‘Tis the Season for Bad Weather and Cargo Damage

Types : Alerts

Winters at sea in the Northern Hemisphere are very harsh.  Despite vessel owners and operators’ best efforts to secure cargo and safely navigate, container vessels regularly lose containers overboard.  As we near the start of the North American winter season, there have already been several newsworthy incidents of vessels encountering severe weather and suffering collapsed stacks and missing boxes—including one vessel that reportedly has 1,900 lost or damaged containers.  This article briefly describes how to report and respond to lost containers, how to investigate and determine the cause of the damage, and how to assess potential defenses and liabilities under US law.

A master’s report of heavy weather and lost containers usually occurs when the vessel is still at sea.  That gives some—but not much—time to initiate a response.  The vessel should first record and report the loss to all interested authorities including the flag state and the port state, and any states where navigation might be adversely impacted by the flotsam.  The owner and operator may have a duty to search for and recover the missing containers so that they are not a hazard to navigation or the environment. Notice should also be given to the vessel’s insurers and all potentially interested claimants, like charters, shippers, consignees, and maybe even cargo insurers, so that they might have a fair and reasonable opportunity to inspect the damage.  The vessel may consider deviating to a safe port that has good facilities and equipment to efficiently offload any remaining collapsed and damaged containers (and to conveniently transship any unaffected containers).  A declaration of general average may be prudent in serious situations.

The investigation and determination of the cause or causes of the incident will be key to the assessment of defenses and liabilities.  Owners and operators—through their appointed lawyers—should quickly retain experienced surveyors and experts, and arrange for them to attend onboard (which is not an easy task during a global pandemic).  If any other interested parties retain surveyors and experts, then all involved should agree on a joint protocol for the inspection of the damage and the investigation of potentially relevant evidence.  Access to the ship and its crew should always be controlled.  Damage to the ship, containers, and cargo therein should be extensively recorded with photographs.  Documents like bills of lading, stowage plans, stack and tier weights, cargo securing manuals, logbooks, and letters of protest should be collected and preserved.  In circumstances where it is suspected that heavy weather caused the loss, experts will likely be specifically interested in the vessel’s speed, course, track, route, and heading as well as any forecasts and data from weather routing services.  Physical evidence like crushed deck sockets, failed lashing gear, and broken twist locks should be set aside and stored pursuant to a documented chain of custody pending further analysis.

Containerized cargo being carried to or from the US will likely be governed by COGSA.  Under COGSA, a carrier has a duty to diligently provide a seaworthy ship at the beginning of a voyage and to properly stow and care for the cargo throughout the voyage.  A ship might be unseaworthy at the beginning of a voyage if, for example, the stowage plan makes it unstable and vulnerable to extreme rolling.  A ship might also be unseaworthy if its lashing equipment is defective at the beginning of a voyage.  However, COGSA also provides certain defenses that may be available if, for example, a ship’s lashing equipment becomes defective during a voyage.

Perils of the sea and acts of God, which are complete defenses under COGSA, might be applicable when the cause is suspected to be bad weather.  The carrier has the burden to prove that no reasonable precautions were available to avoid foreseeable dangers and to prevent the damage at issue.  Lord & Taylor LLC v. Zim Integrated Shipping Servs., Ltd., 108 F. Supp. 3d 197 (S.D.N.Y. 2015).  But US courts generally will find that severe weather is foreseeable during the winter season, especially in the North Atlantic, and deny those defenses.  “The cases are legion which acknowledge that the North Atlantic in the winter is a most inhospitable place.” Kane Int’l Corp. v. MV Hellenic Wave, 468 F. Supp. 1282, 1285 (S.D.N.Y. 1979); see also, e.g., Trade Arbed, Inc. v. S.S. Lagada Bay, 1982 WL 71044598, at *1 (S.D. Ga. June 18, 1982) (winds ranging from force 7 to force 10 are severe, but foreseeable for the North Atlantic in October); J. Gerber & Co. v. S.S. Sabine Howaldt, 437 F.2d 580, 596 (2d Cir. 1971) (“No exact Beaufort Scale wind force can be referred to as the dividing line which will determine those cases in which a peril of the sea is present and those, below that mark, in which it is not. There are, however, few cases in which the winds are force 9 or below … in which there has been found to have been a peril of the sea, whereas there are many where the force has been 11 or above.”)  Nonetheless, a carrier may still limit its liability for weather damage to cargo to $500 per package under COGSA.

Montgomery McCracken’s Maritime and Transportation Practice Group is ready, willing, and able to counsel owners, operators, and carriers with respect to severe weather damage and lost container incidents anytime day or night.  Please contact Robert “Bobby” O’Connor if you have any question or comments.