The best practices for operators to avoid claims due to inaccurate cargo declaration for solid bulk cargoes in Brazil.
Despite mandatory requirements for shipper information on solid bulk cargoes, inaccurate or incomplete cargo declarations are still common in shipments leaving Brazil’s ports. This can generate multiple losses, sometimes with devastating consequences.
Allocation of liability
Master: Most of the liability when loading and carrying solid bulk cargo falls on the shoulders of the carrier through the Master. Before loading starts, the Master must calculate the vessel’s stability for proper cargo stowage and safe carriage and agree on a documented loading and stowage plan with the port operator performing stevedoring services.
The carrier’s liability begins when the cargo is received on board and continues until it is delivered at the destination. The Master must refuse to transport cargo that is visibly in poor condition or that may pose a hazard to human health or the safety of the vessel and property on board. They must also reject any cargo that is not accompanied by legally required documents or that does not match the information stated by the shipper.
Shipper: Under domestic and international regulations, the shipper must fulfil all legal requirements and procedures before loading cargo. This includes compliance with rules and norms issued by the Ministry of Agriculture, Livestock and Supply (MAPA) and other federal regulatory bodies, such as the National Mining Agency (ANM).
In Brazil, the carrier is entitled to compensation from the shipper for losses resulting from improper cargo information. Where international limitation conventions apply, the owner is generally exempt from liability for damages resulting from goods being incorrectly declared – or not declared at all – which otherwise lies with the shipper.
Port operator: The operator of the port terminal or facility must ensure that the loading and stowage of cargo are carried out as agreed with the Master or duty officer, and for unloading any cargo whose carriage is prohibited or whose condition deviates from the information given by the shipper. Likewise, the port operator is liable to the owner for damage caused to the ship and to the shipper for shortage or damage occurring during loading.
Recommendations
Although the shipper’s cargo declaration is a mere statement of the contractual quality specifications that ultimately bind sellers and buyers, many of which are not verifiable by ship personnel at the time of loading or during the voyage, Proinde recommends that:
- Master and crew ensure all cargo information is updated and derived from representative analyses of the cargo, particularly concerning the average moisture content (MC) and transportable moisture limt (TML) of the load. Although most qualitative parameters may not be verifiable by the crew, it is crucial that the owner and Master secure documentary evidence provided by the shipper or its representative to safeguard its eventual recovery opportunities.
- If there is any doubt about the cargo documentation or content declaration, the Master should consult with the owner and P&I insurer to review the information provided and, if necessary, appoint a qualified surveyor to check the actual quality and condition of the cargo. The surveyor should be able to identify potential hazards and suggest precautions to ensure safe loading and transport. They should also be able to advise on the collection of samples or carry out independent testing to determine the actual parameters of the shipment.