A London law firm is calling on shipowners, salvors, insurers, freight forwarders and others to work together to secure the speedy release of containers that have been stranded on a fire-ravaged vessel for more than four months.
Specialist cargo law firm Roose & Partners is seeking a bridging guarantee for non-damaged boxes on the 7,150-teu containership Yantian Express (built 2002).
The vessel caught fire in January and, after salvage operations were completed, has since been held at Freeport in the Bahamas, while general average and salvage securities have been sought from property interests to allow the release of cargo.
'Potentially catastrophic'
Roose & Partners lawyer Joanna Waterfall said the delays are potentially catastrophic for some cargo owners.
“Orders are months late, with seasonal and time-sensitive products likely to arrive way beyond the due date and with the result of loss of market,” she said.
“We have been advised of many claims whereby receivers have notified insurers of a potentially serious loss to their business, with some reported to be close to closing their doors as a consequence.”
The ship’s operator, One Network Express (ONE), said earlier this month that the vessel would sail in the first half of May to discharge its cargo in Halifax, Nova Scotia.
However, it called for parties to put up more security, with only one-third of cargoes having forwarded general average and salvage security so far. There are no indications on AIS data that the ship is preparing to sail.
Waterfall said there is a lack of information on the status of the vessel.
Security issues
Many cargo owners have already provided general average security, even though it is not required until the vessel arrives at its port of destination, and have also delivered salvage security to secure the release of cargo.
But others are unprepared to provide such security in advance, while many uninsured parties have also declined to provide security.
Waterfall said: “The Yantian Express is sitting in Freeport and unable to depart due to lack of security from a large proportion of cargo, leading to further delays in cargo reaching its market.”
Multiple cargoes from different shippers are often consolidated into one container and if one of the cargo owners does not forward security, then none of the others in the same container can secure the release of their goods.
Bridging security can work very effectively and, now that the Yantian Express is, by all accounts, passed to sail, and where the only thing preventing the progress is a lack of security, all those involved in shipping cargo should work together to ensure the job gets done
Joanna Waterfall
One of the problems identified by Roose & Partners is that Freeport is an intermediate port that does not have the facilities to handle a casualty such as the Yantian Express and redeliver cargo.
Working together
Waterfall suggested one solution that has been used before is that all of the parties involved — including insurers, the shipowner freight forwarders, consolidators and salvors — work together to secure bridging security that allow the ship to sail to its port of destination where the general average bond can then be provided and the cargo released.
She described the move as a "must" for the Yantian Express.
“Bridging security can work very effectively and, now that the Yantian Express is, by all accounts, passed to sail, and where the only thing preventing the progress is a lack of security, all those involved in shipping cargo should work together to ensure the job gets done,” she said.
“There is little doubt costs associated with insuring a bridging guarantee, or taking out lien insurance would be recoverable by the salvors or by the shipowners and charterers via the mechanism of GA [general average].”
ONE said 202 of the ship’s containers had been destroyed and another 460 affected by the fire.
