By David Gambrel

This fourth article in a series on Ocean Shipping deals with the shipper’s responsibilities under the Carriage of Goods by Sea Act (COGSA). Some shippers may argue that once the coal has been placed in the custody of the carrier, the carrier is solely responsible for the safety of the vessel and the cargo, but COGSA clearly holds the shipper significantly accountable.

On October 27, 1990, the M/V Berge Charlotte was off the coast of South Africa when a tremendous explosion tore off some hatch covers and killed five men, one of them being the captain. The ship, owned by Bergesen and chartered by China Steel, was carrying a load of coal supplied by U.S. Steel and purchased by China Steel, from Norfolk to Taiwan. U.S. Steel had represented the coal was Category A, which is not considered dangerous because it emits its methane gas more quickly, resulting in the emission of gas before loading in the hold and reducing the likelihood of explosion. The court found U.S. Steel knew or had reason to know the coal loaded on board the M/V Berge Charlotte was Category B, which emits methane more slowly, retaining it for gradual release in the hold. Because of bad weather and because he thought he was carrying Category A coal, the captain chose not to ventilate the load.

One could argue the ship’s captain should have acted as if it he had Category B coal on board, and the explosion was his fault for not taking normal precautions. However, the estate of the captain sued on his behalf under the Death on the High Seas Act, and the district court (Eastern District in Virginia) entered judgment against both China Steel and U.S. Steel. This judgment was affirmed on appeal to the U.S. Court of Appeals.

Under the terms of its Bergesen charter party China Steel also had a duty to warn of hazardous cargo. Thus it is seen both the charterer and the coal supplier were held responsible for the fatal explosion. It does not matter that either party may have made an innocent mistake; the courts held they had the greater responsibility. If one is the coal supplier (perhaps even a broker), he must know and divulge any hazardous characteristics of the coal he is shipping. Failure to do in this case cost the defendants $3.19 million.

Spontaneous Combustion aboard Ship
In early September 1981, the Indonesian bulk carrier M/V Kartini anchored in Long Beach Harbor to take on bunkers prior to its voyage to Taiwan. About 1½ hours after the vessel began bunkering, smoke was observed coming from two of the cargo holds. The vessel immediately secured bunkering operations and called the Coast Guard reporting a fire on board. Two Coast Guard vessels and three fireboats arrived on the scene less than a half hour later.

Thus began a series a of operations that clearly showed there was general ignorance about how to handle spontaneous coal heating in ships’ cargo holds, and that it was necessary to call on a coal expert before the spontaneous heating situation could be brought under control. Eventually all of the coal had to be unloaded, and a total of 54,600 metric tons (mt) of coal lay on the ground at the Port of Los Angeles. Before the month was over, three more vessels would call at LA/Long Beach with similar problems, and more than 200,000 mt would lie on the ground.

At least three Pacific Rim coal customers would not be receiving their coal on time, and would be having issues with every upstream company involved until they received their coal. The source of these problems had to be determined quickly. All four of the “September ships” had two things in common: (1) they had been loaded in the Lower Mississippi River at one of two coal terminals, and (2) coal had been brought to the terminals in barges. It is not our intention to track the difficulties experienced by all the parties involved, but to point out the final responsibility belongs logically to the one party that knows the most about coal: the producer. The producer should know the properties of its coal.

One of the terminals reported coal barges with small fires at the base of the piles in arriving barges. Was this the fault of the barge company for allowing rain water to get into the barges, or of the coal company for not ordering covered barges? If the terminal can do something to the coal that will cause it to spontaneously heat, it is the coal company’s duty to warn the terminal. If by loading ships directly from coal piles still sitting in rain water the terminal can increase the likelihood of spontaneous combustion, the coal company should tell it so. These duties to warn may not rise to the same degree of assignable strict liability as the COGSA duty to warn, but might in the final analysis contribute to a ship safely carrying its coal cargo to its destination.

Is the “Duty to Warn” Overkill?
It is easy to understand why no producer would want to say anything adverse about his own coal, and may therefore regard a “duty to warn” as overkill. However, he may not understand the depth of so much concern about cargo. He may never have heard, for example, of the SS Grandcamp, but most seamen have. The captain of the vessel SS Grandcamp did not understand spontaneous heating in his ammonium nitrate cargo. He ordered actions that caused his cargo, his vessel and two other vessels to explode in the Port of Texas City, Texas, in 1997, killing 581 people and causing a long-lasting fear of transporting ammonium nitrate. Another 40 years would pass before river barges would haul ammonium nitrate in the United States. We do not know if the “duty to warn” might have avoided the SS Grandcamp incident, but we do know carriers have developed a healthy concern for the cargos they carry.

During the 10-year period between 1991 and 2000 there were 134 bulk carriers (>10,000 dwt) lost at sea, resulting in the loss of more than 740 lives. While none of these may have been specifically attributable to coal cargoes, ship owners and their insurers are generally aware that coal is capable of becoming a hazard. The shipper (producer) will not be relieved of his duty to warn, however, by a general knowledge. He is still obligated to make full disclosure of any dangerous characteristics of his coal.

One point should be made clear. In the case of any cargo-related disaster a maritime court will usually hold the shipper of dangerous cargo to a higher standard than the carrier. The COGSA position is that the master of a vessel cannot be expected to know about the dangers associated with every bulk cargo his vessel may carry, and he must ultimately rely on the warnings and advice of the shippers. In the master’s view he literally places his life in the shipper’s hands every time he accepts a cargo.

Gambrel is the president of Logisticon, a coal transportation consultancy. He may be reached at david.gambrel@gmail.com or at bunkgambrel@earthlink.net.