Steel is one of the core industrial products in the world today. In 2017 over 1,600 million tonnes of crude steel was produced worldwide (source: World Steel Association), with the top ten steel exporting states pushing out net exports topping 380 million metric tonnes.

Steel underpins industrial production, economic development and infrastructure projects and is estimated to contribute over a trillion dollars to global GDP directly from the steel producing and exporting sectors. Steel is a vibrant and growing global industry and is a vital component in the continued economic development of states.

Top Steel Exporting States 2017

Global Crude Steel Production 1990-2017

source : World Steel Association

Steel Cargoes Overview

Steel is shipped in a variety of forms, from pig iron for future production, slab for processing or variations of specialist finished or semi-finished products, all of which require particular care and attention before, during and after carriage. Steel, in any form, is a valuable cargo but processed and semi-finished products carry increased value and may be prone to expensive cargo damage if not handled and managed with great care.

Carriage by sea represents particular risks to the owner, charterer or to other stakeholders in the cargo, including financiers and the holders of stock management agreements.

For carriers of steel, the condition prior to shipment is of key importance and if this is not correctly recorded then the cargo owner may be able to bring a successful claim against the carrier in the event that the cargo is discharged in a damaged condition by alleging that the cargo was damaged whilst on board the vessel.

The steel trade is long-established, and there are best practices that can be followed in order to avoid a future issue relating to the pre-shipment condition of the cargo, either by the crew carefully checking and recording the condition of the steel or by appointing an experienced and competent surveyor to ensure that the condition of the cargo is understood prior to loading, and then ensuring that the condition of the cargo is accurately reported prior to shipment.

Issues Around Steel Cargoes

Most issues around steel cargoes arise either as a result of:

  • a poor pre-shipment inspection.
  • mechanical damage caused by poor handling practices.
  • mechanical damage caused by inadequate stowage.
  • wetting damage on passage.

Let’s briefly look at each of these issues in turn.

Pre-Shipment Survey

The carrier, normally the shipowner, has a duty to deliver the cargo in the same condition as it was loaded. If the carrier fails in that duty then they may become liable for any damage to the cargo that is noted during discharge. To protect the carrier and the charterer, a clear and accurate understanding of the condition of the cargo is needed before it is shipped, not only to reassure the cargo owner that their cargo is in good condition at the time of loading but also to protect the carrier from one potential source of future liability.

We will consider the role of surveyors in more detail in a future update.

“Pre-shipment inspection must be done before cargo is loaded”

Steel cargoes can often be damaged before they are loaded on to the vessel, either by exposure to adverse environmental conditions,  inadequate delivery handling or as a result of poor warehousing and storage practices while the cargo awaits the arrival of the ship. Any of these factors may lead to rusting, contamination or mechanical damage.

“Coated pipes are high-value products and any damage must be noted prior to shipment due to the criticality of coating defects”
“Contamination may be injurious to steel or necessitate additional processing costs, for example removal of grease where products are to be coated”

The Master must ensure that the condition of the cargo is understood before loading commences, and it is also vital that the Master ensures that the relevant bill of lading accurately describes the condition of the cargo prior to loading. Any damaged cargo should also be noted appropriately on a mate’s receipt.

“Presence and extent of rusting should be noted before shipment”

The vessel’s crew should determine the condition of the cargo on behalf of the shipowner. Owners can often engage the services of a surveyor with relevant experience of the cargo and who can accurately assess the condition and quality of the cargo. This can often involve specialized testing to determine if the cargo has been exposed to chloride contamination prior to delivery at the quayside and can, for example, give early indications of the likelihood of rusting in the near future.

Charterers, in particular, can manage their risks very effectively by engaging surveyors on their behalf to ensure their interests are protected at this stage, and this may include ensuring that the ship is presented in a condition suitable to load the cargo, particularly with reference to the weathertightness of the hatches.

Loading Practices and Mechanical Damage

Different steel cargoes require different handling techniques during loading and the correct equipment should be matched appropriately to the product being handled.

The incorrect method or misuse of equipment is one of the most common causes of mechanical damage to steel cargoes. Careful supervision of stevedores is required, and a detailed understanding of the load plan and feeding techniques employed by stevedores is required to minimise the likelihood of damage at this stage, which may be considerable if this phase is not supervised diligently.

“Handling practices must be suitable for the cargo and aimed at preventing damages such as deformation and bending”

Any damage to cargo must be recorded at the time it is discovered, and crews must ensure that individual items are correctly identified. It is preferable that damage is notified to both charterers and owners at the time it is discovered, as it may be necessary to remove and quarantine damaged items so that they are not shipped. The discussion on whether to ship a damaged item can save a lot of time and effort later on if charterers and owners are given that information at the time, and it is the task of the surveyors who may be appointed to ensure that their principals are fully aware of the status of the loading operation and the ongoing condition of the cargo as it is loaded.

As with any cargo, preparation of the hold and ensuring that hatch covers and seals are in first-class order is paramount. Surveyors may be engaged to conduct hatch testing to verify the weather tightness of hatches, and this is usually either a hose test or a test conducted using ultrasonic equipment. Each of these has advantages and drawbacks, and we will explore those later in this series of publications. Surveyors may also conduct chemical testing within the holds to ensure free from contaminants that may lead to corrosion.

“Testing of the weathertightness of hatches often prevents disputes later”

A special situation may arise when charterers are responsible for the loading and securing of the cargo under the terms of the charter party. In this instance, the Master should avoid giving instructions to stevedores. Any supervision provided by the crew must not be in the form of direct instruction or be construed as intervening in the work of the stevedores. The liabilities of charterers and owners must be kept distinct, and the temptation to directly manage the loading operation in this instance must be avoided. However, Masters must remember their overriding duty to take any action necessary to ensure the safety of the vessel if, in their judgement, that is likely to be compromised.

Inadequate Stowage Plan

Stowage planning requires a consideration of the suitability of the vessel for the intended cargo long before the vessel arrives. Very often charterers will make an assessment of the vessel before they fix business, usually assessing a range of options and testing potential stowage plans against the intended vessels as part of the suitability assessment before making a decision on fixing the vessel.

In brief, stowage planning requires assessment of the strength of the vessel tank tops versus the intended and potential load on the tank top and also an assessment of the physical dimensions of the cargo versus the design of the holds and hatch openings.

The vessel’s cargo securing manual can assist with assessment of the maximum permissible load allowed on the tank top, but the cargo securing manual may not cover every possible cargo and every cargo type, and consequently the cargo securing manual will have a section on simplified and advanced methods of calculating the maximum permissible load on the tank tops.

For slab cargoes this is a relatively simple consideration, and to a lesser extent pipe cargoes. For coil cargoes great care must be taken as the contact area of the bottom coil is small in relation to the size and weight of the coil, and point loading of the contact area of the coil can be significant. An additional consideration is that multiple tiers of coil increase the contact point load of the coils positioned on the bottom tier, and consequently this part of the stowage plan must ensure that the tank top can withstand the intended load. The cargo securing manual may provide instructions on the maximum number of tiers of coil that are permitted, but it is in the interests of the crew, the owners and charterers to ensure that stowage planning has been done by experienced and competent people to minimise the likelihood of damage to either the vessel or the cargo caused by overloading of tank tops.

A second major consideration of stowage plans is to ensure that the vessel is physically capable of safely loading the intended cargo. Pipes, in particular, can present issues with reference to loading if the vessel’s design is not suitable. Attention must be paid to the internal construction of the holds, especially the presence of ladders and other fittings that may effectively shorten the available space, and there must also be consideration of maximum stowage height when upper hoppers are present. The physical dimensions of the hatch opening may also be a limiting factor on the suitability of the vessel versus the intended cargo.

“Vessels must be assessed prior to fixing to ensure they are physically able to carry the intended cargo”

Finally, the method of securing and the dunnaging system must be understood and adequately resourced before loading commences. Dunnage must be specified beforehand and must be of heat-treated wood intended for the purpose of supporting the cargo. Improvised dunnage should be avoided. Lashing and securing of the cargo will depend on the cargo type, and a variety of methods can be used to interlock either pipes or coils during the loading sequence. We will cover these methods in detail in another briefing paper.

“Dunnaging, chocking and lashing must be pre-planned and understood prior to loading”

Wetting Damage On Passage

Steel is very sensitive to conditions within the vessel’s hold on passage. It is for this reason that the hatches must be verified weathertight prior to loading, and on occasion, vessels can be rejected by charterers on the berth if hatch testing indicates that the hatches are not weathertight.

Clearly, hatches that are not weathertight are not only a risk to cargo but also present a significant risk to the crew and the vessel, and ingress of water into a cargo hold is a serious matter in any situation. As far as the cargo is concerned, ingress of either rainwater or seawater will very likely result in rusting of the cargo.

That possibility aside, steel cargoes may also become wetted even when the hatches are weathertight through the action of ship sweat or cargo sweat. Crews must ensure that holds are suitably and adequately ventilated on passage, and this is achieved by diligent monitoring of the hold air dewpoint and dewpoint of the air outside the hold with the aim of minimising differentials and reducing the likelihood of sweating.

Keep In Touch

Call 0191 645 0095 for expert advice and rapid response. Our team of marine consultants are able to respond and assist with your marine claim, supervision or inspection and provide the coverage you need.

If you’d like us to keep you updated with relevant news and updates, please enter your details below.