Newsletter 06-21

Bulkers carrying containers; operational, contractual andinsurance considerations

7th October, 2021

Overview

Increasing demand for the shipment of containers has generated interest in,and the utilisation of, non-cellular or specifically designed ships for theirtransportation: whilst modern safety and loss management techniques canbe applied to reduce associated operational risks, there are a multitude ofconcerns and considerations related to the subsequent change of userequired for the carriage of containers by these ships, which include bulkcarriers and general cargo ships.

We will address the three main categories of such considerations below:

1. Operational
2. Contractual
3. Insurance

The adaptions required to convert non-cellular ships to load, carry anddischarge containers effectively, safely and legally are complex and there isno one exhaustive check list to be referred to, however we hope that this mayconstitute a starting point for anyone with interest in the requirements andprovide a launch pad for the required conversations with the interested andnecessary parties.

Operational Considerations

The main operational considerations include the following:

Safety:

The risks associated with shipping containers are high, even when a ship isspecifically designed to service the needs of their carriage (understanding ofthese risks and how to mitigate them for non-cellular ships is therefore of utmost importance - the recall of several large incidents involving cellularcontainer ships will be easy for most readers of this newsletter).

Some specific considerations and the related regulations and requirementsare briefly below discussed:

1. Seaworthiness (all related Class and statutory requirements must besatisfied)
2. Ship’s structure and strength:
3. - The allowable load density can be increased by reinforcements,subject to approval by Class
4. - All welding works must be carried out by a Class-approved welder
6. - Stability analysis:
7. The vessel must comply with stability and longitudinal strength criteria
8. The ship’s manuals must be updated
10. Loading computer systems may also need to be updated
14. - Cargo securing/care:
15. CSS code compliance is required
16. CSM must be updated and approved to the satisfaction of both Class and the flag state
18. Safe access to cargo is required for monitoring at sea and managing securing arrangements during loading and discharging
20. Operational matters and emergency response plans should be incorporated into the vessel’s SMS
22. Twist locks and lashings may be required and must be appropriate to the intended use
26. - Firefighting capabilities (FFA): The carrying of dangerous goodsmust be done so in compliance with the IMDG code and additionalequipment may be required
28. - Crew (SMS, EMS, MFAG)
30. - Weather and environmental considerations Exposure of deck cargo to wind and ice
33. Statutory and classification:

• - Flag state requirements: compliance with regulation such asSOLAS and COLREG
• - Classification Society requirements: the vessel may need to bereclassed and there will be a multitude of requirements andregulations to be complied with

• 
  It is worth noting that any changes may need to be verified by the externalISM audit of the office and vessel and Class may furthermore require asurvey to reconfirm the ship’s class.

Contractual Considerations

1. Bills of lading:
2. - Some contracts of carriage may be adequate, however (if thecontainers are to be carried on deck) the bill of lading must beproperly remarked so that the Owners’ liability is excluded and therisk therefore lies with the shipper.
3. - The clubs suggest adequate wordings for inclusion in bills oflading.
6. Charter parties:

- Owners should check if container carriage is excluded under theterms of the charter party as usually a standard c/p form is unlikelyto be suitable without substantial amendments.

Insurance Considerations

The complexity of the arrangements required to effectively carry containerson non-cellular container ships generate the possibility of prejudicingOwners’ P&I cover, primarily through the material change of risk that may begenerated through such arrangements. It is therefore important that we arenotified well in advance so that we may discuss with the Club anyrequirements to avoid prejudicing cover (in some circumstances, anadditional cover may be necessary).

Additional Notes

It is of fundamental importance that the updating, approval and revision of alldocumentation and requirements is completed prior to loading for a multitudeof reasons, including those that have above been mentioned.

It should be noted that if the containers are to be carried for a single voyage,as opposed to on a more regular or permanent basis, the impact on therequirements varies, such as an exemption letter being available from Class,rather than the requirement for reclassification.

Whilst the above list of considerations is not exhaustive, it should form astarting point from which the relevant requirements can be discussed withP.L. Ferrari, Class society and flag state.

This newsletter, and our information archive, can also be accessed atwww.plferrari.com

P.L. FERRARI & Co. S.r.l.