Steel Cargoes Loading Survey at China,
the country with the largest steel products export
(A speech paper submitted to 2007 Asian Marine Insurance & Surveying Forum)
2007-11-15
Good afternoon, ladies and gentlemen. I’d like to start by thanking the organizer of the forum to invite me to be part of this conference. And the author makes grateful acknowledgement of my colleagues’ help from which much experience of the real practices in steel pre-loading survey was gained. The speech entitled “Steel Cargoes Loading Survey at China” would be discussed with all delegates here.
Recent years, China has been named the manufacturer of the world. Varies of goods are transported from China with large quantities everyday. As the surveyors always working at ports, we feel accustomed to the phenomenon that Australia or Brazil or India ore discharged by grab from the cargo hold piles up as mountains at berth, and at the same time thousands stacks of steel products placed on the open yard are subject to loading on board.
China has been playing a significant role since the country became the largest steel products output & exports country in 2006. Along with the fast and persistent growth paces of steel products international trade, the rapid development of steel cargo survey is also booming and consequently attract particular attentions from the different interests in field of transportation, such as cargo consignee, ship owner and its P&I club, and charterer, etc.
To address this phenomenon, I will highlight three broad issues that I hope will be useful to you for your discussion today. The first issue I’d like to discuss is a brief background of steel products exported from China. The second is the introduction of survey market access in China. For my third and final issue, I’d like to turn to a few particular items to be paid attention on steel loading survey in China.
Part I
Firstly, let’s look at brief background of steel products exported from China. With a review to recent years statistic of the transportation of steel products at sea, a prospects would be made after bringing and achieving following questions:
Ø How many steel cargoes are out from China?
China had become the biggest country for steel output & export all over the world since 2006. As statistics show indicated, the quantity of export steel products was 43,010,000MT in China at last year, which increased 109.6% more than the quantity in 2005. What’s more, steel products export project has been predicted the quantity would be 51,600,000MT this year, which increase further 20% year-on-year.
Ø How many vessels are loading steel cargo at china ports?
Averagely, there are around 150,000MT steel cargoes are being loaded onboard ocean-going vessels from Chinese ports everyday in the year of 2007. As a general loading rate of 2500-3000MT / day for one vessel, 50-60 vessels should be under loading operation with steel cargoes at Chinese ports everyday. Meanwhile, more vessels are waiting for berth at the anchorage.
Those steel cargoes are shipped from 10-15 main Chinese ports, such as Bayuquan, JinTang, Xingang, Qingdao, Lianyungang,Shanghai, Changshu, Zhangjiagang, Nanjing, Huangpu. Each of these ports certainly has 4-5 vessels loading steel cargoes everyday
Ø How many surveyors are working on steel cargo loading in China?
There are over a hundred surveyors are working at Chinese ports for steel cargoes shipment every day. As well as the prevention of cargo claims and cargo damage on board, surveyors are instructed by ship owner / P&I club / charterer , and any other cargo interests such as shippers/consignee .
Part II
Secondly, I’d like to introduce something regarding survey market access in China.
Ø Administrations regulating survey field in China
In sum, there are four administrations involved into the management of marine survey business in China: Maritime Safety Administration (MSA), Administration of Quality Supervision, Inspection and Quarantine (CIQ), Insurance Regulatory Commission (CIRC) and Supreme Court and Maritime court.
(a) MSA takes charge of law implementation under her jurisdiction for maritime safety and oceanic pollution prevention, and play the role of state supervision on maritime safety. MSA has the authority to qualify the statutory surveyor for PSC and independent survey company who is appointed by some interest parties in an accident to make investigation.
During the legal proceeding related to accident of steel damage at sea, the qualification has priority, but is not a must. CMS has been qualified by MSA.
(b) CIQ is an administration responsible for (1) the management of import/export commodity statutory inspection and (2) the authorization of a cargo survey company working for commercial purpose on the non-statutory commodity.
During the legal proceeding related to the steel cargo damage investigation, the qualification has priority, but is not a must. One of CMS’s brother companies (with the same mother company) has been qualified by CIQ.
(c) CIRC is in charge of the supervision and regulation for the Chinese insurance market. CIRC would authorize surveyor to deal with cases with relation to insured object. In other word, only the report issued by a qualified company could be accepted as the evidence for Chinese insurance companies’ claim handling.
If the steel cargo damage survey is instructed by a Chinese cargo underwriter, the license given by CIRC is a must for serving them. One of CMS’s brother companies (with the same mother company) has been qualified by CIRC. The qualification could be shared by CMS.
(d) Supreme Court and Maritime court take responsibility for authorizing and publishing their approved survey companies. Only the reports issued by those approved companies could be deemed as valid evidence during marine litigation.
if a steel damage dispute probably subject to lodging an appeal happens, it would be better to appoint a court qualified company to carry out inspection. Otherwise, the report could not be accepted by the court. CMS is a qualified inspection company in the field of marine investigation.
Ø China Marine Services Company Co., Ltd. (CMS)
China Marine Services (CMS) is an independent marine surveying and consultancy in mainland China. She is a joint venture between China Classification Society Industrial Corporation (CCSI) and Thomas Miller & Co. Ltd. CMS serves overseas and domestic clients from P&I, Insurer, Ship interest, Cargo interest and authorities with a wide service scope covering many marine related fields.
CMS survey and consultancy service coordinator will be on duty round the clock and undertake a 24 hours response capability in the ports along China’s coastline. For more details, please refer to our website www.cmsonline.net. Our 24 hours duty phone is +86 139 116 99199.
Part III
So far, I’ve presented you with two practices issues about steel cargoes loading survey in China. And now I’d like to present you with particular items which should be paid particular attention on steel loading survey in China.
Experiences coming from our real working practices in steel loading survey has shown that the following cases stand a great chance to cause disasters, accidents or claims involved to ship owner and P&I:
Ø Case Study I - Abnormal substances attached on steel cargo (i.e. asbestos)
Any abnormal substances adhered on steel would result in big problems at discharging ports, especially in Europe or America. When the contaminated goods arrives at the ports sensitive to those prohibited materials, the discharge will be rejected or at least suspended for a completely cleaning operation.
In 2006, one vessel carrying steel coils from China called one of Europe ports. Unfortunately, the port authority found some suspicious object which looks like asbestos on steel coils. It took several days to identify such adhesion and work out the way to handle cargoes by quarantine officers. CMS surveyor was instructed to that port for investigation by P&I club. The treatment for the removal of asbestos adhered on each steel coils lasted for about two weeks, causing huge costs on the sanitation and quarantine, the cleaning operation, the expert involvement, as well as the ship and cargo delay. In fact, there are only fifty coils contaminated.
Therefore, the club and its members value surveyors not as passive recorders of information only, but as a vital part of the member’s loss prevention team. They are encouraged to play their role in the way to identify abnormal substances attached on steel cargo, such as asbestos, straw, cockroach and any other fauna and flora objects. And the reports, advice and assistance they can offer to P&I and Masters is an essential part of their work.
Ø Case Study II Un-fumigated wood dunnage
ISPM-15 (International Standard of Wood Package Material) has been implemented in many countries, such as Australia, Canada, China, EU, and USA. and it requires that all wooden packaging material must be free of bark, fumigated and provided with an identification mark. Dunnage must meet the same criteria as wood packaging material.
The case failed to comply the requirement as following was suffered by CMS staff during their pre-loading survey. Sometimes, when stevedores or charterer incline to save their money and use dunnage with :1. the un-fumigated dunnage;2. the second hand dunnage; or 3. straw as dunnage, the ship owner will face serious problem.
Please note that any of substance mentioned above might cause vessel impounded and cargo destroyed. Surveyors are obligate of rejecting such dunnage. Reports and advices were encouraged to be made for the Master as soon as possible.
Ø Case Study III – Bad Stowing in Cargo Hold I
When the crew neglects to supervise the loading /stowing/ securing process, they might have to face the hard situation.
Once a vessel loaded steel plates onboard under CMS pre-loading survey, and stevedores ignored the advice given by our surveyor. The gap between stacks of steel plates reached about 2 meters in max. These methods of stowage are not recommended and should be avoided. Finally, more chocking and securing have been required in the anchorage for 3 days under P&I and ship owner’s supervision according surveyor’s report.
Steel cargoes should be stowed according accurate methods as stowage plan made by C/O or super cargoes. Correct stowage not only reduces the risk of cargo damage by protecting the cargo, it also makes life safer for stevedores and crew and avoids extra working for them.
Ø Case Study IV – Bad Stowing in Cargo hold II
Sometimes, the charterer might be happy to load coils with more tiers than the limit accepted by ship’s loading manual or normal practice. However, If the permissible tonnage is exceeded, the tank top plating may be deformed. And if the cold rolled coils are over stacked, the bottom coil may be deformed seriously.
Once in one northern port of China, according to our long-term local experiences, good suggestions about loading and stowage had been given to the Chief officer and charterer delegate in order to prevent cargo from damaging by CMS surveyor. They did not accept those advices and loaded steel coils exceeding the general guide. Not until the completion of loading, the deformation of the bottom tier had been found. At last, the aforementioned surveyor’s suggestion has to be applied.
In general, we don’t have the regulatory guide for how many tiers can be maximally loaded. The ideal stowage tiers would depend on the steel coils’ weight and strength, general guide of steel stowage, the ship’s loading manual and surveyor’s long-term experience on steel stowage.
Ø Case Study V – Other Bad Loading / Stowing /Securing
Stevedores often make improper loading / stowage / securing works, which need to be rectified during survey. For example, 1) if the long and thin steel goods (i.e. steel beams, pipes etc.) are stowed improperly, the adjacent cargos under the gravity of above goods will be seriously damaged. 2) The correct method of stowing hot and cold rolled steel coils (except for palletized coils) is usually with their centre cores fore and aft. If they are stowed any other way, they are more likely to shift.3) Steel coils must never be stowed in tween decks, except for palletized coils in special circumstances.
Along with the high speed growth of China’s economic, the development of the international trade is still very optimistic in the foreseeable future. Recently, it could be noticed that China government is trying to optimize her exporting merchandise structure and make some changes on the steel exporting refund policy. However, after a short term adaptive adjustment, we believe, the prosperous steel exporting trend will go ahead continuously.
Therefore, the market prospects for the mentioned cargo preloading survey in China are very good. With a view to further enhance the safety of the transportation of steel products by sea, China marine surveyors are making great efforts in this field.
That’s all I want to talk about. Please don’t hesitate to ask me if you have questions. Thank you!
