Mid February 2020, we started to receive calls from worried clients with cargo lying idle on board 3 different vessels at anchorage off ports in Egypt, Italy and Singapore and being delayed in delivery due to the German-based Shipping Line/Charterer being in state of restructuring and insolvency.

The twenty thousand metric tons of mainly steel and project cargo, spread over almost 55 bills of lading we represented, was booked December 2019-January 2020 for delivery to mainly UAE and Asia ports and now became exposed to non-delivery, penalty fines under sale contracts, additional discharge and temporary storage costs, extra freight for on carriage, possible cargo damages, etc.

DP Legal acted to (1) facilitate discharge of the cargo in the ‘intermediate’ port, (2) assist in on-carriage solutions, (3) organize cargo surveys during discharge and re-loading, (4) collect and report on costs incurred for insurance purposes (5) ad-hoc consultancy and (6) analyse recovery possibilities.

For the cargo on board two out of the three vessels, DP Legal negotiated liner-hook discharge agreements with the lawyers appointed by the ship owners thereby limiting the costs, responsibilities and liabilities of our clients who booked the on-carriage vessels.

For the cargo on board the third vessel, the ship owners contracted a local ship agent to arrange for berthing, discharge and storage in the Egyptian ‘intermediate’ port. DP Legal negotiated the terms and rates of discharge and storage while simultaneously, our clients booked the on-carriage vessels.

With the help of our colleagues at DPS Africa and DPS Antwerp Liaison, almost 25 joint surveys were carried out in 3 intermediate ports and 9 destination ports in order to assess eventual cargo damages during discharge and loading and advise on lashing & securing.

All cargo got delivered at final destination early May 2020. Total cost for discharge and on-carriage of almost 2.3mio USD was reported to our clients in our casualty summary reports

Recovery possibilities are still being analysed. Feel free to contact us in case you’d like to have a preliminary advice.

Case study details

Casualty: German-based shipping Line in state of restructuring and insolvency and not being able to deliver the cargo on board various vessels to the intended final ports of destination.

Cargo: 20.000 MT steel and project cargo under 55 different bills of lading spread over 3 vessels

Ports of destination: Singapore, Nansha, Shanghai, Xingang, Jebel Ali, Dammam, Yanbu

‘Distress ports’: Porto Marghera, Jebel Ali, Singapore and Alexandria

Exposure: non-delivery, penalty fines under sale contracts, additional discharge expenses, temporary storage costs, extra freight for on-carriage, damages during handling operations in distress ports

DP LEGAL coordination services:

• Facilitate discharge of cargo in the distress ports
• Assist in on-carriage solutions
• Organize joint cargo surveys in distress and destination ports
• Report on costs incurred for insurance purposes
• Ad-hoc consultancy

Some figures

• Additional costs for discharge and temporary storage in distress ports: 1.050.000 USD
• Extra freight costs for on-carriage: 1.250.000 USD
• 25 surveys organized in 12 different ports
• All cargo discharged at final destinations within 75 days
• Over 1500 emails and 120 phone calls

Challenges faced:

• Covid-19:
  • Restricted access on board vessels and in ports
  • Delay in processing payments
  • Delay in delivery original bills of lading
• Notice of lien on cargo by ship owners
• Arrest of vessel in Porto Marghera
• Project cargo facing penalty fines under sale contracts
• Dead freight due to missed calls on-carriage vessels
• High demand resulting in high quotes for handling, storage and on-carriage