Carriage of Bulk Cargoes
By Dr. John Allum of Hannaford Forensic Services,
with Christian Ott, Assistant Vice President, Skuld Hong Kong
Grown in Asia for over three millennia, today the world’s top producers of soya are the United States, Brazil, Argentina, China and India. With top importers spread geographically from Japan and China, across the European Union and into Mexico, and traded on the futures market in Japan, China, South Africa and the US, moving soya beans on bulk cargo carriers is big business.
Many Skuld members, both owners and charterers, carry this cargo regularly and safely. Yet there have also been periods of increased claims, at times very significant claims. The commodity can fetch very high market prices and during times of severe price volatility, there have been claims involving a complete rejection of the cargo. As can be easily calculated, those claims can reach tens of millions of dollars. But even when the claims are less dramatic, the high price per m.t. can cause routine claims of hundreds of thousands of USD, which are a concern for both members and the Association.
Soya beans are, of course, a perishable commodity and one cannot expect to store them indefinitely. The concept of “safe storage” is probably incorrect since there is no particular set of conditions under which bulk soya beans cannot be damaged. However, the two crucial aspects are heat and moisture. The period of safe storage (before noticeable deterioration occurs) depends largely on the initial moisture content, the temperature of the beans at loading and the subsequent storage conditions; higher temperatures and moisture content increase the rate of deterioration.
The effect of moisture content on the shipment of soya beans has been summed up in a House of Lords Judgment (Soya G.M.B.H. Mainz Kommanditgesellschaft v. White; 1983) which held that :-
- It is a natural characteristic of soya beans when shipped in bulk that if the moisture content of the bulk exceeds 14 per cent, micro-biological action, the nature and causes of which are unknown, will inevitably cause the soya beans to deteriorate during the course of a normal voyage from Indonesia to Northern Europe to an extent which will considerably reduce their value on arrival.
- With a moisture content of between 12 and 14 per cent (below 12 per cent no micro-biological action occurs), there is a risk that deterioration from micro-biological action can occur during the course of such a voyage. Whether it does or not depends upon factors that remain unknown. The range of moisture content between 12 and 14 per cent is referred to as the "grey area".
The American Society of Agricultural Engineers (ASAE) has published definitive data on the relationship between the moisture content of soya beans and the equilibrium relative humidity of the surrounding air at a variety of temperatures.
This data shows that soya beans are in equilibrium with surrounding air at 25°C at a moisture content of 13% to 13.3% at 65% relative humidity.
This means that at 25°C, soya beans with a moisture content higher than 13.3% will have an increased risk of being damaged during long term storage. Equally, soya beans with a moisture content lower than 13.3% at 25°C will have a decreased risk of being damaged; below 13% the risk is minimal. At temperatures above 25°C, the moisture content must be lower than 13% for safe storage, while at temperatures below 25°C it can be higher.
These values must be used with caution since there are differences in the values obtained depending on the variety of soya beans tested, the conditions under which they were grown and their post-harvest history. Thus, the value of 13% to 13.3% moisture content at 25°C represents a practical compromise in terms of stating a critical limit for the safe storage of soya beans.
From a loss prevention point of view as well as a claims handling perspective, however, we would state that each cargo must be viewed individually. Age, moisture content, oil content, FFA (Free Fatty Acid) content, temperature, storage conditions and transport history, these factors and more are all important when considering a particular cargo.
Shipments from South America
The standard contract specifications for South American soya beans often give a maximum value for moisture content of 14%. There may also be local by-laws which can provide that below a certain moisture content, the cargo is deemed - on the basis of the local rules - to be fit for shipment.
These laws / rules generally do not, however, take into account the other factors that may impact on the “shelf life” / “transport time limit” of the cargo. This can, and has in the past, led to difficulties when Shippers have insisted a particular parcel is fit for shipment on the basis of a certain “alleged” moisture content, but expert advice obtained by members and the Club viewed the cargo with more concern - taking all the relevant factors into consideration.
It has also been noted that the moisture level being claimed for a particular cargo may not always be accurate, with individual parcels being found (on testing) to vary significantly. A “bad” parcel of a few hundred tons of beans with a high risk of deterioration can affect the rest of the cargo in a particular cargo hold. At worst, it can lead to a rejection of the entire hold load at the discharge port with a consequently significant claim following.
The average passage from Brazil to PRC takes approximately 32 days; as such, practical consideration can and should be given as to what measures the ship can take to help protect the cargo and engage in good loss prevention.
Soya beans are a living cargo so there will be a natural tendency for cargoes composed of them to heat up because of biological activity.
Most natural organic products, including soya beans, loaded in equatorial and tropical climates tend to throw off warm, moist air during a voyage. While the vessel remains in equatorial waters, there is little risk of ship’s sweat occurring, as the ship remains at a temperature close to or above the dew point*. However, when the vessel enters colder waters and the structure cools, there can then be a significant risk of ship’s sweat occurring. Ship’s sweat can be prevented by ventilating the cargo spaces.
Ventilation can remove the warm moist air thrown off by the cargo with drier outside air, before sweat can form on the inside of the hold. However, the dew point of the outside air must be below the dew point of the air in the hold. If the temperature in the hold is lower than the dew point of the ventilating air, moisture in the outside air will deposit in the hold.
A guide of when to ventilate can be found by measuring the dew point of the air in the hold and if this is higher than the air outside, then ventilation should take place. Changing the air in the hold in this case will ventilate the cargo space with little risk of condensation occurring.
Ventilation should be restricted if the dew point of the outside air is higher than the temperature of the cargo. To ventilate under these conditions would cause condensation on the cargo when the outside air with a higher dew point comes into the cargo space.
The temperature of the air both outside and in the holds should be regularly taken, along with dew point readings. By knowing these figures, the decision of whether to ventilate or not can be taken.
However, ventilation only affects the surface of the stow, thus only removing heat from the top. Owing to the nature of soya bean cargoes, changes in temperature and humidity at the surface of a fully laden hold will not be felt throughout the hold; changes at the surface of a grain type cargo will not be felt by the material at the centre of the hold. It follows then that the condition of a grain type cargo, with the exception of the surface layers, will be almost entirely dependent on the condition of the cargo at the time it was put into the hold.
The main cause of heating in soybean cargoes is excessive moisture. Thus, inquiries should be made in order to provide as much information as possible on this point.
Before engaging in this trade, members should always consider, what their charterparty provides, but also what their sub-charter provisions may be. It can be - especially for the time charterer - that they will face different demands from their owners compared to what the shipper / voyage charterer expect.
For those members engaging regularly in this trade, it will be appropriate to consider special charter provisions as well as load port sampling regimes in order to manage the risks involved.
Ideally, the following documents should be obtained for each cargo of soybeans carried, particularly so in the event that a claim for damage to the cargo is made :-
- Pre-loading survey report, if possible.
- The moisture certificate, or certificate of quality, at shipment.
- Copies of both the head charterparty and, if possible, any sub charterparty (assuming you are acting for charterers); if acting for owners, only the head charterparty may be available.
- Copy of the bill of lading.
- Copy of the mate’s receipts.
- Statement of Facts at load port.
- Stowage plan (especially if loading from more than one port).
- Commercial / contractual documentation in relation to the cargo which may reveal its age and history.
Ventilation can be carried out at all times that the dew point or temperature determinations indicate, and this practice should be followed to maximise ventilation and reduce risk of damage at the surface of the cargo. It is not necessary to cease ventilating during the day or night, unless the outside air is unsuitable in terms of dew point or adverse weather / sea conditions are imminent.
Often the shippers do not provide any information to the ship on how to stow and protect the cargo, leaving this to the Master’s discretion (subject to charter provisions between owners and charterers). The aim of ventilation is to minimise any adverse changes that might result in moisture damage to a cargo. A question may therefore arise as to whether a vessel carried out sufficient ventilation of the cargo and whether any of the alleged damage could be attributed to the ventilation strategy adopted.
The vessel should always record the ventilation strategy followed during the voyage.
Chinese Courts appear to attach great weight to these records and have often found against the ship for damage when there are no records to show the cargo has been ventilated.
If the cargo appears sound on arrival, this can help to minimise any potential problems; cases have occurred where the acceptance or refusal of the cargo has depended on the presence of a few kilos of surface mould.
| When loading soya bean cargo, consider whether it is worthwhile appointing a surveyor to assist at the load port. A specialist cargo surveyor may be particularly helpful in monitoring the condition of the cargo during loading. Moisture and temperature readings of the cargo as it is being put into the holds can provide an indication as to the likelihood of deterioration of the cargo during the voyage.
If in any doubt, do not hesitate to contact the Club for advice.