Transit Insurance of Coal and Loss prevention
Coal is a mineral of organic origin, developed from the remains of vegetation which have, over the course of millions of years,been transformed to solid carbon fuel by the effect of heat and pressure from overlying rock or water. Coal is used as fuel. Coal covers a wide range of products with a corresponding range of properties. All classes of coal, including anthracite, are susceptible to Spontaneous Combustion.
Stowing
Whilst all classes of coal are susceptible toself-heating under appropriate conditions, some types of coal, particularly lower gradei.egeologically immature coals, have a particular propensity in this regard. The blending of different types of coal may also enhance the propensity of spontaneous combustion. Very little can be discerned about the potential properties of a cargo simply by visual inspection at the time of loading. Thus, given the wide variability in the properties of coal, it is essential for the Master of the vessel to obtain full details of the specific characteristics of cargo from the shipper prior to loading. If the Master is not satisfied that he has been provided with sufficient information concerning the properties of the cargo, or has reason for concern about the safe carriage of the cargo, he should seek expert advice before shipment of the cargo.
Precautions to be taken after loading on to the vessel
- Warning notices against smoking and the use of naked illuminationshould be posted at the entrance to cargo compartments and adjoining spaces where inflammable gases may accumulate.
- Warning notices against use of electrical circuits in cargo compartments, mast houses, deck houses and other spaces where gas may accumulate should be avoided.
- Torches specially designed for safe use in potentially flammable environment should be carried on board.
- Consignment should not be allowed to be loaded on the vessel in slurry conditions. Coal shipped in wet condition will show at least 2 to 3% loss in weight.
- Since coal is susceptible to spontaneous combustion during long ocean voyage, temperature should be taken at the bottom of and at the ends of each coal carrying compartment and steps taken to monitor and record the rise of temperature, if any, during the entire sea voyage.
- There will be no dispute if the total quantity of consignment loaded on to the vessel has arrived without any shortage.
- If draught survey at discharge port shows excess cargo when compared to the quantity loaded at load port, the same may have been caused due to absorption of moisture or because more cargo was loaded than intended.
- If cargo is short landed, the receivers of cargoshould file claim on the carriers.
- If the cargo is loaded in one port and discharged in another port, the difference in quantity without any valid reasons may be a paper loss but if the cargo is discharged at several ports, then surveyors representing different receivers should be called in to estimate the quantities based on figures obtained by draught surveys, etc.
- Since cargo stored in open prior to loading on to the vessel is exposed to rain and the moisture remains in cargo for many weeks prior to loading, excessive weight i.e. in excess of 100tonnes on a 4 weeks voyage may be discharged.
- Itmay be noted that when moisture drains out during prolonged voyage, the cargo contains moisture which may accumulate at the bottom of the cargo hold and drain towards the hold bilges. This may also happen due to leakage into the cargo holds through hatch covers or from other openings. Hence, a cargo of coal containing up to 1% of its weight as moisture, may settle in the bilges tank. Unless, proper sounding of bilges tank is taken during draught survey, such accumulation in bilge tank will be undiscovered. The cargo receiver will receive shortage of cargo but draught survey at disport will not show any difference in quantity as from load port since quantity of cargo settled in the bilge tank will appear in the disport draught survey.
- Self- heating/Spontaneous combustion.
- Entry of sea water into the vesselwhich may cause contamination of cargo.
- Washing out of cargo during storage in open at the Port of loading anddischarge due to cyclonic storm.
- Unexplained shortage, loss of calorific value, moisture loss, multiple handling losses, blowing out of consignment ( especially dust particles) during mid-stream discharge/loading,lighterageand transportation of cargo by barges.
- Theft, pilferage, rain andsea water damage , non- delivery of cargo during storage in open and transportation by open wagon/vehicle.
- The risk under the policy will commence as per Incoterms 2010.
- Thepolicy shall be subject to supervised loading and discharge of cargo by the surveyors nominated by the underwriters.
- The cover excludes midstream loading/discharge, lighterage and transportation of goods by barges. However, if thecover is granted, the same shall berestricted to ICC ( C) only. The cover for spontaneouscombustion duringoceanvoyage may begranted but subjecttoan excess of at least 1.5% on the value of the whole consignment. The cover for spontaneous combustion during transportation by barges and inland vessel/conveyance should not be granted.
- The cover excludes rain, sea water damage, theft and pilferage during storage in open and during transportation by open wagon even in the ordinary course of transit.
- The cover excludes moisture loss, loss of calorific value, deterioration, contaminationand unexplained shortage.The cover also excludes payment of ransom arising out of PA/GA.
- The policy shall be subject to Co-mingled clause, Institute Classification Clause and ISM endorsement and Sanction Limitation and Exclusion Clause.
Author : Sumon Ganguly (Dy Manager- National Insurance Co Ltd.)
Great work sir keep it up sir.