid bad weather, fog or ice, although by doing so, the ship may avoid even more costly damage to itself, its cargo or its crew. The safe and efficient navigation of ships involves the use of sophisticated satellite, weather forecasting and routeing services by skilled navigators to ensure that the voyage is conducted in the most efficient and economical way. Currents The oceans are in an almost constant state of flow. There are two types of ocean current: Surface Currents – controlled by prevailing winds and atmospheric systems. These roughly make up the top 400m of the ocean. These currents can also affect the climate on land. A well known example of such a current is the Gulf Stream, which helps to make north-west Europe, especially the UK, much more temperate than any other region in the same latitudes. Deepwater Currents – also known as Thermohaline Circulation. These normally occur below the 400m depth referred to above and make up the remaining 90% of the ocean. They are controlled by changes in temperature and salinity as water moves between latitudes. Unlike surface currents, deepwater ones have little impact on the safe navigation of ships. Coriolis effect Currents in the northern hemisphere are pushed to the right due to the Coriolis effect caused by the rotation of the earth. In the southern hemisphere they are pushed to the left. This circular motion creates ‘gyres’, circular currents found in all ocean basins. 18 INTERNATIONAL GROUP OF P&I CLUBS  Marine hazards The five major ocean gyres Tides Tide refers to the rise and fall in sea levels caused by the gravitational forces exerted by the moon and the sun on the earth as it rotates each day. The height of each tide is primarily affected by how close the sun, moon and earth are to being on the same axis. Atmospheric conditions and prevailing winds also affect the height of tides. Normally, there are two high tides and two low tides in each day. The ocean is constantly moving from high tide to low tide, and then back to high tide. There are about 12.5 hours between the two high tides. Spring tides occur twice in each lunar month when the sun, moon and earth are aligned. This alignment allows the gravitational effect of the sun and moon to combine and cause the highest tides followed by the lowest tides in the lunar month, producing the largest tidal range. Neap tides occur when the moon is furthest from being aligned with the earth and sun at a point where it exerts the weakest possible effect on the tides. Consequently, neap tides have the smallest tidal range. During spring tides the tidal flow is at its fastest; conversely, during neap tides the tidal flow is at its slowest. Tides are a worldwide phenomena but are normally only discernible where the depth of water decreases close to land masses. P&IQ | MODULE 1 THE SHIPPING BUSINESS 19 Chapter 2 As with currents, the effect of tidal streams should not be underestimated. Not only can tides significantly speed up, or slow down, a ship’s progress through the water, they can also carry a ship significantly off course unless measures are taken to allow for tidal drift. Navigational charts show the depth of water below chart datum. To find out how deep the water is at any given time, the height of the tide for that particular time must be calculated and added to the depth shown on the chart to arrive at the overall depth of water. Where the depth of the ship below the waterline, normally referred to as draught, exceeds the overall depth calculated above, then it must either wait until the tide has risen to a point where there is a sufficient depth of water, or take a different route through deeper water in order to arrive at its intended destination. Berthing in tidal ports may be dependent on the height of the tide to ‘lift’ the ship over shallow areas in the approaches or even at the berth itself where it might intentionally dry out at low water. Other ports ensure a constant depth within the port by building a lock, or locks, through which ships must pass from the approaches, where they are subject to the changes of depth resulting from the rise and fall of the tide, into the port where there is no rise or fall of water level. Tidal ranges vary from one place to another; for example, in the Bay of Fundy in Canada, the tide rises and falls over 16 metres, whereas in the Mediterranean there is little or no tidal range. There are a number of sources of tidal information available to the navigators on board a ship including:- tide tables as published by the national hydrographical office; tide tables as published by the local port authorities; various internet sources; tidal information as shown on the appropriate chart for the area in question. River Ports Loading at river ports is also common and vessels must often navigate in restricted channels, which have to be maintained by dredging, and must compensate for strong river currents which may vary with both tide and upland rainfall. In addition, there will often be varying depth limitations that can affect the quantity of cargo that may be loaded. Masters also need to be mindful of structures such as bridges which may 20 INTERNATIONAL GROUP OF P&I CLUBS  Marine hazards impose a limitation on the air-draught of the ship which is the distance between the highest part of the ship and any structure above it. Overfalls Also known as ‘tidal rips’. These normally occur close to land when: there is a sudden change in depth; a sudden change in the seabed exists, such as found off a headland; two tidal streams flowing in opposing directions ‘collide’. Overfalls would not normally be dangerous for a larger ship unless it loses power, when the sudden movements caused by the confused sea may well cause injuries to crew, cause cargo lashings to fail and provide the extra risk of grounding due to their proximity to the coastline. For this reason, large vessels will avoid overfalls in just the same way as smaller ones. One of the largest overfalls in the UK exists south of Portland on the south coast. Whirlpools Whirlpools are the result of strong opposite currents (hot vs cold) colliding, or changes in landforms along the coast or under the surface. They can also occur when the incoming tide meets the ebb of the last tide. These are comparatively rare and will be avoided by ships navigating through an area where they are known to exist. Like overfalls, whirlpools tend to occur during a particular part of the tidal flow and hence are not permanent features. Whirlpools might also rarely be encountered on fast flowing rivers Waves Waves are defined as an undulation of the sea surface caused by the local wind conditions. Waves are particularly dangerous to ships when they are breaking. This can happen purely as a result of wind speed or in combination with other factors such as wind against tide or where the depth of water in the area is changing quickly. The most obvious example of the latter is the breaking seas seen from a gently shelving beach in strong wind conditions. Swell These are waves which are not produced by the prevailing wind at a locality; but relate to historical and usually distant winds and storms that have since travelled across the seas to arrive in the locality of the observer. Compared to waves produced by local winds, swell waves may have a much longer distance between crests, (that is, wavelength) and P&IQ | MODULE 1 THE SHIPPING BUSINESS 21 Chapter 2 rarely break. In their own right, such seas do not normally present a risk to shipping; but significant swells can still reduce a vessel’s speed and they can combine with local wind driven waves to produce a dangerous confused sea which might increase the risk of heavy rolling. Storm surges A storm is caused by an intense area of low air pressure. As a result of this low pressure the seawater level increases in the immediate area of the storm. This ‘bump’ in the sea level can be carried along by the long waves generated by the storm, which often travel faster than the storm itself. In deep water these long waves quickly dissipate. However, when such waves are produced close to shallow waters their energy has no time to dissipate and their speed reduces as the water depths decrease, causing the wave height to increase. The combination of big waves and a ‘bump’ in the sea level can be a risk to low-lying communities, including users of tidal ports. To avoid such events, the best place to be is at sea and away from the coastline. Some tidal ports will order ships to leave and proceed to sea when a storm surge is expected. Short surges may be more pronounced when combining with spring tides. Freak waves Freak waves or ‘rogue’ waves are relatively large and spontaneous ocean surface waves that are a threat to all ships, regardless of type or size. They are more precisely defined as waves whose height is more than twice the significant wave height (SWH), which is itself defined as the mean of the largest third of waves in a wave train. However, it is not fully understood what causes these waves. Rogue waves are therefore not necessarily the biggest waves found at sea; rather, they are exceptionally large waves for a given sea state. They were thought to occur only in deep water or where a number of physical factors combine, such as where strong winds and fast currents meet. However, recent satellite imagery has shown such waves in comparatively shallow waters like the Baltic. Reports often refer to such waves looking like a ‘wall of water’, meaning they are very steep-sided as well as being very high in comparison to other waves encountered before and after the rogue wave, and possibly preceded by a very deep trough. The areas of highest predictable risk appear to be where a strong current runs counter to the primary direction of travel of the waves. The area near Cape Agulhas off the southern tip of South Africa is one such area; the warm Agulhas Current runs to the south-west, while the dominant winds are westerlies. While seafarers can avoid these areas, we now know such waves can occur in areas which do not have the characteristics referred to above. Fortunately, such waves are rare events, hence the seafarer can only remain alert to their existence and have strategies in place to deal with one should such a wave be encountered. Examples of casualties attributed to rogue waves are: MS München (mid-Atlantic, December 1978) – lost at sea leaving only ‘a few bits of 22 INTERNATIONAL GROUP OF P&I CLUBS  Marine hazards wreckage’ and signs of sudden damage including extreme forces 20m above the waterline; MS Louis Majesty (Gulf of Marseille, Mediterranean Sea, March 2010). An unexpected pack of three waves of 26 feet hit the ship while it was on a cruise between Cartagena and Marseille. Two passengers were killed in a lounge by flying glass from a shattered window. Damage to the ship was done by the second and third waves. While these waves were much lower than freak waves appearing in open oceans, published evidence indicates that their behaviour was similar to that of freak waves. Tsunami A tsunami is a series of waves with a very large wavelength. Tsunami are caused by sudden mass movement in the earth’s crust under the ocean as a result of earthquakes and landslides. The resulting wave(s) is not always obvious as the wavelength can be hundreds of miles, but can travel at up to 500mph (or 800 km/hr) in the open ocean. As the waves get nearer to land and encounter shallower depth, their speed reduces, causing the wave to rise to potentially disastrous heights capable of overwhelming sea defences and causing significant damage inland. Ships at sea may not notice the tsunami wave but, should a wave hit the shore, and a port area in particular, serious damage is likely. Should a tsunami warning be in place, ships should, if time permits, head out of port into deeper water. Diagram of a tsunami Wind Wind is caused by differences in air pressure, measured in millibars (mb), in the atmosphere. At sea level air moves from an area of high pressure to an area of P&IQ | MODULE 1 THE SHIPPING BUSINESS 23 Chapter 2 low pressure. The greater the difference in pressure, the faster the wind becomes. ‘Normal’ pressure is approximately 1013mb. Pressure is depicted by isobars, meaning lines of constant pressure. These lines are shown on weather charts. The closer together these lines are means an increased ‘pressure gradient’ which forecasts higher wind speeds. This is shown on the map below: Low pressure systems, also referred to as cyclones, are associated with strong winds and stormy weather. High pressure systems, also referred to as anti-cyclones, are normally associated with low winds, clear skies and droughts, and can feature extreme temperatures. In the right conditions, such systems can still produce strong winds, so their reputation for low wind speeds can be misleading. Katabatic winds These offshore winds are caused by cold air descending from high ground down towards the coast and ultimately offshore. This type of wind is most prevalent in temperate or high latitudes where the coast is backed by snow-capped mountains. If this natural flow of air down from the tops of mountains is held back by, for example, warm air rising up the side of the mountain, the mass of cold accumulates near the top of the mountains. When this mass of cold air overwhelms the rising warm air, it rushes down the mountainside, gathering more air/mass and energy as it descends, before rushing out to sea. This might only create a strong wind but, with the right 24 INTERNATIONAL GROUP OF P&I CLUBS  Marine hazards conditions, it can produce very high, and consequently damaging, wind speeds. There is little or no warning of these winds. It can go from flat calm to storm force 10 in less than a minute. Such winds are very dangerous for small craft and any ship at anchor. Ships alongside a berth are equally at risk. Examples include the Mistral in the Gulf of Lion in Southern France and the Bora along the Croatian coast in the Adriatic Sea. Windstorms There are a number of descriptive words used throughout the world for such storms, for example, hurricane, cyclone and typhoon. They are all intense low pressure systems involving wind speeds up to 140mph (or 220km/hr) and gusting up to 160mph (260 km/hr). Such storms occur in the Atlantic, Pacific, and Indian Oceans. Generally, these storms start within five degrees of the equator and take a westerly track while turning slowly towards the North or South Pole and, in some cases, even turn back on themselves. These storms are inherently dangerous and the science behind predicting the path they will follow has still a way to go before it is 100% accurate. The wind speeds involved produce huge waves, often breaking, capable of dumping hundreds of tons of water on board a ship unlucky enough to find itself in the midst of such a storm. The combination of wind and waves is one of the most treacherous a Master of a ship has to face, because it can not only threaten the watertight integrity of the ship but also its stability, particularly if it is carrying a cargo which is likely to shift in the extreme conditions. Weather conditions of this severity are described as ‘perils of the sea’ and can afford a defence to cargo claims that are caused by them. Action Step: For background, consider the report into the loss of the SS EL FARO in 2015 https://www.ntsb.gov/investigations/accidentreports/reports/mar1701. pdf. As early as 1704, Daniel Defoe (the celebrated English writer) described a storm that visited the British Isles the previous November, using a 12-point scale that he called a table of degrees. He refers to the scale being the ‘bald terms used by our sailors’. Francis Beaufort devised the scale that now bears his name while serving on board HMS Woolwich in 1805. By 1829 he had risen to being the hydrographer of the British Royal Navy and in 1831, it was he who commissioned the famous voyage of the Beagle on which Charles Darwin sailed. It was only in 1838 that the Royal Navy first instructed its ships to maintain hourly information on wind speed and direction within their logs. P&IQ | MODULE 1 THE SHIPPING BUSINESS 25 Chapter 2 The Beaufort Scale Wind Force Standard Speed Sea Criteria Number Description (Knots) 0